Monthly Roundup – December 2021
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Latest Georgeson Publications
US & Europe: Georgeson memo about the 2022 ISS updates
Georgeson has published memos summarizing the 2022 ISS updates for the US and European markets. See here for the underlying ISS documents
Europe: Georgeson memo about the 2022 Glass Lewis updates for UK & Europe
Georgeson has published memos summarizing the 2022 Glass Lewis updates for the UK and some major European markets. See here for the underlying Glass Lewis documents
Sweden: Georgeson has published its 2021 Swedish AGM Season Review (in Swedish)
Georgeson’s first review of the Swedish AGM season includes an analysis of OMSX30 companies, excluding those with a secondary listing in Sweden. There are 25 companies included in this analysis in whole or in part. 2021 is the first year in which almost all OMXS30 companies used advance voting and therefore had a final vote for each item on the agenda. Prior to the pandemic and the temporary legislation that allowed all companies to use the advance voting option, votes were conducted by acclamation at the AGM.
Georgeson in the media
US & Europe: Georgeson’s Hannah Orowitz, Domenic Brancati and Daniele Vitale were quoted in IR Magazine
“Climate and social issues expected to be front and center at AGMs: Mike Schnitzel explores the issues that have dominated – and will continue to dominate – AGMs, according to industry watchers, and looks at how the Covid-19 pandemic has changed the way AGMs are conducted”
US: Georgeson’s Brigid Rosati has published an article in Governance Magazine about how ESG profoundly impacted the 2021 US AGM season
“We believe that directors will likely continue to have their feet held to the fire on E&S issues in 2022, especially on diversity, climate change and executive compensation. […] There is a potential that opposition during director elections may increase along with more intense scrutiny. The ‘new normal’ will likely require more shareholder engagement during the off-season.”
UK: Georgeson’s Domenic Brancati and Daniele Vitale were quoted in Investment Week
“Asset managers commit to executive pay engagement following LGIM’s decision to end feedback: Large asset managers have continued to campaign on executive pay despite Legal & General Investment Management’s (LGIM) decision to no longer consult on remuneration and instead focus on its ‘wider ESG work’. Commentators have acknowledged the need to prioritise stewardship activities, but noted that remuneration remains an important area of discussion.”
Georgeson Events
Global: Georgeson’s Daniele Vitale spoke at an ICGN event about Shareholder Proposals
“The filing of shareholder resolutions is one of the instruments in the shareholder toolkit to influence a company’s policies, practices and management related to ESG issues.  This webinar accompanies a new ICGN Viewpoint which explores the various experiences of asset managers, pension funds, interest organizations and leading experts with the (co-)filing of shareholder resolutions. We will review the challenges and obstacles around shareholder proposals and identify best practices to guide investors and companies through the process of filing of proposals.” The related ICGN Viewpoint is available here.
Shareholder Activism

  • The South China Morning Post reports that Kaisa loses control of Nam Tai’s board in epic revolt led by activist shareholder IsZo, adding to the indebted developer’s woes: “Kaisa Group Holdings has lost control of a New York-listed property affiliate after a shareholders’ revolt, in a boardroom defeat that adds to the developer’s woes amid its asset sales plan to stave off defaults. Nearly 60 per cent of Nam Tai’s shareholders, most of whom unaffiliated with Kaisa, voted to eject six Kaisa-appointed directors and replaced them with executives nominated by the third-largest shareholder IsZo Capital Management. US billionaire Peter Kellogg, the second largest shareholder with 19 per cent stake, will stay on at Nam Tai, while Mark Waslen will extend his tenure as director, a position he has held since 2003.”


  • The Wall Street Journal reports that ‘Scope 3’ Becomes Earnings-Call Buzzword: “Executives are getting peppered with questions about Scope 3 emissions on earnings calls, a sign that analysts and investors are drilling into the detail of corporate promises to reduce the carbon footprint of their supply chains. Companies around the world were asked questions that included the term “Scope 3” more than 100 times during calls with analysts so far this year, according to Sentieo Inc., a financial data firm.”

