• Preview of 2024 executive compensation matters
• Compensation clawback rule implementation
• Pay versus performance disclosure updates
• New SEC disclosure requirements
• ISS and Glass Lewis updates
• Shareholder proposals and voting trends
• Investor expectations heading into 2024
• Investor voting decisions from the 2023 season

• The Wall Street Journal reports Nelson Peltz to Nominate Himself, Former Disney CFO Jay Rasulo to Disney’s Board: “Move is latest twist in proxy battle between Peltz’s Trian Fund Management and the entertainment giant”.
• The Wall Street Journal reports Elliott’s Push at Phillips 66 Looks Familiar: “The activist investor’s suggestions for the energy company have a proven track record”.
• The Wall Street Journal reports Activist Nuns, With Stake in Smith & Wesson, Sue Gun Maker Over AR-15 Rifles: “Groups argue the company’s leaders put shareholders at risk by making a popular gun often used in mass shootings”.
• Bloomberg reports Carl Icahn Reduces FirstEnergy Stake, Gives Up Board Seat: “The Icahn Group has trimmed its stock holdings in FirstEnergy below the 1.5% threshold that entitled the billionaire investor’s firm to hold board seats under an agreement between the companies, according to a filing. Andrew Teno, a portfolio manager at the investment firm, resigned from the board on Friday, according to the filing.”
• The Times reports Entain gambles on board seat for activist: “Ladbrokes and Coral owner is closing in on a deal with its Wall Street critic Ricky Sandler”.

• MSCI published its Sustainability and Climate Trends to Watch for 2024: “It has become clear over the last decade that environmental, social and governance risks are financial risks. What does that look like for the year ahead? The 2024 edition of MSCI’s Sustainability and Climate Trends to Watch (formerly ESG and Climate Trends to Watch) brings together the key questions that our global research team are asking, and offers thoughtful analyses and useful insights to help assess and navigate the investment landscape that lies ahead.”
• The Financial Times reports that The real impact of the ESG backlash: “As opinions shift, asset managers like BlackRock are talking more about maximising returns than about saving the world.”
• Responsible Investor reports Productive or disruptive? Climate activists at AGMs: “Protests at shareholder meetings could give companies an excuse to revert to virtual AGMs campaigners warn after Sasol cancellation.”
• The Financial Times reports ExxonMobil makes U-turn on monitoring its methane emissions: “US oil major joins UN’s flagship reporting programme after years of resisting external scrutiny.”
• Reuters reports that Big Oil's bid to woo ESG investors fails to impress: “A COP28 pledge by energy majors to reduce their emissions is not enough to convince many sustainable fund managers to include the companies in their portfolios because it omits pollution from the use of oil and gas, six interviews with Reuters show.”
• Bloomberg reports that Climate Talks End with Deal on Transition Away from Fossil Fuels: “The COP28 climate talks in Dubai ended in a historic deal that committed the world to a transition away from all fossil fuels for the first time.”

• The Financial Times reports Why companies are tapping the boardroom for their next CEO: “Non-executive directors are becoming a more realistic option for the top job.”
• The Financial Times reports PwC pushes to loosen rules on independent board members: “Big Four firm under pressure to improve governance after scandal at Australian business.”
• Reuters reports that State Street adds option to fully back corporate boards: “State Street Global Advisors said in May that by next year some investors of its index equity assets could influence their votes by choosing among various policies offered by proxy adviser Institutional Shareholder Services. It has offered seven such policies including the ISS benchmark policy and alternatives that allow investors to cast their votes to emphasize things like socially responsible investing or union-oriented voting priorities.”

• IPE reports EU mulls taxonomy-based climate benchmark label: “The EU has launched a consultation today on a new type of climate benchmark for investors.”
• The Financial Times reports Italy’s veto on French deal shows EU defence consolidation is a distant dream: “Rome’s decision to block Safran’s acquisition of Microtecnica is latest shot in an often strained security relationship.”

