Highlights from the world of ProxSeasInsider 300x170Proxy Papers you can’t afford to miss: CD Projekt, Associated British Foods, Christian Dior and Microsoft Corporation.

CD Projekt SA

Warsaw Stock Exchange – November 29

Could the gaming world be facing another takeover? Polish firm CD Projekt, best known for its The Witcher series of video games, has convened an extraordinary meeting at which it proposes to introduce what appear to be a number of takeover defenses. Most significantly, the game developer is seeking to impose a voting limit of 20%; the aim of which, it states, is to encourage a more equitable share purchase price from any possible suitor and mitigate the risk of “chaos and potential confrontation” should it be targeted by a strategic investor whose goals conflict with the company’s vision and growth strategy. In addition, shareholders will be requested to approve a new share repurchase authority, to which it has allocated a total amount of PLN 250 million; the authority does not have a specified time-limit, rather, will be authorized “until such time the allocated funds are exhausted”.

While there are no confirmed reports of a potential takeover on the horizon, the rumor mill is in overdrive, no surprise considering the recent activities of Vivendi at Gameloft and Ubisoft. Whether CD Projekt is trying to prepare for a duel with an end of stage boss or is just seeking to level up its armory is yet to be revealed.

Associated British Foods plc

London Stock Exchange—December 9

The final report of the Executive Remuneration Working Group aimed to encourage issuers to take decisions and craft remuneration structures that were right for their own business, thus avoiding the push for homogeneity at UK plc, which the IA’s group felt may have led to a one-size-fits-all approach to crafting incentive structures. In response, there has certainly been more meat to the disclosure in remuneration reports, with Associated British Foods the latest issuer to take up the baton. The owners of Primark appear to have thought outside the box in attempting to ensure that executives are fairly rewarded, while safeguarding that those rewards are not disproportionate to outcomes for shareholders. In doing so, they have excluded the performance of their sugar business from a portion of the performance framework under the long-term incentive plan. Their thinking? The volatility of sugar prices—something outside of management control—has unfairly impacted long-term incentive outcomes. With the sugar business accounting for over 13% of revenue during the past fiscal year, stripping it out of certain parts of the LTIP may seem like an overly sweet deal for executives, as the value of the company will continue to be based on the final reported financials, in which that business will be included. Nevertheless, the strong disclosure and cogent rationale for the committee’s actions—as well as the fact that LTIP vesting levels were indeed zero for the latest fiscal year—may well represent the spoonful of sweetener shareholders needed to help the medicine go down.

Christian Dior SA

Euronext Paris – December 6

Controlling shareholders and complex ownership structures are quite common amongst French listed entities, and Christian Dior certainly ticks both of those boxes. The Company’s chairman, Bernard Arnault, holds approximately 73% and 84% of the Dior’s share capital and voting rights, respectively. In turn, Dior holds 40.9% of luxury goods producer LVMH (Louis Vuitton), as part of approximately 47% and 63% of the share capital and voting rights owned or controlled by the Arnault family. However, the complexity does not end there: as chairman of Dior, Mr. Arnault’s remuneration is subject to an advisory vote at that company’s AGM, despite much of his remuneration being paid to him for his role as chairman and CEO of Louis Vuitton. Given the sizeable—and extremely valuable—holdings of the Arnault family, it may smell off to some that Mr. Arnault retains the luxury of receiving equity grants from both Dior and LVMH. Certainly, Dior has provided minority shareholders with substantial rewards, both in terms of healthy dividends and strong share price growth, and the ownership structure means any material impact on the outcome of the proposal at the AGM remains impossible. Nonetheless, with approximately 15% of shareholders opposing Mr. Arnault’s remuneration at Louis Vuitton’s AGM in April, it remains to be seen if the heady perfume of strong TSR performance is sufficient to throw shareholders off the scent of a possible clash with Dior’s board at the upcoming AGM.

Microsoft Corporation

NASDAQ – November 30

Tech giant Microsoft faces further restructuring and impairment charges related to its troubled 2014 acquisition of Nokia, in an ongoing struggle to successfully integrate and streamline its handset business. Challenges with Nokia, however, have not dampened its appetite for high profile acquisitions: Microsoft recently beat out Salesforce.com in a hotly contested bid to acquire LinkedIn. Other developments at Microsoft include pivots in its executive compensation program following lackluster support of its 2015 say on pay vote, with reforms including reductions in payout caps that may help to moderate compensation payouts going forward.

The company also reformed its proxy access right to include friendlier features, such as less restrictive indemnification requirements for nominating shareholders. However, some proponents do not believe the proxy access right goes far enough and a shareholder submitted proxy access proposal is on the ballot for the upcoming meeting. The shareholder proponent cites, among other things, the impracticality of achieving the required 3% ownership threshold for shareholder nominations under the current grouping provisions.