Highlights ProxSeasInsider 300x170from the world of Proxy Papers you can’t afford to miss: Woodside Petroleum Limited, Santos Limited, Petroleo Brasileiro S.A. (Petrobras), BR Malls Participações S.A., Credit Suisse Group, Ishii Hyoki Company Limited and Nation Multimedia Group Public Company Limited.

Woodside Petroleum Limited and Santos Limited

Australian Stock Exchange – April 21, 2016 and May 4, 2016
The largest and the smallest oil & gas companies in the S&P/ASX 50 by market capitalisation, Woodside Petroleum and Santos, respectively, like about every other oil & gas company in the world been hit hard by the slump and continued volatility in oil prices. While Santos, the Australian energy pioneer since 1954, has not paid any STI or LTI to its executives in 2015, Woodside felt confident enough to pay out 82% of STIs and more than half of LTIs to its managing director, despite negative shareholder return during the year. But give credit where credit’s due – Woodside was the only large oil & gas company in Australia to record a profit in 2015 and continues to operate with a strong balance sheet and sufficient buffer at a break-even point of US$28.40 a barrel. Meanwhile, Santos may not be able to cover its production cost if the price of oil falls below US$32.00 a barrel. The market price has once again dropped sharply (to US$38.68 a barrel) after a meeting of oil producers in Qatar on April 18 failed to deliver an output freeze agreement. Nonetheless, both companies are still standing relatively strong against the market headwinds with dividend yields over 5%, and expectations that the oil price will partially recover later this year, as forecasted by the World Bank, IMF and OPEC.

Petroleo Brasileiro S.A. (Petrobras)

Bovespa – April 28, 2016
Brazil’s largest corporate scandal in history may be about to take down the Brazilian president. With impeachment proceedings reaching the senate just before Petrobras’ annual meeting, the meeting is likely to be yet another boisterous affair. As government insiders continue to run the company, institutional shareholders are likely to keep close tabs on their votes to ensure that they support independent, external candidates – something that can be difficult to manage with Brazil’s complex proxy voting rules and last-minute nominations. Shareholders will also be asked to approve Petrobras’ 2015 accounts, which maintain the same impairment provisions as in 2014, when independent directors who have since resigned objected to these estimations. With mounting losses and seemingly bigger heads rolling every week, shareholders are left to question just how much damage the scandal will do by the time the dust settles.

BR Malls Participações S.A.

Bovespa – April 28, 2016
Proxy access, a hot topic in the US, is making waves this Brazilian AGM season as shareholders take advantage of new access rules meant to facilitate nominations for board seats reserved for minority or preferred shareholders. At BR Malls’ AGM, shareholders will find the first case of these rules being used to propose dissident candidates to a board that does not have a controlling shareholder or preferred shares. Shareholders voting by proxy will have an unprecedented opportunity to support avowedly independent nominees proposed by an institutional investor in a contested election. The dissidents’ strong corporate governance credentials may be enough to sway some institutional investors in their favour despite limited disclosure. If that happens, it may well set a precedent for future contests in Brazil, where the election of external candidates has historically been negotiated during the annual meeting only by those shareholders who were physically present, typically leaving foreign shareholders out of the loop.

Credit Suisse Group

SIX Swiss Exchange – April 29, 2016
After a turbulent year of restructuring, capital raising and unexpected writedowns punctuated by a net loss, Credit Suisse would like to turn the page at this year’s AGM. However the board, and a revamped management team led by Tidjane Thiam, will first have to answer shareholders’ questions regarding the Company’s strategic direction, looming investigations, and Mr. Thiam’s CHF 14.3 million joining award. Of particular interest will be whether the Company’s decision to increase its litigation provision, and failure to reach a civil settlement regarding alleged FOREX rigging, portend a high payout on the horizon. Speaking of payouts, the CEO’s aforementioned “replacement” award stands out due to both its size, and the opaque disclosure of compensation for the rest of the management team, whose pay details are set out in aggregate. Shareholders may well use this AGM as an opportunity to get a bit more detail on the CHF 21 million paid out to five departed executives.

Ishii Hyoki Company Limited

Tokyo Stock Exchange – April 26, 2016
Within the past few years, Japanese companies have made strides to improve their corporate governance practices, especially by appointing multiple independent directors. However, this improvement does not apply for all Japanese companies, such as Ishii Hyoki Company Limited (“Ishii Hyoki”). In this case, it has been over a year since Ishii Hyoki announced that its former managing director and president of its subsidiary, Japan Philippines Namelates, Inc. (“JPN”), committed several acts of misconduct and fraud at JPN. In response to the uncovered misconduct and fraud, Ishii Hyoki pledged at the 2015 AGM to establish a compliance committee to review and strengthen the internal control systems of the Company and its subsidiaries. However, at the 2015 AGM, the Company failed to appoint an independent director and assure shareholders some degree of independent review of the Company’s internal control systems. The Company is now proposing at the 2016 AGM to finally appoint an independent outside director to the six-person board of directors. Even though the Company has not, to our knowledge, been implicated in any illegal activities, there remain serious questions as to how the appointment of just a single independent director will change and improve the Company’s internal control system and its overall corporate governance practices.

Nation Multimedia Group Public Company Limited

Stock Exchange of Thailand – April 27, 2016
At its 2015 AGM, Nation Multimedia Group Public Company Limited’s (“NMG”) chairman, Mr. Nittimon Hastindra Na Ayudhya barred a group of shareholders including News Network Corporation Public Company Limited (“NNC”) and Polaris Capital Public Company Limited (“POLAR”) from attending the meeting. Mr. Na Ayudhya’s executive decision was made after various media outlets reported that the NNC and POLAR were colluding to take over the Company by stealthily acquiring more than 25% of NMG’s issued share capital and violating the relevant laws and regulations concerning the takeover of business. Following the debacle at the 2015 AGM, Thailand’s Office of Securities and Exchange Commission (the “SEC”) filed criminal complaints against NNC and POLAR for acquiring the NMG’s shares to take control without conducting the mandatory tender offering to acquire the NMG’s remaining shares. Additionally, despite the explanation provided for his unusual actions, the SEC also filed a criminal complaint against Mr. Na Ayudhya for infringing on shareholder rights. Mr. Na Ayudhya subsequently refused to enter a settlement process for the complaint as he wished to defend his actions in court, resulting in him being barred as a director of NMG and resigning from the board in late 2015. Although NNC and POLAR beneficially own 9.96% and 6.15% of the Company’s issued share capital, respectively, as at January 13, 2016, the fallout from the ongoing criminal cases will likely make the Company’s 2016 AGM a contentious, noteworthy event.