Activist Database

Activist Deadline Calendar and Board Representation & Standstill Database

Featuring standstill agreement and nomination deadline windows, provisions and timelines

Media Center

Featuring all breaking news and in depth articles and editorial press coverage pertaining to shareholder activism and corporate governance.
CCI Gives Nod to Acquisition of Citrix Systems by Vista and Elliott Managed Funds
Glass Lewis Recommends Healthcare Realty Trust Shareholders Vote 'FOR' Proposed Transaction With Healthcare Trust of America
Sarissa Capital Comments on Alkermes Annual Meeting
Aerojet Rocketdyne Shareholders Elect New Board of Directors
U.S. SEC to Vote on July 13 to Adopt Proxy Rules That Undo Trump-era Condition
Foxtons Has a New Investor and He's Backing Management
Abortion and Other ESG Issues Rise Up the AGM Agenda
Softbank's Fortress Offers $1.5 Billion to Buy Japan's Sogo & Seibu
ISS Urges 'Cautionary Support' for Healthcare Realty Trust Deal With Healthcare Trust of America
Shareholders Back Away From Green Petitions in U.S. Proxy Voting Season
Bed Bath & Beyond Is Burning Through Its Cash Reserves
Kohl's Abandons Sale Talks as Market Turmoil Weighs
Kohl's Says a Real Estate Sale Is on the Table After Scrapping Deal Talks
Supreme Court Climate Ruling Adds Obstacles to SEC Policies
Kohl’s Ends Talks of Its Sale to Vitamin Shoppe Owner Franchise Group
Enthusiast Gaming Files Letter to Shareholders Highlighting the Company's Strong Performance Under Current Leadership
Cevian Increases CRH Stake to 4%
Aerojet Rocketdyne CEO Wins Proxy Fight Against Executive Chair
Investor Group Asks SEC to Investigate Tesla Over Plan to Shrink Board
Analysts Sound Off on What Kohl's Needs to Do Now That Sales Talks Are Over
Investors Push Companies for Specific ESG Actions
Opinion: Warren Buffett Has Advice for the Barbarians at Japan's Gate
How Sovereign Wealth and Pension Funds Have Taken Steps to Improve Their ESG Scores
Aerojet Crashes Into Board Dysfunction
AGM Season in Japan Shines an Unforgiving Light on Corporate Governance
Shareholders Turn to Court to Push Greater Workplace Diversity
ESG Watch: Climate Advocates Were Sidelined This Earnings Season, but They'll Be Back
Billionaire Ryan Cohen's Bet on Bed Bath & Beyond Isn't Going Great

Voting Database

A new searchable database featuring the comprehensive voting records of all top institutional investors. This includes every proposal that was up for a vote and how the investor voted.

2022 Conference

13D Monitor | In The Media
MARKETS

ACTIVIST SPOTLIGHT

7/6/2022

CCI Gives Nod to Acquisition of Citrix Systems by Vista and Elliott Managed Funds

India Infoline (07/06/22)

The Competition Commission of India (CCI) has approved the acquisition of Citrix Systems (CTXS) by funds managed by Vista Equity Partners Management and funds and investment vehicles managed by Elliott Investment Management L.P. The proposed combination will be implemented pursuant to an agreement and a plan of merger entered into and among Citrix, Picard Parent, Picard Merger Sub Inc. (a wholly owned subsidiary of Picard Parent), and TIBCO Software Inc. Specifically, TIBCO, a Vista controlled portfolio company, will combine with Citrix, and Vista and Elliott will ultimately acquire joint control of the combined Citrix/TIBCO business.

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7/6/2022

Glass Lewis Recommends Healthcare Realty Trust Shareholders Vote 'FOR' Proposed Transaction With Healthcare Trust of America

Yahoo! Finance (07/06/22)

Healthcare Realty Trust Incorporated (HR) on Wednesday announced that Glass Lewis & Co. recommends that Healthcare Realty shareholders vote “FOR” the previously announced transaction with Healthcare Trust of America Inc. (HTA). This recommendation joins Institutional Shareholder Services' support as well as the board’s unanimous recommendation that shareholders vote “FOR” the transaction, said HR. In its July 5 report, Glass Lewis stated: “Having reviewed the economic terms of the transaction, we believe the cash-and-stock merger consideration ultimately represents a reasonable price for HR to pay in the transaction, in light of the anticipated benefits and the opportunity to enhance shareholder value. Based on these factors, along with the unanimous support of the board, we believe the proposed merger is in the best interests of HR shareholders.” The report continues, “We find the proposed merger is strategically compelling for HR shareholders and justified from a financial point of view, structured in a reasonable manner that imparts an equitable ownership split in the combined company.”

