October 14, 2021 | Editor: Martin Wennerstrom
Tesla ordered to pay millions in workplace discrimination lawsuit
A federal jury has ordered Tesla to pay USD 137 million to a contract worker over claims of workplace racism. Plaintiff Owen Diaz accused Tesla of creating a hostile work environment and failing to address racial abuse despite repeated complaints. In a blog post, Tesla’s VP People argued that the firm had followed up on the complaints by firing two contractors and suspending another. The award consisted of USD 6.9 million for emotional distress and USD 130 million in punitive damages. The jury’s decision came amid shareholder pressure regarding Tesla’s use of mandatory arbitration agreements for full-time employees. At the October 7 AGM, an advisory motion filed by investor Nia Impact Capital, owner of 923 Tesla shares, called on Tesla's board to study the impact of mandatory arbitration to resolve workplace complaints of harassment and discrimination. The investor argued that mandatory arbitration limits employees’ remedies and poses “unknown and uncompensated risks” for investors who may be unaware of true workplace conditions. Despite being defeated, the shareholder proposal was backed by 46.37% of votes cast at the AGM.
Investors pressure Australian
banks on climate action
A group of shareholders have filed climate change resolutions with three major Australian banks – Westpac, ANZ and NAB – asking them to stop financing fossil fuel projects. Coordinated by climate activist group Market Forces, these resolutions are part of a campaign which calls on Australia’s big four banks to act on their own commitments of supporting the Paris Agreement and the net zero emissions goal by 2050. A similar resolution filed by Market Forces with Commonwealth Bank of Australia was not put to vote, as it was preconditioned on an article amendment that failed to achieve its requisite majority.
Clayton, Dubilier & Rice wins
auction for Morrisons
US private equity firm Clayton, Dubilier & Rice (“CD&R”) has won a months-long battle for Wm Morrison Supermarkets, outbidding rival Fortress Investment Group with a GBP 7.1 billion offer. The takeover saga culminated in the UK Takeover Panel stepping in to organize an auction, after neither party had declared their offers to be final. Notably, in August, Morrison’s board unanimously accepted a GBP 7 billion offer from CD&R, having previously backed a GBP 6.3 billion deal from a consortium led by Fortress Investment Group. Shareholders will vote on the deal at the upcoming EGM on October 19. If approved, Morrison will be the second UK grocer to be taken private this year after Asda.
Daimler AG spins off truck
At its October 1 EGM, Daimler AG shareholders voted overwhelmingly in favour of a board proposal to spin off the truck and bus business and subsequently list Daimler Truck Holding AG on the Frankfurt Stock Exchange in December 2021. Shareholders also supported the renaming of the remaining car business as Mercedes-Benz Group AG, effective as of 1 February 2022. According to the demerger plan, Daimler shareholders will hold 65% of the new company, while Daimler AG will retain a 35% stake. The new company will have a 20-member Supervisory Board with equal representation as per the German Co-determination Act.
Governance in Brief – June 8, 2023
European Parliament approves CSDDD The European Parliament has approved the “Corporate Sustainability Due Diligence Directive.” Under the new rules, companies will be required to identify and address the negative impact of their activities and value chains on human rights and the environment. Additionally, companies will need to implement climate transition plans, and, in the case of companies with more than 1,000 employees, tie directors' variable compensation to target achievement.
Governance in Brief – June 1, 2023
Citigroup to IPO Banamex after Mexican gov’t interventions hamper sales deal Citigroup has announced a plan to spin off its Mexican business, Banamex, after a failure to sell the unit to conglomerate Grupo Mexico. Citigroup had been in talks with German Larrea, CEO and Chairman of Grupo Mexico, for over a year in an attempt to orchestrate the sale of the bank, which was first announced at the start of 2022.
Governance in Brief – May 25, 2023
Activist investor pushes for leadership and strategy changes at NRG Energy Activist investor Elliott Investment Management has disclosed a 13% stake in the US-based NRG Energy and called for leadership and operational changes at the company to remedy its “meaningful underperformance.” The investor urged NRG to add independent directors with experience in the power and energy sector to its board, noting that it has already identified five executives to guide the operational and strategic changes.