• Executive compensation updates and proxy considerations;
• SEC updates and ESG/DEI trends;
• Proxy disclosure trends and drafting tips;
• Latest proxy advisor and institutional investor policy updates;
• Shareholder proposal highlights.

• Cybersecurity;
• WomenCEO’s study (current situation of Boards and Committees);
• Integration of ESG Factors of Institutional Investors;
• Importance of the Board from the chairmanship;
• New Audit Committee powers.

• The Financial Times reports Disney criticises Nelson Peltz as it rejects activist board nominees: “Media group says Trian co-founder has not ‘presented a single strategic idea’ and questions influence of former Marvel chair Isaac Perlmutter.”
• The Financial Times reports How unions are fighting a boardroom battle at Starbucks: “An SEC rule change giving shareholders more power to exert influence threatens to shake up corporate governance in the US.”
• The Financial Times reports Activist investors mount record number of attacks against companies: “More shareholders are picking proxy fights with businesses whose stock prices have languished.”
• The Financial Times reports Entain appoints head of US activist investor to board: “UK gambling group names Eminence Capital boss to board weeks after exit of its chief executive.”
• CNBC reports Exxon Mobil sues activist investors to prevent climate proposals: “Exxon Mobil filed a lawsuit against U.S. and Dutch activist investors to stop them from filing climate proposals during the oil giant’s shareholder meeting. The complaint was filed Sunday in a Texas court against Arjuna Capital, a Massachusetts-based investment firm, and Follow This, an Amsterdam-based activist investor group. It is thought a court victory for Exxon Mobil could have a chilling impact on future shareholder petitions.”
• The Wall Street Journal reports Tinder Owner Match Draws Elliott Investment: “Activist has roughly $1 billion stake and intends to meet with Match to discuss ways to improve online-dating company’s performance”.

• The Financial Times reports BlackRock stresses financial strength over ESG in company calls: “Report for 2024 on engagement priorities drops reference to global warming.”
• IIGCC published its Net Zero Voting Guidance: “Voting is a critical lever for investors to help support the decarbonisation of the real economy as part of their climate focused engagements and in line with fiduciary duties. The guidance aligns with the Net Zero Investment Framework and its recommendation for a voting policy consistent with assets in the portfolio achieving net zero emissions by 2050 or sooner.”
• The Financial Times reports Insurers in talks to overhaul net-zero group after member exodus: “Net-Zero Insurance Alliance was one of highest-profile victims of US backlash against ESG policies.”
• ICMA publishes voluntary Code of Conduct for ESG ratings and data products providers: “In line with recommendations by the International Organization of Securities Commissions (IOSCO), the Code focuses on promoting transparency, good governance, management of conflicts of interest, and strengthening systems and controls in the sector. As such, it is intended to be internationally interoperable and could be used by jurisdictions where no local Code or regulation is in place.”
• The Wall Street Journal reports More Companies Decide Silence Is Golden When Going Green: “Heightened regulation, industry requirements and increased scrutiny are main reasons given by companies for going silent on green goals”.
• ESGDive reports To keep or not to keep: The fate of scope 3 emissions in SEC’s climate disclosure rule: “Given all of the pushback the agency has received over its proposed rule, particularly scope 3 reporting requirements, experts are uncertain if scope 3 will make the final cut.”

• Fortune reports Annual general meetings have been getting increasingly raucous. Expect them to be chaotic in 2024: “Significant technological shifts, assertive regulators, and increased public reporting transparency are reshaping how boards and management interact with shareholders. This transformation has also sparked a surge in activist engagement, amplified by 24/7 news and social media, which modify and magnify stakeholder perceptions.”
• The Financial Times reports Big Four firms rethink governance after year of mis-steps and scandals: “Auditors and regulators consider ways to strengthen oversight and hold management to account.”