• The Guardian reports L&G opens door for huge US-style bonuses for UK asset managers: “Update to pay policy includes room for ‘necessary flexibility’ to attract best talent to London-listed firm.”
• The Financial Times reports Lack of diversity in UK executive pipeline points to slow progress for female CEOs: “25x25 initiative found women under-represented in positions from which FTSE 100 chief executives are typically recruited.”
• The Financial Times reports BP memo denies Bernard Looney pay decision was ‘unduly harsh’: “Oil major briefed leaders on fielding queries over £32.4mn clawback from its ex-chief”.
• The Financial Times reports Santander chair Ana Botín welcomes UK banker bonus cap removal: “Lender says it could change way it pays staff after rule brought in following financial crisis is scrapped”.
• The Financial Times reports UK bans vague ‘sustainability’ fund labels in greenwashing crackdown: “Financial Conduct Authority moves to outlaw ‘misleading’ marketing in $250bn sector.”
• The Telegraph report FTSE chiefs earning 57 times average salaries as City pushes for higher pay: “Square Mile insiders claim pay in Britain is too meagre to attract top talent.” Read the full report here.

• IPE reports France is first country to transpose CSRD into national law: “The Directive will replace the Non-Financial Reporting Directive, laying out much stricter expectations for companies reporting on environmental and social impacts.”
• Les Echos reports CSRD Directive: mobilization and major maneuvers within companies  (“Directive CSRD : mobilisation et grandes manoeuvres au sein des entreprises”) : “A major turning point for some 50,000 companies in Europe from January 1, 2024, this directive, which has just been transposed by France, constitutes an essential step in the construction of the European Green Deal.”
• Les Echos reports Governance: the AMF points out bad practices (“Gouvernance : l'AMF pointe du doigt les mauvaises pratiques”) : “The stock market watchdog published its annual report on corporate governance this Thursday. It remains vigilant on the composition of boards and raises avenues for reflection on the evaluation of directors.” Read AMF’s full proposals.
• Les Echos reports Points of vigilance of the governance policeman for 2024  (“Les points de vigilance du gendarme de la gouvernance pour 2024”) : “The High Corporate Governance Committee singles out EssilorLuxottica in its tenth report. For the coming year, he plans to deepen his thoughts on social and environmental responsibility (CSR).”
• The Financial Times reports France seeks weaker EU due diligence rules for banks: “Paris pushes against lenders being held liable for clients’ environmental or human rights shortcomings.”

• Börsen-Zeitung reports Funds are calling for a higher quota of women in DAX companies (“Fonds fordern höhere Frauenquote in Dax-Konzernen”): “Large fund companies are demanding that the DAX companies increase the quota of women. By 2030, 30% of board positions should be held by women.”
• Handelsblatt reports This is how much the supervisory boards of the DAX companies earn (“So viel verdienen die Aufsichtsräte der Dax-Konzerne”): “The supervisory boards of the largest listed companies received around 117 million euros in 2022 – more than ever before. And their compensation should continue to increase.”
• Union Investment reports The majority of DAX companies are not yet climate-fit (“Mehrheit der DAX-Unternehmen noch nicht klimafit”): “Only just under a third of DAX companies achieved good to very good results in a climate study by Union Investment. The study analyzes CO2 reduction targets, the anchoring of climate aspects in executive board remuneration and the companies' CO2 reduction since 2017. The study shows a mixed picture: Some companies are pioneers, others are clearly lagging behind.”
• Manager Magazin reports On average, women executives on boards earn more than men (“Frauen im Vorstand verdienen im Schnitt mehr als Männer”): “According to a study, female board members of DAX companies earn more on average than their male colleagues. However, both genders had to accept salary cuts last year.”

