The 2017 proxy season Summary of the European proxy season and trends affecting the Danish Market. A COMPUTERSHARE COMPANY

Transcription

1 The 2017 proxy season Summary of the European proxy season and trends affecting the Danish Market. A COMPUTERSHARE COMPANY

2 Highlights across Europe Commonly contested resolutions were: authorities to issue shares with or without pre-emptive rights followed by director elections and proposals to approve the remuneration report. During the 2017 AGM season 20 companies out of our FTSE 100 sample received at least one negative recommendation from ISS, and 29 companies received at least one negative recommendation from Glass Lewis. Commonly contested resolutions were: say-on-pay resolutions followed by authorities to issue shares with or without pre-emptive rights. 25 companies received at least one negative recommendation from ISS 22 companies received at least one negative or abstain recommendation from Glass Lewis 33 companies received at least one negative or abstain recommendation from Proxinvest. companies in our CAC40 sample. 2

3 Highlights across Europe Commonly contested resolutions were: related to the discharge of the Management and Supervisory Boards followed by resolutions to approve the remuneration system for executives and resolutions related to Supervisory Board member elections. 11 out of the 30 DAX companies received at least one negative recommendation from ISS. 10 companies in the DAX received a negative recommendation from Glass Lewis Commonly contested resolutions were: authorities to issue shares and authorities to restrict or exclude pre-emptive rights, followed by remuneration related proposals, followed by Board (re)elections. Out of the AEX and AMX companies surveyed four issuers received at least one against recommendation from ISS and four issuers received at least one against recommendation from Glass Lewis. 3

4 Highlights across Europe Commonly contested resolutions related to the approval of the remuneration report, followed by director elections followed by resolutions related to share issuance authorities. 17 companies out of the IBEX 35 received at least one negative recommendation from ISS 16 companies received at least one negative recommendation from Glass Lewis 26 companies received at least one negative recommendation from ECGS. In our FTSE MIB sample, the most commonly contested resolutions were remuneration report votes followed by share issuance authorities related to long-term incentive plans. 21 FTSE MIB companies received at least one against or abstain recommendation from ISS (for a total of 32 resolutions), and 16 FTSE MIB companies received at least one against or abstain recommendation from Glass Lewis (for a total of 30 resolution 4

5 Highlights across Europe Commonly contested resolutions were director elections. The second most commonly contested resolutions were relating to the discharge board and senior management, followed by the advisory vote on the remuneration report 10 out of the 20 SMI companies received at least one negative recommendation from ISS. 11 SMI companies received a negative recommendation from Glass Lewis 18 companies received a negative recommendation from Ethos. 5

6 Denmark Highlights The average quorum for the OMX Large Cap companies surveyed has decreased from 63.4% in 2016 to 61.7% in In our OMX Large Cap sample, a total of two board resolutions failed to gather sufficient support at the AGM of Simcorp due to insufficient capital represented. A total of 24 shareholder proposals were filed at the AGMs of Danske Bank, Københavns Lufthavne, Nets, Nordea Bank, Novo Nordisk, TDC and Topdanmark. Of these, 10 proposals were withdrawn, 12 were rejected due to insufficient support and two were passed. In the 2017 season, 15 of the 38 OMX Large Cap companies surveyed received at least one against recommendation from ISS or Glass Lewis for a total of 24 management and shareholder resolutions. 6

7 48.8% 54.1% 61.5% 63.4% 61.7% Quorum Overview 65% 55% 45% 35%

8 Number of proposals Contested Resolutions Remuneration Equity issuance Article amendments Share repurchase Other items

9 Number of proposals ISS Negative Vote Recommendations Remuneration Equity issuance Share repurchase Article amendments Other items

10 Number of proposals Glass Lewis Negative Vote Recommendations Remuneration Supervisory Board and Management elections Equity issuance Other items

11 Developments in Denmark EU Shareholder Rights Directive The EU amendments to the shareholder rights directive was formally adopted during the reporting period, and member states will have until the 10 th June 2019 to formally implement the changes. Stewardship Code On January 1, 2017 the new Stewardship Code issued by the Corporate Governance Committee entered into force. Danish Corporate Governance recommendations On 7 July 2017, the Corporate Governance Committee published a proposal for revised recommendations on corporate governance. 11

12 AGM Success Surprises are for Birthdays. Remove the uncertainty Understanding your shareholders Institutional Hedge funds Private Client Brokers Indexers Retail Communicate with the right people Heads of Governance as opposed to fund managers on non tender situations. Remove the surprise Governance How do your agenda items relate to the policies of your investors and the proxy advisors Advanced Warning Advance warning of whom will be voting in a certain way or not tendering. 12

13 Investor Decision Making Process External Influencers External Influencers Corporates (BOD / IR) Pension Funds Research providers Investor Community Investment Decisions PMs / Analysts Governance & Proxy Voting Governance Teams Other critical shareholders Proxy Advisors ISS Glass Lewis Ethos Press Issuers but only during the AGM Institutional voting decisions are made by groups who have limited exposure to BOD / IRO s at the issuer 13

14 Who are the Proxy Advisors? Over 1,200 clients More than 360 staff Covers 20,000 meetings per year Acquired IVOX in Jan 2016 German based Proxy Advisor Acquired Meetyl in June 2015 Owned by Ontario Teachers Pension Plan, and 20% AIMCO Over 1,600 investor clients More than 800 employees 15 offices in 10 countries Covers 38,000 meetings per year Owned by Genstar Capital 14

15 Contact Details Cas Sydorowitz CEO, Corporate Advisory Tel: Mob: Cas has been with Georgeson for since 1998, bringing with him 5 years experience in international investor relations and shareholder identification. At Georgeson, he is responsible for Georgeson s Northern European Proxy and Corporate Advisory business. Cas has a longstanding knowledge of US proxy voting mechanics and key governance matters affecting issuers and shareholders across Europe and the US. Having worked for several activists and against many more he has in-depth experience to support investors or issuers during various activist campaigns. Cas is American having lived in New York, until 2002, when he moved to London to run the European operations. He maintains membership in the ICGN and the ECGI, both governance related organisations that set the agenda for the global governance debate between issuers and shareholders. He has participated in various industry organisations including the Shareholder Voting Working Group in the UK. Domenic Brancati COO, Corporate Advisory Tel: Mob: Domenic.brancati@georgeson.com Domenic has been part of the Georgeson corporate advisory team since He has worked on some of the largest M&A transactions in EMEA. His knowledge of the institutional community has allowed him to advise clients on their shareholder base and to ensure that client objectives are met when coordinating a campaign targeted at this community. Domenic spent over a year in 2008 working with the Australia team and is now based in London running the operations of the Georgeson European team. 15