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Georgeson Monthly Roundup - September 2020
north america
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Latest Georgeson publications

Georgeson publishes its European 2020 AGM Season Review

Each year Georgeson publishes an annual review of the European AGM season, containing a comprehensive analysis of trends witnessed in the following major markets: UK, France, the Netherlands, Germany, Switzerland, Italy, Spain and Denmark. We are presenting a thorough analysis of the markets where Georgeson has a widespread client base, and where we are privileged to work closely with many of the leading issuers. Our local client support, thorough investor engagement and deep market expertise allow us to highlight the issues and trends which will be of interest to both companies and investors.

The 2020 AGM season review is available here.

Georgeson publishes its US 2020 Annual Corporate Governance Review Part I

The report provides a comprehensive review and analysis of 2020 proxy season data and trends and investor voting outcomes, including ESG shareholder proposals, director elections, say-on-pay proposals, M&A, proxy contests and investor activism.

The report is available here.

Webinar on October 20 - Couch talk: 2020 AGM season take-aways

Georgeson’s CEO UK/Europe, Domenic Brancati will discuss findings of the past season and highlight key take-aways for 2021 together with a renowned special guest bringing 20+ years of industry experience and ESG insight to this session.

Register to the webinar here.

This is the second of a series of three webinars organised by Georgeson and Computershare. You can watch the first episode of these series of webinars which focuses on the 2020 AGM Season in the UK and the impacts of COVID-19 across Europe here.

Georgeson and Ethos Media held the second edition of the Greek Corporate Governance Summit

On September 17th Georgeson and Ethos ran the second edition of their CG summit, held digitally due to health restriction. In addition to representatives of local institutions such as the Ministry for the Development, Hellenic Stock Exchange, Banking Association and others, the event hosted representatives from international institutional investors, discussing the materiality of ESG factors and their integration in the strategy of investment firms and issuers.

Recording of the event is available here.

Shareholder Activism
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Pan-European developments
  • The Telegraph reports that Unilever's Dutch investors vote to shift headquarters to UK: https://www.telegraph.co.uk/business/2020/09/21/unilevers-dutch-investors-
    “Consumer giant still faces a potential hurdle as Holland’s opposition GreenLeft (GroenLinks) party attempts to derail the unification.”

  • Het Financieele Dagblad reports that Bedrijfselite voelt niks voor wettelijk opgelegd ‘goed gedrag’ (“Corporate elite has no sympathy for legally imposed ‘good conduct’”) (in Dutch): https://fd.nl/ondernemen/1356507/bedrijfselite-voelt-niks-voor-
    . “Directors must behave as responsible citizens. A group of professors has launched a law proposal to this effect. The corporate elite fears above all a large number of lawsuits.”

  • The Financial Times reports that Unilever to spend €1bn cutting fossil fuels from detergents: https://www.ft.com/content/4e814f98-3cfe-480b-8ca5-c0b41d51623b. “Laundry and cleaning ingredients face ‘diesel moment’, says president of home care unit.”

  • Het Financieele Dagblad reports that Nederland steeds vaker juridische uitwijkplaats voor bedrijven (“The Netherlands is increasingly a legal alternative for companies”) (in Dutch): https://fd.nl/ondernemen/1357597/nederland-steeds-vaker-juridische-
    . “The Netherlands is increasingly used as a legal home by foreign companies, instead of as a fiscal haven. They keep their activities, head office and tax liability in other countries, but are attracted by the "flexible" corporate law in the Netherlands. This gives majority shareholders and management much more control over others than would the case in their own country. […] The Netherlands offers the option to give certain shareholders more voting rights than others, the position of chairman of the management board and of the supervisory board may be combined in a one-tier structure and there is no compulsory representation of minority shareholders on the management board or supervisory board. Listed companies also have many options to protect themselves against hostile takeovers or activist shareholders.”
  • Il Sole 24 Ore reports on Svolta per gli standard ESG, in campo le Big 4 ("Turn by ESG standards, in the field the Big Four") (in Italian): https://www.ilsole24ore.com/art/
    “Common Esg reporting standards (environment, social, governance). The market has been asking them for years to reclassify and, above all, compare non-financial information. The Big Four, the world's four largest audit firms, have made a breakthrough in this quest for the Holy Grail.”