• Reuters reports Telecom Italia chair set to leave job as Vivendi readies legal battle: “Telecom Italia (TIM) (TLIT.MI) Chairman Salvatore Rossi will not seek another mandate as head of the former phone monopoly's board when his stint ends next year, the executive told Reuters on Wednesday, confirming an earlier source-based report.”
• La Stampa reports Freni (MEF): I expect the “capitali” draft law to see the light before the end of the year (“Freni (MEF): conto che entro fine anno il ddl Capitali vedrà la luce”): “The capital market is suffering, but we have worked in the last year and I expect that the “capitali” draft law will see the light at the Chamber of Deputies and there is a delegation to the government to completely rearrenge the consolidated law on finance".
• Milano Finanza reports Esg, 40% of the main italian mid-cap companies passed the test. Here is the best and the new Standard Ethics ratings (“Esg, promosse il 40% delle principali mid-cap italiane. Ecco la migliore e i nuovi rating di Standard Ethics”): “The rating agency highlights the slow but steady improvements on the front of sustainability, towards the guidelines set by the OECD and the EU.”
• IlSole24Ore reports From Enel to Terna: 16 Italian companies in the Dow Jones sustainability index (“Da Enel a Terna: 16 società italiane nell’indice Dow Jones di sostenibilità”): “Results of the annual rebalancing and reconstitution of the Dow Jones Sustainability Indices (DJSI) announced: here are the Italian companies included.”
• Milano Finanza reports Unicredit accelerates on the slate for the new BoD, which will come out by February. Here are all the names under discussion in the board (“Unicredit accelera sulla lista per il nuovo cda, che arriverà entro febbraio. Ecco tutti i nomi al vaglio del board”): “The slate should be ready well in advance of the deadline. Likely second mandate for ceo Orcel. For the chairmanship, Franco, Tononi or Andreotti (who, however, should step down as Chairperson of the nomination committee) as an alternative to Padoan. But also a current female director may rise to the top.”
• IlSole24Ore reports “The oil and gas industry has no credible plans to achieve zero emissions” (“’L’industria oil&gas non ha piani credibili sull’azzeramento delle emissioni’”): “Sherry Madera, CEO of the environmental certification platform CDP (Carbon Disclosure Project) [states that] the oil and gas industry «is not setting the necessary targets for net zero carbon dioxide emissions», nor reducing them enough to curb the 1.5 degree rise in global temperatures.”
• Milano Finanza reports Are the CEOs of Piazza Affari really green? An analysis of the ESG remuneration of the 40 top managers of the Ftse Mib (“I ceo di Piazza Affari sono davvero green? L’analisi sui compensi Esg dei 40 top manager del Ftse Mib”): “La Sapienza University and Frontis Governance published the first report on the alignment between the 2022 remuneration policies of the CEOs of the companies in the Ftse Mib and the sustainability strategies of the same companies.”

• El Economista reports The Ibex 35 gets worse marks in ESG in the latest review of the Dow Jones Sustainability (“El Ibex 35 saca peores notas en ESG en la última revisión del Dow Jones de Sostenibilidad”): “S&P Global has just published the annual review of its Dow Jones Sustainability World index. In this update, Spain has managed to place 16 of its companies in the benchmark index for sustainable investment, one more than last year. Of the members of the Dow Jones World Sustainability Index, 5% are already Spanish (in 2022, 4.5% were).”
• Deutsche Bank reports 52% of Spanish investors consider that ESG factors improve the return on their investments (“El 52% de los inversores españoles considera que los factores ESG mejoran el retorno de sus inversions”): “More than half of Spanish investors (52%) consider that ESG factors would improve the return on their investments, according to the ESG Survey 2023, the annual survey on environmental, social and governance factors prepared by the Chief Investment Office ( CIO) of Deutsche Bank AG.”
• Expansión reports This is how companies are obliged to increase the female presence on their boards: deadlines, sanctions and quota (“Así están las empresas obligadas a elevar la presencia femenina en sus consejos: plazos, sanciones y cuota”): “The Government relaunches the Law on Equal Representation of women and men in decision-making bodies, which will force large companies to reach a minimum of 40% of women on their boards of directors.”
• La Vanguardia reports Telefónica renews its board of directors (“Telefónica renueva su consejo de administración sin pistas sobre STC”): “This Tuesday, the board of directors of Telefónica approved the appointments of Solange Sobral and Alejandro Reynal as new directors of the company, replacing Juan Ignacio Cirac and Peter Erskine, respectively, who have submitted their resignation to "favor the renewal" of the maximum decision-making body of the company and also because the end of their mandates was approaching.”
• Expansión reports Prosegur appoints Javier Cabrerizo, Fernando Abós and Jaime Ron as CEOs (“Prosegur nombra CEOs a Javier Cabrerizo, Fernando Abós y Jaime Ron”): “Prosegur is preparing to address its 2024-2027 Strategic Plan, with a new organizational structure, which includes the appointment as CEOs of Javier Cabrerizo (CEO of Prosegur Alarms), Fernando Abós (CEO of Prosegur Security) and Jaime Ron (CEO of Prosegur Tech ). The three were already part of the management team.”