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7/6/2022

Sarissa Capital Comments on Alkermes Annual Meeting

Business Wire (07/06/22)

Sarissa Capital Management LP expressed its voting intentions for the upcoming Alkermes (ALKS) annual meeting and its underlying motivation. "Despite Alkermes growing revenues in the last five years and having annual revenues exceeding $1 billion, Alkermes has consistently operated at a net loss," Sarissa stated. "During the same period, Alkermes stock has declined nearly 60% and underperformed the IBB by approximately 130%. Based on conversations with CEO [Richard] Pops and its experience to date with the Alkermes nomination and governance process, Sarissa believes that certain of the independent directors are uncomfortable making decisions that are not supported by, or that reflect criticism of, CEO Pops." Despite the hope of Sarissa gaining board representation to help generate value for all shareholders, the investor said Pops' rendition of the dialogues in the Alkermes' securities filings "is fraught with misleading statements, inaccuracies, and material omissions." Sarissa calls the company's supposedly detailed abstract of their communications "counterproductive, unprofessional, and...blatantly and materially incorrect." The commentary added that "a policy of releasing misleading summaries of our private conversations is low class. We caution others having seemingly private conversations with Richard Pops that he may be taking notes of each conversation that he intends to later release to the public in a self-serving and misleading way." Sarissa thus supports recently appointed directors, as well as directors Anstice and Dixon's decision to not stand for re-election, which "should create an environment in the boardroom that will enable the directors to do the right thing for shareholders even in the face of resistance from Pops." Given Sarissa's conviction that Alkermes' shares are substantially undervalued and that its representation on the board can help to unlock such value, the investor plans "to vote 'for' the Alkermes slate of directors (which consists entirely of recently appointed directors) at the upcoming annual meeting. If, however, a Sarissa representative is not soon appointed to the Alkermes board, then we will take steps under Irish law to quickly call another shareholder meeting that seeks to selectively remove and replace certain board members with those that Sarissa believes will act in the best interest of shareholders."

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7/6/2022

Aerojet Rocketdyne Shareholders Elect New Board of Directors

Yahoo! Finance (07/06/22)

A new Aerojet Rocketdyne Holdings (AJRD) board of directors was elected at a special meeting of shareholders held on June 30. Eileen P. Drake, CEO and president of Aerojet Rocketdyne, said the company was grateful for the engagement and support of shareholders throughout the process. The new board consists of Drake; incumbent independent directors retired Air Force Gen. Kevin Chilton, Thomas Corcoran, and retired Air Force Gen. Lance Lord; and new independent directors Gail Baker, Marion Blakey, retired Marine Corps Maj. Gen. Charles Bolden, and Deborah James, based on the certification of the independent inspector of elections. “Each of our new directors is an accomplished business leader with relevant experience and a history of creating substantial shareholder value,” said Drake. Members of the new board had the privilege of speaking directly with shareholders to discuss company strategy and performance, Drake noted. “We would like to thank our shareholders for their perspectives and feedback and we welcome the opportunity for continued shareholder engagement as we implement a value creation strategy that will strengthen our company, increase value for shareholders, and provide affordable, highly reliable, and innovative products for America's national security and space programs,” Drake said.

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7/6/2022

U.S. SEC to Vote on July 13 to Adopt Proxy Rules That Undo Trump-era Condition

Reuters (07/06/22) Johnson, Katanga

The U.S. Securities and Exchange Commission (SEC) intends to vote on July 13 to adopt rules improving disclosures around proxy voting advice. The rule, which the SEC voted to propose in November, is also expected to undo a Trump-era rule permitting companies a first look at proposals from proxy advisory firms. Further, the SEC will propose a rule that would amend some “substantive bases” for exclusion of shareholder proposals, according to an agency notice. Although industry groups are expected to question whether the SEC's proposed changes are called for, investor advocates are expected to be pleased with the move, which the agency said responds to concerns about the ability of proxy advisers to deliver independent voting advice to their clients in a timely fashion. Separately, the SEC's new proposal on shareholder voting rights comes after a November staff bulletin that sought to make it more difficult for companies to keep shareholder proposals on matters such as workforce diversity or climate from being voted on at annual meetings.