  • Il Sole 24 Ore reports on  Atlantia, resa dei conti su Aspi. Cdp pronta al passo indietro ("Atlantia, showdown on Aspi. Cdp ready to step back") (in Italian): https://www.ilsole24ore.com/art/atlantia-resa-conti-aspi-cdp-pronta-passo-
     “Government in the field, the summit between Bertazzo and Cassa does not unblock the negotiations. In the letter of commitments, the reorganization is bound to the satisfaction of the members. Today the board of directors of the holding company.”
  • On September 7, the draft law (Proyecto de ley) that aims to transpose the Shareholders Rights Directive II was published (in Spanish): http://www.congreso.es/public_oficiales/L14/CONG/BOCG/A/BOCG-14-A-28-1.PDF. Among the issues included in said draft law, are: loyalty shares, review of the content of the Remuneration Policy and Remuneration Report, more transparency to institutional investors, special regime for related-party transactions, among other isssues. Such measures may undergo modifications during the parliamentary process.

  • Following the release of Georgeson's European AGM Season Review, El Pais reports that Las empresas europeas recortan más el dividendo que el sueldo de sus ejecutivos por la pandemia (“European companies cut the dividend more than their executives' salaries because of the pandemic”) (in Spanish): https://elpais.com/economia/2020-09-
    “Half of Spanish listed companies adjust payments to their shareholders and only one in four reduce management salaries.”

  • Cinco Dias reports that Los accionistas dan luz verde a la fusión de CaixaBank y Bankia, que celebrarán consejo mañana (“Shareholders give the green light to the merger of CaixaBank and Bankia, which will hold a board meeting tomorrow”) (in Spanish): https://cincodias.elpais.com/cincodias/2020/09/16/companias/1600243138_510395.html. “The main shareholders of Bankia and Caixabank have given the green light to the merger between both institutions that will create the largest bank in the Spanish market.”
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North America
United States
  • Following the release of Georgeson's Annual Corporate Governance Review, Reuters reports on Shareholders warm to proposals focused on climate, social issues: Georgeson: https://br.reuters.com/article/us-funds-shareholders-idUSKBN25V1HG. “In a year shaped by health and economic crises, investors increased support for shareholder proposals that back environmental and social causes, according to data that experts say indicates a trend that will likely intensify in 2021. In light of the coronavirus outbreak and a national focus on racism, experts say shareholders will likely press for more changes next year. ‘The pandemic and the renewed focus across society on racism will mean that next year’s shareholder proposal landscape may bring new kinds of proposals around social justice and anti-racism, as well as employee health and safety issues,’ Orowitz said.

  • A press release was issued to announce that SEC Adopts Amendments to Modernize Shareholder Proposal Rule: https://www.sec.gov/news/press-release/2020-220. “The Securities and Exchange Commission today voted to adopt amendments to modernize its shareholder proposal rule, which governs the process for a shareholder to have its proposal included in a company’s proxy statement for consideration by all of the company’s shareholders.  The principal requirements for: (1) initial inclusion in the proxy statement — the amount and length of ownership of the proposing shareholder — and (2) for subsequent resubmission if the proposal is not approved — the amount of support from other shareholders — have not been substantively amended since 1998 and 1954, respectively.”

  • The Harvard Law School Forum on Corporate Governance hosts a piece on What to Do About Annual Incentive Plans in the Pandemic: https://corpgov.law.harvard.edu/2020/09/11/what-to-do-about-
    “When the Covid-19 pandemic began in March 2020, its economic impact significantly affected the annual incentive plans at many companies. In those early days, thinking the pandemic’s impact would be short-lived, directors discussed several ways to respond. Ideas included resetting goals in light of the macroeconomic impact, calculating bonuses on a ten-month basis (excluding the worst of March and April), or setting a new six-month plan for the second half of the year.”

  • The Wall Street Journal reports that Zillow, Nextdoor and Other Companies Pledge to Add Black Directors: https://www.wsj.com/articles/zillow-nextdoor-and-other-companies-
    . “A new group of U.S. companies is pledging to add a Black director to their boards within the next year in a bid to diversify and help accelerate more inclusion in corporate America.”