Europe developments

  • The Investment Association has announced that Investors call for continued restraint on executive pay and bonuses in the year ahead: “Investment managers will expect companies to continue to show restraint and restrict executive bonuses where government support has been taken and not paid back during the year under review, the Investment Association’s annual pay guidelines set out today. While the vast majority of companies have been sensitive to the experiences of their stakeholders, including employees and customers, throughout the Covid-19 pandemic when deciding pay and bonuses, investors will be watching to ensure this continues next year, as the country continues to recover from the pandemic.” See the Letter to Remuneration Committee Chairs here and the full Investment Association Principles of Remuneration 2021 here.

  • The Financial Times reports that Sweeping overhaul of UK listing rules comes into force: “Changes by FCA aim to make London more attractive to fast-growing tech companies.” See here for the changes and context:

  • The Times reports that Sensyne fined after misleading adviser over directors’ bonuses: “The healthcare technology company led by Lord Drayson, the former business and science minister, has been fined and censured by the London Stock Exchange for ‘serious failures’ relating to the secret payment of £1 million of executive bonuses, including to the peer. An investigation by the exchange has found that Sensyne misled broking firm Peel Hunt, the company’s nominated adviser, over cash bonuses of £850,000 to Drayson, the founder, chief executive and largest shareholder, and £200,000 to Lorimer Headley, its chief financial officer at the time. The ‘post-IPO’ bonuses were paid to the two directors in December 2018, four months after it floated on AIM, London’s junior market, but were not referred to in the company’s admission document for investors ahead of its listing.”
  • The AMF publishes its annual report on corporate governance and the executive compensation of listed companies: “Against the backdrop of the health crisis, the 2021 annual report is the opportunity to review the functioning of shareholders' meetings and discuss the issues of the adjustment of remunerations and interactions of the board with executive management and shareholders. For the second year running, the report examines the information provided by proxy advisers.” See here for the full report (in French). 
  • The BVI (the German Investment Funds Association) has published its BVI Analysis Guidelines for General Meetings of Shareholders 2022: “Our analysis guidelines for shareholder meetings (ALHV) support fund companies in representing the interests of fund investors in the general meetings of portfolio companies (issuers). The ALHV are not binding, but are intended to promote dialogue between fund companies and companies in terms of good corporate governance. They are revised every year after the Annual General Meeting season.” See the full guidelines here (in English). See the Cover Letter to Issuers here (in German only).

  • Il Sole 24 Ore reports that Consob: per liste cda uscenti focus su trasparenza e no collegamenti (“Consob: focus on transparency and not connections for outgoing board slates”): (in Italian). “‘Ample transparency and documentation of the candidate selection process, including through adequate reporting of board meetings’, enhancement of the role of independent directors and particular attention to the risk of connections with other slates. These are the main guidelines indicated by Consob in its call for the attention of companies and shareholders on the possibility of presenting a slate of candidates for the renewal of the board of directors by the outgoing board, subject to market consultation until 17 December. The issue has taken on particular relevance in recent weeks following Francesco Gaetano Caltagirone’s request to Consob to express its opinion on the slate presented by Generali’s outgoing board and supported by Mediobanca. Consob’s request is however addressed to the entire market, while Caltagirone’s question will be answered in another ad hoc document.” See the full Consob document here.

  • The Italian Corporate Governance Committee has published its 2021 Report on the Evolution of Corporate Governance at Listed Companies: (in Italian). “On 3 December 2021, the Italian Corporate Governance Committee approved its tenth annual report containing the ninth report on the application of the Corporate Governance Code. On the same date, the Chairman of the Committee sent her annual letter to listed companies, in which she made specific recommendations aimed at strengthening practices and encouraging a gradual transition to the new Corporate Governance Code.” See the full report here. See the letter here.  

  • Reuters reports that Telecom Italia rises on speculation KKR ready to make formal bid: “Shares in Telecom Italia rose as much as 4.4% on Monday as investors bet on the possibility that U.S. private equity group KKR is ready to launch a formal takeover offer for Italy's biggest telecoms company following a non-binding approach last month. KKR’s bid approach, which values TIM at 33 billion euros, ($37.21 billion) including debt, is conditional on support from TIM and the Italian government, as well as a four-week due diligence that needs a green light from the company's board which is due to meet on Dec. 17.”