• Ethos published its voting guidelines for 2024 general meetings: “This new edition sets out Ethos' expectations regarding the sustainability reports of companies listed in Switzerland, which will have to be submitted to a shareholder vote from 2024 onwards. It also rein-forces Ethos' demands on the chairperson of the boards of companies with high CO2 emissions. In future, Ethos will be more demanding in approving their re-election based on their management and supervision of sustainability and climate issues.”
• The Wall Street Journal reports Switzerland Charges Trafigura and a Former Top Executive With Bribery: “Former chief operating officer Mike Wainwright is accused of helping to funnel millions of dollars to an Angolan official, including cash payments.”
• The Financial Times reports UBS chair aims for ‘bloodless coup’ with Sergio Ermotti succession: “Colm Kelleher sets target to compile shortlist for one of biggest roles in global banking.”

• The Financial Times reports Shareholders raise heat on US companies over executive pay: “Remuneration is targeted as environmental and social proposals lose support.”
• The Wall Street Journal reports OpenAI’s Unusual Board: Should It Change Its Structure to Govern Effectively?: “The unique governance arrangement, with a nonprofit overseeing a for-profit arm, raises questions about the job of the board.”
• Bloomberg reports that Young Investors’ Support for ESG Causes Declines in 2023 ‘Gut Check’: “Less than half of Millennial and Gen Z investors, those aged 41 and younger, said they were “very concerned” about environmental issues this year, down from 70% in 2022. That same group is also much less willing to give up market returns to meet their social ideals, according to the survey of about 1,000 investors conducted this fall.”
• ESGToday reports BlackRock CEO Fink Pushes Back Against “Ideological Agenda” Claims at Republican Debate: “BlackRock has come under significant pressure over the past several months at the center of a vocal anti-ESG movement by Republican politicians in the U.S., who have accused the firm of following a social agenda, or of “boycotting” and working to harm energy companies.”
• LegalDive reports Aligning SEC, existing clawback policies: “Companies that already have a policy for going after compensation can help ensure it doesn’t conflict with the mandatory SEC policy taking effect in 2024 by employing tie breakers, says an attorney.”
• Fortune reports Board members are burned out and it’s becoming a ‘recipe for disaster’: “Since the pandemic began, boards have taken on a wider range of issues that were previously handled by the CEO and other top leadership, says Coco Brown, founder and CEO of Athena Alliance, a membership organization for executive women. Directors have also begun to get more directly involved with companies to figure out succession issues, and investigate company culture, she adds”
• The Wall Street Journal reports Berkshire Hathaway’s Board Is Old. Not All Investors Are Happy About That: “Charlie Munger is the fourth longtime Berkshire Hathaway director to die in two years”.

• The Financial Times reports PwC fined $7mn over exam cheating by China and Hong Kong staff: “US regulator says more than 1,000 of firm’s workers cheated on tests designed to familiarise them with US standards.”
• SCMP reports that Climate change: Asia-Pacific firms waver on net-zero action plans as cost realities set in, EY study finds: “Businesses in Asia-Pacific are not moving fast enough on climate action – in fact, they are slowing down – and companies globally are not producing accurate enough climate disclosures to attract green investment, according to a study by accounting and consulting firm EY. Progress is decelerating at a time when acceleration is needed to meet the Paris Agreement’s goal – agreed upon by nearly 200 nations – to contain global warming at 1.5 degrees Celsius, it said. “The 2023 Sustainable Value Study shows that in Asia-Pacific, progress is slowing at a crucial time, and that gains are becoming harder to make,” EY said in a statement last week, citing its study, which comprised a survey and in-depth executive interviews.”

• Financial Times reports that Toyota $2 Billion Denso Share Sale Spurs Hopes of Governance Revolution for Japan: “Influential carmaker may prod other companies to rethink their numerous cross-shareholdings”.