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7/5/2022

Foxtons Has a New Investor and He's Backing Management

Bloomberg (07/05/22) Narayanan, Archana

Jassim Alseddiqi, an Abu Dhabi-based investor who has acquired 2% of Foxtons Group Plc in a personal capacity, said he supports management's plan to turn around the company. This comes after Converium Capital called on the U.K. real estate broker to pursue a formal process to sell itself due to insufficient cost controls. In a letter to management, Alseddiqi wrote, "Any attempts for the company to sell itself at this stage forgoes the massive future potential of the company." However, he voiced concerns about the company, which has lost about 37.5% of its value in the last year, calling for a focus on growth opportunities, including expansion in affluent boroughs and cross-selling its management services. "The company has an inflation protected business model, benefits from an optimal capital structure, high contribution margins, and significant operating leverage," Alseddiqi said.

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7/2/2022

Abortion and Other ESG Issues Rise Up the AGM Agenda

Financial Times (07/02/22) Temple-West, Patrick

While Carl Icahn's battle to stop McDonald's (MCD) from sourcing pork from farms that cage sows in small crates ended in defeat, corporate boardrooms would be wrong to assume that the defeat heralded much of a waning of environmental, social and governance-focused activism, writes Financial Times columnist Patrick Temple-West. "In fact, environmental and social issue advocates — often little-known grinders who fight companies at their annual meetings year after year — scored wins that boards need to recognize and appreciate before the next wave of campaigns comes around. For example, a shareholder campaign to stop companies from including nondisclosure agreements in employment contracts won support at several major companies, while corporate workplace petitions also fared well in 2022. Audit petitions for both social and environmental causes are also rising, though some of this year's climate change proposals failed. "Boardroom battles will settle down for the summer before the first volleys for meetings season 2023 are launched later this year," says Temple-West, with abortion looming as a hot topic. Already, shareholders have pushed a handful of companies to say more about costs and risks to their business from greater restrictions on abortions. Shareholder proposals demanding more such information won 30% shareholder support at TJ Maxx (TJX) and Lowe's (LOW).

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7/2/2022

Softbank's Fortress Offers $1.5 Billion to Buy Japan's Sogo & Seibu

Reuters (07/02/22) Shibu, Ann Maria

Softbank (SFTBY)-owned Fortress Investment Group has offered around 200 billion yen ($1.48 billion) to buy Japanese department store unit Sogo & Seibu from parent Seven & i Holdings (SVNDY), according to a local media report. Fortress has obtained the first refusal right in the acquisition of Sogo & Seibu, amid investor pressure at Seven & i to focus on its core convenience store business. Fortress Investment is also in talks with Japanese electronics and appliance retailer Yodobashi Holdings to collaborate on efforts to revamp the department stores after the acquisition, the report added. Fortress is considering having Yodobashi run its store within the Seibu department in Ikebukuro, Tokyo. ValueAct, which holds a 4.4% stake in Seven & i, had urged the Japanese retailer to sell off Sogo & Seibu, saying the company could more than double its share price by focusing on its convenience stores.

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7/1/2022

ISS Urges 'Cautionary Support' for Healthcare Realty Trust Deal With Healthcare Trust of America

Reuters (07/01/22) Herbst-Bayliss, Svea

Institutional Shareholder Services (ISS) on Friday recommended "cautionary support" for a planned merger between medical offices operator Healthcare Trust of America Inc. (HTA) and its smaller rival Healthcare Realty Trust Inc. (HR). The two real-estate investment trusts announced plans in February to combine in a cash and stock deal that would create the largest medical landlord in the United States, with some 727 properties in its portfolio. Investors, however, have questioned the motivation of the deal. Elliott Investment Management had urged Healthcare Trust of America in October to explore a potential sale, saying the company's longstanding underperformance compared to its peers has stoked frustration among shareholders. But ISS said it appears "that the Healthcare Realty Trust shareholders' 40% of the combined company is just enough to ensure that, if management can replicate its past achievements, the deal will create more value for them than the status quo standalone plan."

