September 30, 2021 | Editor: Martin Wennerstrom
U.S. DOJ probes Zoom’s purchase of Five9 over China links
The U.S. Department of Justice has opened an investigation into Zoom Video Communications’ deal to buy American software company Five9, citing potential national security risks posed by foreign participation. In July, Zoom had announced an all-stock deal to acquire Five9 for USD 14.7 billion, contingent on Federal Communications Commission (“FCC”) approval. The DOJ had requested that the FCC defer its decision on the acquisition, pending review by an interagency committee tasked in 2020 with ensuring U.S. telecommunications security against the backdrop of mounting U.S.-China tensions. Zoom has recently faced multiple investigations from U.S. authorities, focused on the firm’s reliance on China-based developers and susceptibility to coercion by the Chinese government. In December 2020, the DOJ charged one of Zoom’s China-based employees with “conspiracy to commit interstate harassment and unlawful conspiracy to transfer a means of identification,” based on an alleged scheme to disrupt Zoom meetings commemorating the 1989 Tiananmen Square Massacre. If approved by regulators and Five9 shareholders, the merger will be expected to close in the first half of 2022.
SEC enters fray surrounding Blizzard workplace harassment
The U.S. SEC has subpoenaed several Activision Blizzard executives and requested that the California-based video game developer and publisher produce board minutes, personnel files, and separation agreements. The firm’s workplace culture has been in the spotlight since late July, when California authorities filed a lawsuit accusing it of having a “frat boy” culture characterized by pervasive sexual harassment and discrimination against women. Additionally, on September 10, a labour union filed a complaint against the firm with federal regulators, for alleged worker intimidation and union busting.
AGL investors urge action on climate change
Australian energy giant AGL Energy Limited has faced significant investor backlash over climate change and carbon-reduction goals. Despite board opposition, a shareholder motion for the firm to set Paris-aligned emissions targets received 54% support at the 2021 AGM. The motion also called for disclosure on how the capital expenditure and remuneration policies will incentivize progress towards these targets. Despite its symbolic value, the vote failed to achieve its requisite majority of 75%. AGL, or the two entities into which it plans to demerge, are nevertheless expected to put their climate reporting to an advisory vote starting at the 2022 AGM.
Facebook sued by shareholders over settlement with FTC
A group of Facebook shareholders are suing the firm for allegedly overpaying billions to the Federal Trade Commission (“FTC”) to protect CEO Mark Zuckerberg from being held personally liable for the Cambridge Analytica data breach. Citing internal discussions between board members, shareholders claim that Zuckerberg, COO Sheryl Sandberg, and other directors authorized a USD 5 billion settlement with the FTC, approximately USD 4.9 billion more than the original penalty of USD 106 million. The settlement is described as “an express quid pro quo” to keep Zuckerberg from being named in the FTC complaint, held personally liable or called for a deposition.
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.