October 07, 2021 | Editor: Martin Wennerstrom
Frasers Group shareholders revolt against planned CEO compensation
At its 2021 AGM, Frasers Group shareholders approved a GBP 100 million compensation scheme for incoming CEO Michael Murray, amid backlash from independent investors. While the remuneration policy was supported by nearly 85% of votes cast, there was around 49% dissent among independent shareholders. Namely, the outcome was largely driven by Frasers’ founder, current CEO and Murray’s future father-in-law, Mike Ashley, who controls around 63% of voting rights. Under the new executive share scheme, Murray, who will take over the CEO role in May 2022, would receive the GBP 100 million payout provided that the company share price exceeds GBP 15 for 30 consecutive days during a four-year performance period. Additionally, the group’s CFO, Chris Wootton, would receive up to GBP 9 million, subject to a GBP 12 share price target. Several proxy advisers had recommended a vote against the policy, citing “excessive” and “unreasonably high” payouts. Frasers’ independent shareholders also expressed dissent against the FY2020/21 remuneration report, with nearly 14% of the votes opposing it. Notably, Wootton was awarded a GBP 100,000 cash bonus in the year for his “exceptional efforts in leading the company,” while his base salary was increased 67% as of May 2021. Frasers’ stock closed at GBP 6.3 on October 5.
SEC proposes rules to enhance say-on-pay voting disclosure
The U.S. Securities and Exchange Commission (“SEC”) has proposed a new rule requiring institutional investment managers to disclose how they vote on executive compensation matters. The rule would implement one of the remaining rulemaking mandates under the Dodd-Frank Act of 2010. Additionally, the SEC has proposed that fund managers disclose how their securities lending activity impacts their voting. The proposal would also mandate the use of a structured data language to facilitate the comparability of voting records.
Investors to engage with Asian companies on climate change
Six institutional investors with a combined USD 4 trillion of assets under management have teamed up under the Asia Transition Platform (“ATP”) organization to step up engagement with big Asian companies on climate change goals. Initially, the engagement will focus on carbon risk and coal at financial institutions and coal- exposed power companies in the region. The investor group has already begun engagement with Chinese companies, such as electricity generation firms Huaneng and Huadian. ATP plans to engage with at least 50 Asian companies over the next three years.
Wells Fargo to face shareholder lawsuit over compliance failure
A U.S. federal judge has ruled that a lawsuit accusing Wells Fargo of defrauding shareholders makes sufficiently plausible allegations to move ahead, thereby rejecting the bank’s motion for dismissal. The suit alleges that Wells Fargo officials had misrepresented the bank’s progress on governance and oversight improvements, specifically regarding its compliance with regulatory consent orders. The orders had been issued following the bank’s involvement in a series of scandals, which included the opening of millions of unauthorized accounts.
Governance in Brief – December 1, 2022
Intel changes performance metrics for CEO’s new-hire award Intel has amended the new hire agreement for CEO Pat Gelsinger by increasing the share price growth target from 30% to 50%, extending the post-grant vesting period from three to five years, and increasing the number of trading days during which target prices need to be maintained from 30 to 90 days. The decision comes after more than half of votes cast by shareholders at the 2022 AGM opposed the company’s remuneration report.
Governance in Brief – November 24, 2022
Costco to set new emissions targets following activist demands Activist investment firm Green Century Capital Management claims that Costco Wholesale Corp has pledged to set new Scope 3 climate reduction targets in 2023. At Costco’s January 2022 AGM, 70% of votes supported a proposal from Green Century for the company to include emissions from producers and distributors in its net-zero greenhouse gas emissions targets.
Governance in Brief – November 17, 2022
Renault to potentially spin off EV line and partner with Geely French carmaker Renault Group has announced plans to split its activities into five separate businesses: “Ampere” (electrical vehicles), “Power” (combustion- and hybrid-engine assets), “Alpine” (sports cars), “Mobilize” (financial services), and “The Future is Neutral” (recycling activities). The company is considering listing Ampere on Euronext Paris in 2023 and has said that it will welcome external investors while maintaining a “strong majority.”
Governance in Brief – November 10, 2022
Petrobras to pay massive third quarter dividend Petrobras has approved the payment of around BRL 43.68 billion (USD 8.4 billion) in Q3 dividends. Of the total dividend, around BRL 20 billion (USD 3.9 billion) will go to the Brazilian federal government, Petrobras’ controlling shareholder.