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7/1/2022

Shareholders Back Away From Green Petitions in U.S. Proxy Voting Season

Financial Times (07/01/22) Masters, Brooke

Activists filed 389 environmental and social proposals with member companies of the Russell 3000 index this proxy season, according to statistics from The Conference Board. Yet the share of support for environmental proposals dropped to 33% from 37% in 2021. Some of this was due to the fact that 30 of the least controversial proposals were withdrawn after companies agreed to activists’ requests. Those that went to a vote tended to be further reaching or were at companies where management has strongly resisted environmentalist demands, the research shows. The results reflected growing squeamishness among asset managers about tying managers’ hands on climate-related issues. This has been exacerbated by Russia’s invasion of Ukraine, which forced investors and companies to think more about energy security. Proposals asking management to report on several environment-related options drew significantly higher backing than those that sought to restrict management behavior. For example, seven resolutions asking for reports on plastic pollution garnered an average of 45% support, while 10 demands that banks and insurers stop financing new fossil fuel development received average support of just 10%. “Overall numbers don’t lie, but they don’t tell the whole story for this proxy season,” said Merel Spierings, The Conference Board researcher who analyzed the numbers. She said that when the most prescriptive proposals are excluded, support for climate-related resolutions was largely unchanged from last year.

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7/1/2022

Bed Bath & Beyond Is Burning Through Its Cash Reserves

Wall Street Journal (07/01/22) Kapner, Suzanne

Bed Bath & Beyond (BBBY), which this week ousted its chief executive and revealed deep losses, ended May with roughly $100 million in cash, after burning through more than $300 million of its reserves and borrowing $200 million from its credit line. It has already sold off real estate to raise funds. Now, it is working with advisers on cash management and trying to find a buyer for its Buybuy Baby business. Bed Bath & Beyond is searching for a new chief executive to replace Mark Tritton. But Bed Bath & Beyond was troubled well before it hired Tritton. Activists had already unseated the company’s top officials and reconfigured the board after a string of weak financial results. Now, the company is being run by board member Sue Gove, a former retail executive and retail restructuring adviser. In March, the company attracted another investor, Ryan Cohen. In a settlement with Cohen, Bed Bath & Beyond said it would add three new directors and explore strategic options for its Buybuy Baby chain. Analysts are divided about whether the company should sell the division, which is performing better than its flagship chain. A sale would bring upfront cash but would remove a source of future cash flow over the longer term. The board’s chair, Harriet Edelman, told analysts on Wednesday that the strategic review was continuing. “The board sees significant value in Buybuy Baby,” she said. “It is a highly relevant banner with a strong market position and favorable demographics.”

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7/1/2022

Kohl's Says a Real Estate Sale Is on the Table After Scrapping Deal Talks

CNBC (07/01/22) Thomas, Lauren

Kohl's (KSS) is now considering a real estate sale following the termination of deal talks with The Vitamin Shoppe parent Franchise Group (FRG). Macellum has argued that the company should sell and lease back some of its real estate in order to free up capital, although Kohl's has previously balked at such transactions. However, Kohl's stated in its press release on Friday that the board is currently reassessing how the retailer can monetize its real estate. "Now you've got an environment where financing has changed so much that it may in fact be more attractive to use real estate as a monetization vehicle," said Kohl's board chair Peter Boneparth. "When you combine that with what we think the levels of the stock are, it becomes a much different exercise than it was in a previous financing environment. It's no secret that Kohl's has a very big asset on the balance sheet: real estate." The company's real estate portfolio as of Jan. 29 included 410 locations, while it leased another 517 and operated ground leases on 238 outlets. All of its owned real estate was valued at slightly higher than $8 billion then, according to an annual filing. Supporters of sale-leaseback deals call them a convenient tool for raising funds to commit to future growth, provided a buyer exists. But sellers must then meet lease obligations as they would be renting the property they just sold. Those leases could become much harder to break while rents can waver across markets. Kohl's said in its yearly filing that a typical store lease has an initial term of 20 to 25 years, with four to eight five-year renewal options. Kohl's also restated that it seeks to undertake a $500 million accelerated stock buyback later this year. It downgraded its revenue guidance for the fiscal second quarter, citing a recent decline in consumer demand amid record inflation. "Clearly the consumer is under even more pressure today," noted Kohl's CEO Michelle Gass. "We're not immune to that...but Kohl's stands for value. And at times like this it's more important than ever to amplify that message." Gass also said the retailer's partnerships with Amazon and Sephora (LVMUY) remain intact and part of its longer-term strategy to attract new customers. "The conclusion of the board process was absolutely the right answer," she said. Company shares tumbled more than 20% Friday to hit a year-long low, while Franchise Group shares also hit a 52-week low with a 9% decrease.