• Reuters reports EU lawmakers back delay to sector-specific ESG corporate disclosures to 2026: “European Union lawmakers on Wednesday backed a two-year delay in sector-specific rules for the oil, energy and mining industries, to make more detailed disclosures on environmental, social and governance (ESG) factors, citing the need to ease regulatory burdens on companies.”
• The Financial Times reports How complex CEO pay structures can ‘camouflage’ overpay: “But excessively convoluted pay systems can be damaging to companies, warns Xavier Baeten, who heads the Executive Remuneration Research Centre at Belgium’s Vlerick Business School. Baeten leads an annual study of executive pay at constituents of the Stoxx 600 index of big European companies. As well as comparing the total sums paid out, Baeten’s team devised a system to measure “pay complexity” — using factors such as the number of components in a remuneration package, the number of KPIs set, and the holding period before executives could profit from stock awards. Using a model to compare companies with their peers, taking performance into account, Baeten’s team found that chief executives were more likely to be “overpaid” for mediocre outcomes at companies with more complex pay systems. And perhaps most troublingly for investors, Baeten said there was a “significant and substantial” negative correlation between companies’ pay complexity and their return on assets over a three-year period.”
• The Financial Times reports Bonus cap raises uncomfortable choice for Europe’s banking lobby: “Souring relations with European Commission over such an unpopular issue would risk progress on bigger regulatory battles.”
• ESG Today reports EU Council Agrees on Proposal to Regulate ESG Ratings Providers: “The European Council announced today that it has reached an agreement on a proposal to regulate ESG ratings providers, bringing the providers under the authorization of European markets regulator ESMA, with new rules to increase transparency into the methodologies and models used by the providers, and to address the risk of conflicts of interest.”
• The Financial Times reports European ESG funds face fossil fuel showdown after French ruling: “France’s stipulation for its sustainable ISR label could lead to billions of euros of divestments by pan-European vehicles.”

• FRC Revises UK Corporate Governance Code: “Given stakeholder support for the importance of good corporate governance, the FRC has prioritised revisions to the Code in one significant area - Internal Controls. As signalled on 7 November, the FRC has dropped its earlier proposals for revisions to the Code related to the role of audit committees on environmental, social and governance issues; expanding diversity and inclusion expectations; over-boarding provisions, and expectations on Committee Chairs’ engagement with shareholders.” See the full Corporate Governance Code changes.
• The FCA have set out new rules to encourage companies to list in the UK and other market improvements: “Proposals aimed at making the UK’s listing regime more accessible, effective, and competitive, have today been set out in detail by the Financial Conduct Authority (FCA).” Additionally, a blog posted by the ECGI argues that Dual-class share structures are the wrong answer to the UK listings problem.
• The Times reports My pay is impossible to justify, says Centrica boss Chris O’Shea: “Head of company that owns British Gas compares his £4.5m package with his mother’s pension.”
• The Financial Times reports UK shareholder body to tackle ‘fractious’ relations with boards: “Investor Forum looking to involve listed companies in bid to resolve tensions undermining City of London.”
• The Times reports Vistry chief’s dual role raises ‘amber flags’: “The housebuilder has defended appointing Greg Fitzgerald as both chief executive and chairman, saying it will ‘ensure continuity’”.
• The Times reports Why are companies spending so much on buying their own shares?: “In the past couple of years more of the grit has comprised share-buyback notices, where companies buy their own shares and cancel them. Some days it seems that they dominate all other items.”

• AFG published the 2024 version of its Corporate Governance Recommendations: “The AFG strengthens its recommendations to advance the best principles of corporate governance. Indeed, corporate governance is of particular importance in all the actions of managers, committed to the quality of assets in the portfolio, responsible investment and long-term savings.”
• Forbes reports France Introduces Possible Jail Time As Penalty For Non-Compliance With Sustainability Disclosure: “Corporate sustainability reporting is about to get real. Starting January 1, 2024, the European Union’s (EU) Corporate Sustainability Reporting Directive (CSRD) will officially take effect, requiring in scope companies to disclose information on what they see as the risks and opportunities arising from social and environmental issues, and also on the impact of their activities on people and the environment.”
• The Telegraph reports We won’t sacrifice growth for environmental concerns, says billionaire Louis Vuitton heir: “LVMH cuts back on energy it uses in stores but its supply chain emissions have increased.”