The Netherlands
  • The Corporate Governance Monitoring Committee published their report on compliance with the Code in 2020: “The Committee concludes that listed companies can report more meaningfully on compliance with the Corporate Governance Code. The published report focuses on the quality of reporting by companies on five important themes in the Code: long-term value creation, risk management, culture, diversity and remuneration. The report states that reporting is often insufficiently aligned with the underlying behavioral provisions, as a result of which the significance of reporting on these five important themes is diminished.”

  • Eumedion has published a position statement on special purpose acquisition companies: “Eumedion has published a position statement on special purpose acquisition companies (SPACs). The statement discusses: (i) what a SPAC is; (ii) the benefits of and concerns regarding SPACs; (iii) the current regulatory and listing requirements; and (iv) Eumedion's key messages in relation to SPAC IPOs.”

  • The VEB (the Dutch retail investors’ association) has published its annual letter demanding listed companies produce more in-depth ESG reporting: “There is a need for a more generous way of ESG reporting. They way companies handle and implement ESG reporting, increasingly impacts their reputation, competitiveness and financial results. Since climate policies are on the radar of many shareholders, there is a high demand for enhanced reporting on ESG initiatives that are taken or being considered by listed companies.”

  • The Times reports that Spanish court orders Santander to pay top banker Andrea Orcel €68m for withdrawing job offer: “Andrea Orcel, one of Europe’s top bankers, is set to receive €68 million after Santander was ordered to pay compensation for rescinding an offer to make him chief executive. A Spanish court ruled yesterday that Santander should pay compensation to Orcel at the end of a legal case that has gripped the City of London. Orcel, 58, said he hoped that the decision had ended the dispute, but the bank immediately said it would appeal.”
  • The Irish Times reports that Virtual agms to continue as measures extended: “Companies can continue to hold virtual general meetings following the extension of provisions introduced as a result of the pandemic. The legislation also increases the period of examinership to 150 days and ups the threshold at which a company is deemed unable to pay its debts to €50,000. The interim period of the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 has been extended to April 30th 2022. The act makes temporary amendments to the Companies Act 2014 and the Industrial and Provident Societies Act 1893, ensuring that 240,000 companies and 950 industrial and provident societies in Ireland can hold annual general meetings (agms) and general meetings online. However, virtual meetings may soon be commonplace. Minister for Trade Promotion, Company Regulation and Digital, Robert Troy said work was progressing to put virtual AGMs and general meetings on a permanent statutory footing. He also said the extension of the measures was ‘prudent’ the provisions be retained as a contingency measure, given the resurgence of cases.”
North America
United States

  • SSgA argues that The New DOL Proposal May Change the ESG Game: “The latest proposal matters because we believe that plan sponsors can more confidently incorporate ESG funds into their retirement plans if the proposal is finalized. Although the fiduciary responsibilities of ERISA plan sponsors have remained consistent in previous ESG guidance documents, the continual issuance of guidance under different administrations has led to uncertainty for plan sponsors, resulting in a reluctance to include ESG funds in retirement plans. With increasing reliance on ESG factors in fund construction, we believe that plan sponsors will be closely watching the outcome of this proposal to determine whether they can incorporate ESG funds into their retirement plans in the near future.”

  • The Wall Street Journal reports that SEC Issues New Guidance on Measuring Cost of ‘Spring-Loaded’ Stock Awards: “The Securities and Exchange Commission on Monday issued new guidance on how companies should recognize and disclose compensation costs associated with spring-loaded awards, which are stock options or other awards granted to executives shortly before market-moving news is announced. […] Companies have for years relied on this practice, often to dole out speedy profits to executives, assuming the announcement lifts the stock price. Investors have long considered it misleading, and the SEC monitors related activity for potential securities violations. Spring-loaded options tend to be priced the same day that companies grant them.”

