October 21, 2021 | Editor: Martin Wennerstrom
SEC moves to revive clawback rule
The U.S. SEC has announced that it is reopening comments on a proposed rule that would claw back executive compensation in cases of financial restatement due to “material noncompliance.” The rule was initially proposed in 2015, as mandated by the Dodd-Frank Act, but has yet to be finalized. The clawback would apply to incentive-based compensation awarded to current and former executives during the three fiscal years preceding the restatement “regardless of whether the misstatement was due to fraud, errors, or any other factor.” The recovered amount would equal the excess compensation relative to the amount to which executives would have been entitled based on the restated financial statements. The clawback provisions would apply to compensation that is granted, earned or vested upon the attainment of a financial reporting measure, including stock price and total shareholder return. Additionally, under SEC’s proposal, stock exchanges would have to establish listing standards requiring public companies to adopt and comply with clawback policies. Issuers would be subject to delisting in case they fail to disclose their policies and comply with their provisions. The SEC is seeking public input on the proposed rule for a period of 30 days.
CNBC | SEC (1) | SEC (2) | Money | Davis Polk
Activist investor pushes for GSK leadership changes
Bluebell Capital Partners has asked GlaxoSmithKline Plc (“GSK”) to reshuffle its board and replace its Chairman Jonathan Symonds, based on performance concerns. The activist investor, which has recently amassed a GBP 10 million stake in GSK, had already asked that CEO Emma Walmsley reapply for her job ahead of the spin-off of the company’s consumer healthcare business. In July, Elliott Investment Management had separately urged the company to refresh its board and review Walmsley’s position as CEO, citing her non-scientific background.
Lufthansa repays EUR 1.5 billion
of state aid
Lufthansa has paid back EUR 1.5 million of the bailout that it received last year from the German government’s Economic Stabilisation Fund (“ESF"). The repayment was made significantly earlier than planned, using proceeds from the airline’s recent EUR 2.16 billion capital increase. Last year, amidst the COVID-19 pandemic, the company agreed to loans of up to EUR 9 billion and stabilization measures, which included silent participations made by ESF in the company’s assets. Lufthansa plans to repay a remaining EUR 1 billion of ESF’s silent participation by the end of the year. ESF now holds 14.09% of Lufthansa’s share capital.
Shanghai Exchange suspends
Syngenta’s planned IPO
Syngenta Group’s planned IPO on the Shanghai Stock Exchange was temporarily suspended, as the company had not updated its application with the most recent financial information. Syngenta, owned by ChemChina, is targeting proceeds of USD 10 billion in the listing, which could be the world’s largest this year. Following the IPO, the company is expected to be valued at around USD 60 billion, including debt. ChemChina is also considering Zurich, London and New York for a secondary listing of Syngenta. Syngenta’s application to list on Shanghai's STAR Market was accepted in July this year.
Nikkei | Swiss Info | Nasdaq | BNN
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.”
Governance in Brief – March 2, 2023
Indian regulator proposes enhancement to ESG disclosure rules India’s securities and market regulator SEBI has released a new ESG disclosure framework for public consultation. The proposed regulations impact India’s 1,000 largest companies by market capitalization, ESG funds and ESG ratings providers. For the largest companies, the regulator proposes areas of assurance of ESG disclosures and reporting and assurance of ESG footprint of the supply chain. The proposals expand on the 2021 Business Responsibility and Sustainability Report (“BRSR”) guidelines and propose mandatory assurance of certain KPIs under ESG disclosure. The KPIs contain intensity ratios such as GHG emissions, water consumption, and waste generation. For supply chain, SEBI will introduce a comply-or-explain approach for the top 250 companies starting in 2024, and assurance beginning in 2025. For ESG funds, SEBI proposes that at least 65% of AUM be invested in companies reporting on comprehensive BRSR and provide assurance on BRSR core disclosures. Under the proposed rules, ESG rating providers should also provide a “core ESG rating” based on assured information in addition to their own products.