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.
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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.
SEC (1) | SEC (2) | SEC (3) | Reuters
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.
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Governance in Brief – March 23, 2023
SVB Financial Group sued after the collapse of Silicon Valley bank unit SVB Financial Group, the parent company of Silicon Valley Bank, and two of its top executives, CEO Greg Becker and CFO Daniel Beck, are being sued by shareholders following the bank’s collapse. The lawsuit, filed by retail shareholder Chandra Vanipenta on behalf of a group of shareholders, accuses the bank and its two top executives of filing false and misleading financial reports.
Governance in Brief – March 16, 2023
Canada introduces climate reporting framework Canadian regulators have issued new guidance for the country's banks and insurance companies to better manage climate-related risks. The framework, which requires disclosure on governance, strategy, risk management, and metrics related to financial institutions’ greenhouse-gas emissions, was first drafted in 2022.
Governance in Brief – March 9, 2023
The U.S. Congress has passed a resolution repealing a Department of Labor (“DOL”) rule empowering retirement plan managers to consider climate change and ESG factors in their investment decisions. The rule, introduced by the Biden administration, falls under the Employee Retirement Income Security Act (“ERISA”), a federal law which sets protection standards for participants in private pension plans. Biden’s ruling entered into force in January this year, overturning prior Trump-era DOL rules that limited pension fund managers to restrict their investment strategies to “pecuniary factors.”