Hong Kong
  • RTHK News reports that Weibo seeks HK listing, raising HK$4.26b: “Weibo said it plans to use the funds raised from its Hong Kong listing to grow its user base and for research and development. But it cautioned that it is "subject to changing laws and regulations regarding regulatory matters, corporate governance and public disclosure" that have increased both its costs and risks of non-compliance.”
  • The Asian Corporate Governance Association has published an Open Letter relating to the Japan Foreign Exchange and Foreign Trade Act (FEFTA): “The Foreign Exchange and Foreign Trade Act (FEFTA) in Japan was revised in November 2019 to ensure that investments in Japanese companies by non-Japanese investors would not pose a risk to Japan’s national security. While ACGA understands the rationale driving the revised law, we raised various concerns regarding the lack of clarity surrounding FEFTA’s implementation. We were pleased that the Ministry of Finance (MOF) subsequently took several measures to improve transparency of the Act, yet key issues surrounding the industry classifications and exemption conditions remained unclear when the new Act became effective in May 2020. In the past few months, we have seen various players within Japan’s investment chain (companies, regulators, and shareholders) take different and often contradictory interpretations of FEFTA. ACGA recognises that there is a difficult balancing act between protecting national security and not impeding the free flow of international capital. To minimise unintended consequences, we believe that an open and transparent discussion on FEFTA among relevant players in Japan’s investment chain is a critical part of the solution.”
  • Fitch Ratings reports that Indian Regulatory Changes to Boost Corporate Governance, Ease Delisting Process: “Recent changes made by the Securities and Exchange Board of India (SEBI) will tighten the rules governing related-party transactions (RPT) and ease the delisting process, says Fitch Ratings. The revised RPT norms will widen the scope of scrutiny and limit the ability of large shareholders - often the founder family or promoters - to enter into RPTs without approval of minority shareholders. This should strengthen the corporate governance of listed companies. The delisting changes should facilitate greater transparency and more effectively balance the interests of acquirers and public shareholders. They should also result in quicker execution. However, the impact on credit profiles will depend on the funding and capital structures after privatisation and the effects these will have on the linkages between various entities in each group.”

  • The Business Times reports that Asia-Pacific ESG AUM hits US$93b in Q3; flows into China sustainability funds turn positive: “Environmental, social and governance (ESG) assets under management (AUM) in the Asia-Pacific hit US$93 billion as at end-September, with over 500 sustainability funds domiciled in the region and about 120 new funds launched this year. ESG AUM in China has also more than tripled year on year to US$49 billion in the third quarter.”

  • AsianInvestor reports that Chinese banks and insurers are failing on corporate governance: “The China Banking and Insurance Regulatory Commission (CBIRC) announced on November 12 that some of the organisations involved in its annual evaluation of banks and insurance firms are failing to meet corporate governance guidelines including shareholders governance, risk control and board governance.”

  • The Australian Financial Review reports that ASIC raises the heat on greenwashing IPO hopefuls: “Companies with grand ambitions to reach net zero emissions from their operations, but without a plan to get there, could fall foul of the corporate regulator’s ramped-up surveillance program for climate-related disclosures.”

  • The Australian Financial Review highlights Directors concerned about climate change but unprepared for it: “More than three-quarters of 2074 non-executive directors across the public, private and not-for-profit sectors are concerned about the threat of climate change to their organisation, but only 18 per cent have undertaken any climate training, according to research from the Australian Institute of Company Directors (AICD).”

  • The Australian Financial Review informs Walking the ESG walk: GPT, Oz Minerals, Aurizon make early strides: “All three – some of the most heavily exposed companies on the ASX to environmental, social and governance challenges are increasingly engaging investors and boards – are striving to avoid the growing taboo of ‘greenwashing’.”

  • The Australian Financial Review reports Private equity faces up to its ESG challenge: “The world of private equity is feeling the heat from ESG investors” “Eventually, being an ESG-focused private equity may mean moving from acting with ESG principles in mind to investing with the specific intention of driving outcomes beyond financial returns.”
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