• The Financial Times reports Veteran asset manager hits out at Volkswagen’s ‘flawed’ governance: “Bert Flossbach blames dominance of two controlling investors for share price underperformance at Europe’s largest carmaker.”
• Reuters reports SAP to pay $222 million to settle US bribery charges: “SAP, the German software company, agreed to pay about $222 million to resolve investigations into bribery schemes in seven countries, U.S. authorities said on Wednesday.”
• The Financial Times reports Aurubis sacks top executives after metal thefts: “German copper producer dismisses CEO and two others following independent review.”

• The Financial Times reports ING faces threat of legal action from climate group behind Shell case: “Campaign group claims bank has ‘duty of care’ under Dutch law to not create any danger that could lead to avoidable damage.”

• The Financial Times reports How Meloni’s new ‘Capital Bill’ could backfire on corporate Italy: “Rather than liberalising and boosting investment in local companies, some fear it could now do the reverse.” Meanwhile Milano Finanza reported Federico Freni: I do not agree the criticisms by the Financial Times. They did not come from market players. La Repubblica reports Capitali bill, investors are disappointed: “Restrictions and politicised choices, Italy is taking a step backwards”.
• IlSole24Ore reports Stock exchange: on the Egm, sustainability reports are optional but essential ("Borsa, sul listino Egm resoconti di sostenibilità facoltativi ma essenziali"): “Companies listed on Euronext Growth Milano, as a rule, are not affected by sustainability reporting obligations, nor will they be under the EU Directive 2022/2464, the extension of which only concerns SMEs listed on regulated markets and not on MTF. However, transparency on sustainability can also be an opportunity for these companies, so much so that Assonext and Assonime have promoted a working table from which guidelines for sustainability reporting of companies listed on Euronext Growth Milano have emerged.”
• Milano Finanza reports Non-multiple voting shares: will they end up just like non-convertible saving shares? (“Azioni a voto non plurimo: finiranno come le azioni di risparmio non convertibili?”): “Those who, through multiple voting rights, determine the BoD fees, choose the directors, their roles and their remuneration, take a thick slice of the value generated by the company, even before profits and dividends. To say nothing of the indirect benefits and of the power – which also represents value itself – that the control implies. Until a decade ago, non-convertible saving shares (nss) were quite common on the stock exchange. They were devoid of some rights, typically the right to vote during shareholders’ meetings, but they had a mark-up and a pre-emption on profit and capital distributions. Despite the increased dividends, the nss were trading at a discount, usually 20-25%, compared to ordinary shares; a sign that being able to influence the company’s governance and director elections had a real and significant value".
• Il Sole24Ore reports Governance, guidelines for listed companies about to be published (“Governance, arrivano le linee guida per le quotate”): “The first act of the new chairman of the Corporate Governance Committee, Massimo Tononi (who took over from Lucia Calvosa in mid-month), is the letter to listed companies in which, in addition to a review of the application of the Corporate Governance Code, recommendations are provided for the coming year, in fact the agenda for 2024. The Committee - promoted by Abi, Ania, Assogestioni, Assonime, Borsa Italiana and Confindustria - draws particular attention to four points (business plan, pre-consultation disclosure, optimal composition of the board of directors, increased voting rights), also addressing listed companies with headquarters abroad, which now account for more than a third of the capitalisation of Piazza Affari."

