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Georgeson Monthly Roundup - November 2020
north america
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Latest Georgeson publications

Georgeson memo on ISS 2021 Policy Updates

On 12 November, ISS announced the update of its benchmark policies for the AGM season 2021. As we do customarily, we have put together a memo highlighting the most important changes to the UK & European and US policies with the aim of providing an easy and accessible tool covering what to expect from ISS in the upcoming 2021 AGM season.

Read more about the US and European updates.

Georgeson publishes Part II of its US Annual Corporate Governance Review

Following the release of Part I of our Annual Corporate Governance Review in September 2020, we are pleased to present Part II of the report. Part II offers an expanded analysis of institutional investor voting decisions on key shareholder proposals, as well as say-on-pay proposals and director elections. It also contains a critical review of M&A, proxy contests and investor activism trends from the 2020 proxy season for all U.S. companies.

Read the full report here.

Up next

Upcoming webinar: Wirecard - Dan McCrum from FT shares his story

Monday, 14 December 2020
2 pm GMT │ 3 pm CET │ 9 am ET

Join us on our webinar, when Dan will join Cas Sydorowitz, our Global Head of Activism and M&A, to recap his investigative journey over the last six years and discuss what takeaways the Wirecard story holds for issuers, investors and the market in general.

Register here.

In the media
Georgeson’s Hannah Orowitz quoted in an Agenda Weekly article entitled “E+S Proposals Get ‘More Sticky’”

Data from this year’s proxy season suggests that shareholders are increasingly confident in environmental and social (E+S) proposals they put forward. More resolutions remained on the ballot this year compared to 2019 even though the percentage of resolutions that the SEC permitted companies to omit from proxy statements also increased, according to research from ISS. Georgeson’s Hannah Orowitz, Senior Managing Director, Corporate Governance is quoted in the article saying that the SEC guidance likely drove the decreased willingness of investors to negotiate proposals off the ballot as they got a handle on what types of proposals may get around SEC no-action rules.

Read the full article here.

Georgeson’s Cas Sydorowitz was quoted in a Barron’s article entitled “Expect More ESG Activism and SPACs in 2021

The new year will also see a continuation of recent trends that have bubbled up this year. ESG-focused activism and shareholder proposals will keep rising, Sydorowitz says.

Read the full article here.

Shareholder Activism
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Pan-European developments
  • The Financial Times reports that Investors target French companies over lack of women in top jobs: https://www.ft.com/content/5a1a76f8-1629-4c46-ad2d-bd926a166bbb “Group of asset managers calls on 120 biggest businesses to make 30% of executive management teams female by 2025.”

  • The AMF published its Annual Report On Corporate Governance: https://www.amf-france.org/en/news-publications/news-releases/amf-news-releases/2020s-general-meetings-and-executive-compensation-amf-publishes-its-annual-report-corporate “Since the French Financial Security Act of August 1st, 2003, the Autorité des Marchés Financiers has conducted an annual review of the disclosure of listed companies with regard to corporate governance and executive compensation. This is the opportunity to issue new recommendations for companies, as well as providing new areas for discussion to reinforce best practices. The 2020’s annual report is obviously marked by the context of the health crisis, which has led the authorities to take lockdown measures.”

  • Reinsurance News reports that Court orders Derez and Covéa to pay €19.6mn in compensation to SCOR: https://www.reinsurancene.ws/court-orders-derez-and-covea-to-pay-e19-6mn-in-compensation-to-scor/ “Global re/insurer SCOR has announced that the Paris Commercial Court has ruled against Thierry Derez and Covéa for misconduct during the preparation and execution of Covéa’s unsolicited takeover bid for the French re/insurer.”

  • The HCGE publishes its 7th Annual Report (in French): https://hcge.fr/le-hcge-rend-public-son-7eme-rapport-annuel/ “The High Committee for Corporate Governance (HCGE) is today publishing its seventh annual activity report for the period from September 2019 to September 2020. […] Analysis of the governance and compensation information published in 2020 by SBF 120 companies shows that the degree of compliance with the Code's provisions continues to improve in a context of mature governance. The report explains the positions taken by the High Committee in 2020, particularly on the obligation of discretion imposed on the permanent representatives of corporate directors or on the inclusion of at least one environmental criterion in the determination of the executive's variable compensation.  Finally, starting this year, following the publication of a revised version of the AFEP-MEDEF Code in January 2020, the High Committee conducted an initial analysis of the implementation of targets for increasing the number of women in management bodies and of ratios on pay differentials. With regard to gender diversity, the Committee stressed the need to plan ambitious action plans with quantified targets that include the implementation of targets for increasing the number of women at the highest levels of management. With respect to the ratios on the compensation gap, it recommends that the calculation methodology adopted be more explicit with respect to the inclusion of the compensation components selected and that the scope of the entity or entities concerned be clearly stated, together with an explanation of the reasons for this choice.”
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North America
United States
  • Bloomberg reports that Top Canada Pension Funds Ask for Better ESG Disclosure: https://www.bloomberg.com/news/articles/2020-11-25/top-canada-pension-funds-ask-for-better-esg-disclosures “The heads of eight large Canadian pension funds are pleading with companies to improve their environmental, social and governance disclosure by giving investors “consistent and complete” data.  The leaders backing the initiative include the chiefs of the Canada Pension Plan Investment Board, the Caisse de depot et placement du Quebec, Ontario Teachers’ Pension Plan and PSP Investments, which manages the pensions of federal government employees and the Royal Canadian Mounted Police.”
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Hong Kong
  • Fitch Ratings says in a new report about China’s new 5-year plan that Green Finance to Expand to Support China's Low-Carbon Goals: https://www.fitchratings.com/research/corporate-finance/green-finance-to-expand-to-support-china-low-carbon-goals-03-11-2020 “The green finance market in China will expand, driven by supportive policies and government initiatives, as it is an important tool for policymakers to achieve the country's pledge of net zero carbon emissions by 2060.”

  • SCMP reports that Trump bans US investments in what he calls Chinese ‘military-controlled’ companies, sending Hong Kong, China markets lower: https://www.scmp.com/business/markets/article/3109662/hong-kong-china-markets-tumble-after-trump-bans-us-investments “The executive order, Trump’s first policy action since the November 3 presidential election, would ban investments in 31 companies including China Mobile and China Telecom, from a list of 20 names compiled in June and a list of 11 Chinese entities highlighted in August. The order takes effect from January 11 next year, nine days before the inauguration of president-elect Joe Biden, and US investors holding the stocks will be given a grace period until November 11, 2021 to sell them.”

  • AsianInvestor reports that China’s combined QFII, RQFII could boost futures usage: https://www.asianinvestor.net/article/chinas-combined-qfii-rqfii-could-boost-futures-usage/463954 “China’s move to ease capital market access for foreign investors by combining two of its major inbound investment programmes will broaden asset class choices, with investors showing particular enthusiasm for increased futures trading, say investment industry advisers.”

  • S&P reports that China’s recovery could bring more defaults to light: https://www.spglobal.com/ratings/en/research/articles/201117-china-recovery-could-bring-more-defaults-11742601 “We don't anticipate this run of SOE distress will cause systemic risk, given the default rate in China is still well below 1% of outstanding bonds. However, the government will likely take steps to address investor concerns on information disclosure or poor governance--such as failure to pay even with cash at hand, or moving assets around to limit recovery.”
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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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