  • In the New York Times, Leo E. Strine Jr. and Joey Zwillinger argue about What Milton Friedman Missed About Social Inequality: https://www.nytimes.com/2020/09/10/business/dealbook/milton-friedman-inequality.html. “Since the economist wrote his influential essay on capitalism, the ‘haves’ have gained much – and everyone else has missed out.” Meanwhile, in ProMarket Journal, Luigi Zingales revisits Friedman’s Principle, 50 Years Later: https://promarket.org/2020/09/01/friedmans-principle-50-years-later/. “Thus, Friedman is not necessarily against the idea that individuals or businesses might pursue social objectives different than maximizing monetary returns. He is against the idea that these responsibilities or different objectives might be imposed on shareholders by other constituencies. If we accept a contractarian view of the corporation, it is very hard to disagree with this conclusion.” See here for the full series of articles on the shareholder-stakeholder debate: https://promarket.org/tag/friedman-50-years-later/.
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  • Bloomberg reports that Japan Banks Botch Postal Shareholder Votes for 1,300 Firms: https://www.bloomberg.com/news/articles/2020-09-24/japan-bank-mishandles-
    “Two Japanese providers of shareholder services mishandled postal votes for more than a thousand companies ahead of annual general meetings held this year, underscoring risks stemming from the nation’s continued reliance on manual processes. Sumitomo Mitsui Trust Bank Ltd. failed to count all mailed-in ballots for 975 companies, while Mizuho Trust & Banking Co. found omissions affecting 371 firms, the lenders said Thursday. Both said the errors didn’t affect the results of resolutions adopted at the meetings.”

  • The Japan Times reports that Just 42% of Japanese firms actively promoting women to key posts, survey finds: https://www.japantimes.co.jp/news/2020/09/12/business/
    “Only 42.6 percent of companies in Japan are actively promoting women to managerial positions, down 7.4 points from last year, according to a recent private survey.”

  • The Japan Times reports that SoftBank’s big options bet tests investors' faith in Masayoshi Son: https://www.japantimes.co.jp/news/2020/09/08/business/corporate-
    “Just when investors thought Masayoshi Son was reining in risk at SoftBank Group Corp., the billionaire’s foray into highly leveraged derivatives is giving them fresh reason to worry. The drop came after the conglomerate made massive bets on high-flying technology stocks using equity derivatives — and despite one report that it has billions in paper gains.  Son’s career has been full of head-scratching acquisitions and strategic shifts, but the 63-year-old had spent much of this year taking investor-friendly steps that made it seem he was finally listening to shareholders like activist Elliott Management Corp.”

  • The Japan Times reports that Hedge funds say no turning back on Abe’s Japan reforms: https://www.japantimes.co.jp/news/2020/09/08/business/economy-
    business/hedge-funds-shinzo-abe-japan-reforms/. “For the hedge funds that bet on Japanese firms throughout the past 7 years and pressed them to change, there’s no chance the work that Abe started will be derailed even after he steps down. The genie is out of the bottle, they say, and it can’t be put back in. That’s especially true if, as expected, Abe’s successor continues with his program.”

  • The Japan Times reports that Berkshire Hathaway takes stakes topping $6 billion in Japan's top five trading companies: https://www.japantimes.co.jp/news/2020/08/31/business/corporate-business/
    “Warren Buffett’s Berkshire Hathaway Inc. bought stakes in five of Japan’s biggest trading companies, adding to the billionaire investor’s wager on the commodities sector and marking one of his largest-ever forays into Asia’s second-largest economy.”
South Korea
Hong Kong
  • C Tech reports that When VCs claimed they couldn’t find female investors, these finance industry veterans started their own club: https://www.calcalistech.com/ctech/articles/0,7340,L-3848906,00.html. “Orit Alperovitz and Inbal Polak were sick of being the only women in the room, so, they started a women-only investor club and are hoping to change the industry, one investment at a time.”
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Australia & New Zealand
  • The Financial Times reports that Australia’s ‘super’ pension system risks being drawn into its culture wars: https://www.ft.com/content/5f24c03e-ac4e-4f2d-8d73-3e1f99a7d705. “Moves by Canberra to erode superannuation funds criticised on the left as endangering vulnerable workers.”

  • The Financial Times reports that Rio Tinto CEO quits after backlash over Aboriginal site destruction: https://www.ft.com/content/dd75d6da-f047-49d4-9b2e-cfc2ef95df00. “Jean-Sébastien Jacques and two senior executives to leave miner after investor pressure.”

  • The Australian Financial Review reports that New Zealand makes climate reporting compulsory: https://www.afr.com/companies/financial-services/new-zealand-makes-
    “New Zealand has become the first country in the world to make climate risk reporting mandatory for banks, asset managers and insurers. Under new legislation announced on Tuesday morning, large financial institutions would be required to report annually on governance, risk management and strategies for mitigating climate change impacts. The country's Minister for Climate Change, James Shaw, said the mandatory disclosure requirements, which are based on the Task Force on Climate-Related Disclosure (TCFD) framework, would be the first of their kind in the world.”
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Daniele Vitale
Head of Governance UK & Europe > Corporate Advisory
T +44 (0)20 7019 7034 M +44 (0)7747 697 136 F +44 (0)870 702 0158
Moor House, 120 London Wall, London EC2Y 5ET, United Kingdom

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