• El Confidencial reports BlackRock and GIP analyse how to take 20% of Naturgy with the Government on guard (“BlackRock y GIP analizan cómo tomar el 20% de Naturgy con el Gobierno en guardia”): “The arrival of BlackRock as the indirect owner of the 20% that Global Infrastructure Partners (GIP) has in Naturgy is already being analysed in the New York offices. According to sources familiar with the operation, advisors for the purchase of the infrastructure manager by the American investment giant, announced last Friday, are already considering the most appropriate ways to formalize its entry as the company's second largest shareholder. energy, considered by the Government as a strategic company for Spain (it has critical infrastructures for the security of national supply).“
• El Confidencial reports Criteria and the FROB rise to 50% of the capital in CaixaBank with the ECB on guard (“Criteria y el FROB suben al 50% del capital en CaixaBank con el BCE en guardia”): “The two main shareholders of CaixaBank, Fundación La Caixa and the State through the FROB (Restructuring Fund), are one step away from exceeding 50% of their capital in the bank. These two institutions will go from the 49.5% they currently have to 50.4% in a couple of months after the last share buyback. All if they decide, as everything indicates, not to sell securities when CaixaBank proceeds to redeem the 129 million shares acquired in recent months.”
• El Confidencial reports The funds believe that Gotham has seriously damaged confidence in Grifols and hit the market (“Los fondos creen que Gotham ha dañado gravemente la confianza en Grifols y salpicado al mercado”): “Gotham City Research's analysis report has dealt a blow to Grifols by accusing the Spanish company of manipulating its accounts "to artificially reduce its leverage." The company reacted by describing this information as "false and speculation", although the market seems to be leaning, for the moment, on the side of the fund that brought down Gowex, based on its stock market performance since the publication broke out (-41.23%). The big funds in our country have not ignored it either and believe that the Gotham report has seriously damaged the company's confidence.”

• The Financial Times reports Ryanair boss Michael O’Leary on course for €100mn bonus: “Airline’s shares hit record high, inching closer to target price of €21 for share option reward.”

• The Wall Street Journal reports Votes for Sale! A Startup Is Letting Shareholders Sell Their Proxies: “The company says it helps investors earn extra cash, but critics warn of potential for abuse.”
• The Wall Street Journal reports The Latest Dirty Word in Corporate America: ESG: “Executives switch to alternatives like ‘responsible business’ to describe corporate initiatives.”
• The Financial Times reports Diversity backlash pits activists against corporate America: “Critics of initiatives on US campuses are turning their fire to workplace policies.”
• The Financial Times reports US state leads pushback against company moves to thwart proxy fights: “Oregon is first to intervene in contests between boards and investors after change to director nomination process.”
• The Wall Street Journal reports Finance Executives Hope Certainty Is Ahead on ESG Disclosures: "New environmental, social and corporate-governance disclosure rules can be ‘mind-blowing,’ leaving finance executives to determine reporting requirements even as the list of unknowns grows".
• Ignites reports that Strive's Proxy Arm Sought to Disrupt. But It Has Languished.: “Vivek Ramaswamy’s firm attempted to break into the proxy advisory market about a year ago, but it appears to have had trouble taking market share from Institutional Shareholder Services and Glass Lewis.”
• LegalDive reports Compensation committees face busy dockets in 2024, experts say: “Incentive plan performance ranges, performance periods and the use of discretion in long-term incentive payouts are among the pressing issues compensation panels are expected to address.”

• The Financial Times reports Most Japanese prime-listed companies fail to disclose capital efficiency plans: “Tokyo stock exchange demands action in a bid to lift valuations and improve corporate governance.”
• Nikkei Asia reports Japan to reduce stake that triggers tender offer to 30%: “Japan's Financial Services Agency is planning to lower the threshold that a mandatory tender offer is triggered from aiming to buy a stake of one third or more in a company to 30%, Nikkei has learned. The reason is that in a majority of cases, a shareholder with even less than a third of a stake in a company has effective power to veto resolutions.”
• Nikkei Asia reports ‘Japan is waking up' on corporate governance, Dalton co-founder says: “2023 was a year of progress for Japanese corporate governance reform, says James Rosenwald, the co-founder of Dalton Investments who pioneered activist shareholding in the country. "Japan is waking up. Most CEOs are waking up," Rosenwald told Nikkei Asia in a recent interview, saying that if companies follow his advice, the Nikkei Stock Average could reach 40,000 by 2025.”
• Nikkei Asia reports Tokyo exchange to require English disclosures by Prime market firms: “The Tokyo Stock Exchange (TSE) will require all 1600 or so companies listed on the top-tier Prime market to disclose key information in English, starting in March 2025, Nikkei has learned, in its latest move to attract more foreign investors to the country's top bourse.”