• Bloomberg reports that China Convenes Hong Kong Bankers in Bid to Revive Financial Hub: “China’s financial policymakers are in Hong Kong this week meeting bankers to seek ways to bolster the city’s status as a hub for investments, deals and talent. The Ministry of Finance is convening a meeting Wednesday with bankers as authorities step up efforts to bolster confidence, people familiar with the matter said, asking not to be identified discussing private information. HSBC Holdings Plc, Standard Chartered Plc, Bank of China (HK) are among those invited, the people said.”

• SCMP reports that COP28 tackles climate finance and recognises China’s crucial role in advancing the energy transition: “As a regional green finance hub, China is spearheading Asia’s response to the GST. On December 8, COP28’s Hong Kong Climate Day, an event led by the Hong Kong Ambassadors Club and curated by Wang Shi, founder of DeepRock Group, featured presentations from prominent Chinese business leaders. They covered topics ranging from financing climate-proof technologies to the role of next-generation family offices and technology entrepreneurs. It is hoped that strategic alliances and partnership agreements will be signed to contribute towards the call for developed countries to pledge US$100 billion annually in climate financing for emerging markets.”
• SCMP reports that Climate change: Hong Kong has unique role to play as China’s offshore capital hub for green finance, says UN envoy: “Hong Kong has a unique role to play as China’s offshore capital hub for green finance, as the world’s largest emitter of greenhouse gases needs to accelerate environmentally friendly projects if it is to transition to a low carbon economy, according to the United Nations’ resident coordinator in China. In a world confronted by the challenges of climate change and environmental degradation, green finance has emerged as a vital tool in the transition to a more sustainable and environmentally friendly economy, said Siddharth Chatterjee while speaking at the Hong Kong Financial Forum 2023 on Monday afternoon.”

• Reuters reports Proxy advisory firm urges Raymond's independent directors to probe assault allegations: “Institutional Investor Advisory Services (IIAS), an Indian proxy advisory firm, on Tuesday urged the independent directors of textile company Raymond Ltd to launch an investigation into the allegations of assault against its managing director. According to local media reports, Nawaz Modi Singhania - the wife of Managing Director Gautam Singhania and a board member - alleged that she and her daughter were physically assaulted by Singhania in September 2023.”
• The Wire reports Why IndusInd Bank’s Rejection of an Independent Director’s Reappointment Raises Concerns: “In the context of banks, this was evident when an independent director of IndusInd Bank sought reappointment from shareholders. The reappointment, which had the support of the founders, promoters and the executive management, required the approval of 75% of voting shareholders. On October 5, 2023, the bank’s shareholders rejected the reappointment of Sanjay Asher, senior partner of the prestigious law firm Crawford Bayley and Company, as independent director. This development should raise alarm bells within India’s corporate world. This is because the shareholders’ rejection was not based on any lack of competence on Asher’s part, but because the proxy advisory firms recommended his rejection. The proxy firms did so because Asher was a partner in a law firm, and he was equivalent to a whole-time (executive) director there.”

• The Australian Financial Review reports Banker bonuses favouring opaque social metrics, say proxy advisers: “One of the country’s most influential proxy advisory firms, ISS, is warning investors that executive bonuses at the major banks are becoming less focused on returns in favour of vague metrics such as ‘leading cultural change through energy, positivity, simplicity’. Institutional Shareholder Services has told clients that Westpac, ANZ and National Australia Bank have made a ‘retrograde step’ on pay.”
• The Australian Financial Review reports ‘Stab in the dark’: Why other nations can’t trust our emissions data: “Under-reporting of carbon emissions is rife among the country’s largest oil, gas and coal producers, says Rod Sims, a former Australian Competition and Consumer Commission chairman. 'Patchy monitoring and “rule of thumb” reporting must be replaced with satellite and other technology to end uncertainty stemming from conflicting numbers on emissions.”
• The Conversation reports 3 reasons why removing grazing animals from Australia’s arid lands for carbon credits is a bad idea: “Human-induced regeneration projects claim to regenerate native forests across vast areas, not by replanting trees in cleared areas but by reducing grazing pressure from livestock and feral animals. Projects have sprung up in absurd areas where few trees grow naturally, and where those that do grow are rarely eaten by livestock. These projects are currently producing over 6 million carbon credit units each year for tree growth that either can’t happen, or where growth would have happened anyway. That’s about A$235 million at today’s prices.”