Important highlights from upcoming meetings, provided by Glass Lewis’ global research team
Standard Chartered plc London Stock Exchange – May 8
Would you rather have 40% of one, or 20% of two? Rising concerns over the size of executive pension contributions have already derailed the AGM of a major UK financial institution, as HSBC was forced to clarify its approach to the payments under a proposed remuneration policy. Now Standard Chartered may have some explaining to do. While a quick glance at the multinational’s new remuneration policy would appear to indicate a significant reduction for existing executives, from 40% to 20% of salary, it’s worth taking another look – while the company previously capped pension at 40% of base salary, the new 20% limit is calculated off total salary, equivalent to 2x base. In other words, it’s the same limit as before.
Wynn Resorts, Limited NASDAQ – May 7
Wynn’s AGM comes in the wake of multiple investigations into the conduct of founder Steve Wynn – and the company’s initial response, or lack thereof. Both the Nevada and Massachusetts gaming commissions found that a litany of executives and employees had looked the other way; the two agencies have fined the company $55 million in aggregate. For its part, the company has highlighted the remedial actions it has taken after the allegations became public, including a separation from Mr. Wynn with no severance and a full liquidation of his shareholding, company-wide internal trainings and resources, gender pay equity studies, and significant refreshment. Indeed, the board looks very different from a year ago – four independent directors have departed and six new directors were appointed in 2018, including CEO Matthew Maddox.
NewLink Genetics Corporation NASDAQ – May 9
Everyone deserves a second chance. But does that hold true for stock options? Newlink’s AGM agenda includes a proposal that would lower the exercise cost of stock options representing nearly 16% of the company’s outstanding share capital, 99% of which are underwater. With an average exercise price more than 6x the current share price the company felt it needed to do something, and the board considered repricing preferable to granting additional awards or exchanging the options for cash or RSUs. That’s a case for retaining key employees – but the option exchange also covers non-employee directors and executives. Indeed, there’s a separate agenda item to replace hundreds of thousands of options held by the CEO and president. Shareholders who’ve suffered an 80% drop over the past year will have to consider whether it’s appropriate to cushion the blow for directors and management.
Skyworks Solutions, Inc. NASDAQ – May 8
Last year, Skyworks was one of several US companies that received a shareholder proposal calling for a lower 10% special meeting threshold, and responded by instead asking investors to ratify the existing 25% threshold. That was enough for the SEC, which granted no-action relief on the basis that the proposals were equivalent – but it didn’t sit well with shareholders. Less than 52% ratified the existing threshold, and over a quarter voted against the reelection of Balakrishnan Iyer, the governance and nomination committee chair. This year’s AGM agenda includes a shareholder proposal looking to change a threshold, but this time it’s in relation to replacing supermajority requirements with a simple majority vote. The board notes that it tried removing supermajority requirements itself a few years ago, with shareholders declining to go along with the management-supported proposals; however this time might be different due to increasingly strong shareholder interest in instituting this standard in U.S. companies. Indeed during the 2018 proxy season, shareholder proposals regarding simple majority voting received an average of 64% shareholder support, excluding abstentions and broker non-votes.
H & M Hennes & Mauritz AB NASDAQ Stockholm – May 7
Like many other Swedish companies, high street clothier H&M doesn’t disclose much about its remuneration arrangements. Annual bonus is the company’s primary incentive plan, with participants eligible for awards of up to 100% of salary based on performance against (as yet) undisclosed profit, sales and sustainability targets. What exactly is being measured, and where the targets have been set, isn’t exactly clear. That could be set to change, as the AGM agenda includes a shareholder proposal calling for the company to “fully disclose the sustainability targets that must be fulfilled to trigger variable remuneration of senior executives and annually report the performance of senior executives against those targets.” With a controlling shareholder in place, don’t hold your breath waiting to know more; however regardless of the vote outcome, the proposal demonstrates increasing stakeholder interest in the link between compensation and sustainability.
Newell Brands Inc. New York Stock Exchange – May 7
On March 14 Newell announced Michael Polk, the president and CEO since 2011 and a member of the board since 2009, will retire from the company and the board of directors effective June 28, 2019. The board has commenced a search process to identify the Company’s next CEO, and has retained Heidrick & Struggles to assist in a thorough search process. The news caps off a year of changes to the board and management. After agreements with Icahn Capital and Starboard Value resolved proxy fighting in the run-up to the 2018 AGM, the company has seen turnover at the positions of president; chief development officer; chief financial officer; chief accounting officer; and chief operating officer. Moreover three quarters of the board was appointed in the past year, with six directors put forward under the aforementioned agreements with Icahn and Starboard. Elsewhere on the agenda, shareholders will consider an amendment to the company’s existing proxy access bylaws, the need for additional reporting on executive diversity, and an amendment that would allow action by written consent.
OTHER NOTABLE MEETINGS:
- Tele2 AB (NASDAQ Stockholm – May 6)
- The GEO Group, Inc.(NYSE – May 7)
- SIG plc (London Stock Exchange – May 7)
- Investor AB (NASDAQ Stockholm – May 8)
- First Data Corporation (NYSE – May 9)
- Ford Motor Company (NYSE – May 9)
- Globalscape, Inc. (NYSE American – May 9)
- Nucor Corporation (NYSE – May 9)