• Bloomberg reports China Revises Company Law to Tighten Capital Contribution Rules: “Chinese lawmakers changed the country’s Company Law by setting tougher capital rules for registering a new firm, an effort to close loopholes in corporate governance and prevent financial risks.”
• SCMP reports China stokes Asia-Pacific demand for sustainable finance despite rising interest rates, driven by Beijing’s carbon ambitions: “In Asia-Pacific excluding Japan, green and sustainability-related bonds helped raise US$134 billion in the year so far, with China accounting for more than half the volume. The region is highly exposed to costly climate change-related events and needs to invest US$71 trillion to achieve net-zero emissions by mid-century.”

• Hedge Week reports AIMA voices concerns over Hong Kong’s draft ‘market sounding’ rules: “AIMA, one of the world’s largest hedge-fund associations has voiced concerns over Hong Kong’s proposed rules for “market soundings”, saying they risk imposing an undue compliance burden on companies and people licensed in the city, according to a report by Bloomberg.”

• The Korea Times reports Listed firms adopt more shareholder-friendly practices as activist funds raise pressure: “Listed firms are increasingly adopting shareholder-friendly practices, including the purchase of treasury stocks, influenced by the growing influence of activist funds and retail investors, according to industry officials, Sunday. The trend is expected to continue throughout 2024. According to the Korea Exchange, 254 listed firms announced plans in 2023 to buy back treasury stocks amounting to a total of 9.16 trillion won ($7.05 billion) in the coming years. In addition to these plans, the firms have already purchased treasury stocks this year, with a total investment of 7.4 trillion won. This represents a significant 21.2 percent increase compared to the purchases made in 2022, indicating a growing trend in such shareholder-friendly activities.”

• Live Mint reports When bankers’ pay was brought under scrutiny, no one saw this coming: “In several instances, RBI has refused to approve a pay hike, delayed approving higher remuneration or even directed an outright pay cut for top executives of private banks”.
• The Hindu Business Line reports Zee’s minority shareholders discuss calling an EGM to oust Goenka: “Some institutional investors may have also approached the Securities and Exchanges Board of India (SEBI) to seek regulatory interventions to address the inordinate delay in the merger of Zee and Sony.”

• The Australian Business Review says Divesting coal doesn't work and ESG needs purpose, say fund managers as greenwashing grows: “Investors need to consider what they are trying to achieve when looking at ESG (environmental, social and governance) funds, because simply divesting fossil fuel assets doesn’t reduce carbon emissions, and companies with Indigenous policies don’t necessarily have better workplace practices.”
• The Australian Financial Review reports Investors ‘flying blind’ over climate lawsuit risks: “Investors and regulators are potentially “flying blind” by overlooking trillions of dollars in damages from climate lawsuits when evaluating the financial risks of major energy companies, according to new research.”
• The Financial Standard Sustainability published BlackRock admits stakeholder pressure on ESG a risk: “For the first time in its quarterly earnings report, BlackRock identified stakeholder pressure on ESG and AI as risk factors that may influence returns.”
• The Australian Business Review reports Government unveils its planned mandatory climate disclosure regime for polluters: “Under the proposed scheme, large companies and asset managers will be required to reveal climate-related risks, risk-management strategies and emissions targets to investors.”