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7/1/2022

Supreme Court Climate Ruling Adds Obstacles to SEC Policies

Wall Street Journal (07/01/22) Wolfe, Jan; Omeokwe, Amara; Ackerman, Andrew

The Supreme Court’s decision to curb the Environmental Protection Agency’s (EPA) powers could provide legal ammunition for challenges to financial regulations envisioned by the U.S. Securities and Exchange Commission (SEC) and other agencies. The SEC is regarded by legal analysts as an obvious target for challenges employing the logic in the EPA case. The Wall Street regulator is drafting rules to require public companies to disclose climate risks and greenhouse-gas emissions. The ruling’s impact, moreover, could be wider-ranging, touching on initiatives from the Federal Trade Commission, the Consumer Financial Protection Bureau, and other agencies. In its ruling, the Supreme Court said rules that have a wide economic and political impact should be invalidated unless Congress has clearly authorized action by an agency. Legal experts said the Supreme Court detailed factors for lower courts to consider when deciding if a “major question” is implicated by a regulation, and the breadth of the doctrine is likely to be clarified in future Supreme Court cases. This outcome could open the door for lower courts to strike down other regulations in the future.

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7/1/2022

Kohl’s Ends Talks of Its Sale to Vitamin Shoppe Owner Franchise Group

Wall Street Journal (07/01/22) Kapner, Suzanne; Seal, Dean

Kohl’s Corp. (KSS) on Friday called off its sale to Franchise Group Inc. (FRG) amid rising interest rates and an uncertain economic environment. Instead, the department-store operator has vowed to focus on navigating current conditions on its own. Kohl’s Chair Peter Boneparth said in an interview that the retailer's board of directors has confidence in the company’s management to execute its strategic plan. He remarked, "While there was criticism from activists, the vast majority of shareholders are supportive of the direction management is taking the company." Boneparth added that Kohl's is exploring other ways to unlock value for shareholders, including the sale of some commercial real estate. Kohl’s CEO Michelle Gass said in an interview Friday that the retailer is primarily sticking with its playbook of rolling out Sephora shops in more than 850 of its stores by the end of 2023 and opening 100 smaller format stores over the next four years. “Sephora is a game changer,” she remarked. Shares in Kohl’s dropped 20% to $28.68 in Friday trading, as the company also reduced its sales forecast in the current quarter amid a slowdown in consumer spending. Analysts said Kohl’s difficulties will likely mount as the economy weakens. “The challenge now for Kohl’s is how to create new value going forward, beyond the Sephora and small-format initiatives at a time when retail sales are slowing and fears of a recession loom,” said Craig Johnson, president of consulting firm Customer Growth Partners.

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6/30/2022

Enthusiast Gaming Files Letter to Shareholders Highlighting the Company's Strong Performance Under Current Leadership

GlobeNewswire (06/30/22)

In a letter to shareholders ahead of its annual general meeting on July 19, Enthusiast Gaming Holdings (EGLX) said it is looking to move past the distraction caused by dissident shareholder Greywood Investments. Enthusiast said Greywood is trying to hijack the company by taking control of it with a less qualified board and a vague plan with no stated change from its existing business plan. The company said shareholders are right to question who Greywood is and whose interests it serves, considering it has kept details about itself under wraps and there is limited information on who controls the investment firm. Enthusiast says regardless of whether Greywood accepts its offer to appoint a nominee of its choosing, it will conduct a strategic review and retain a highly qualified interim CEO. The company highlighted its strong growth and achievements under the current leadership and encouraged shareholders to vote for all nine of its nominees.

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6/30/2022

Cevian Increases CRH Stake to 4%

Reuters (06/30/22) Humphries, Conor

Cevian Capital has increased its stake in Ireland's CRH (CRH) to 4%, making it the second largest shareholder of the building materials firm after BlackRock (BLK). Cevian disclosed a 3.6% stake in CRH in March. Christer Gardell, managing partner of Cevian, said he sees pent-up demand for the company's products overcoming near-term "cyclical uncertainty." "Despite improved performance over the last few years, CRH is today valued at a record discount to its peers" but has "strong fundamentals," he said in an emailed statement.

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6/30/2022

Aerojet Rocketdyne CEO Wins Proxy Fight Against Executive Chair

Wall Street Journal (06/30/22) Lombardo, Cara

Aerojet Rocketdyne Holdings Inc. (AJRD) CEO Eileen Drake on Thursday prevailed in an unusual proxy fight against the defense supplier's executive chair, Warren Lichtenstein. The eight-member board slate put forth by Drake received nearly 75% of the votes cast based on preliminary tallies. Lichtenstein had proposed his own slate after the two became locked in a bitter internal battle. The rift between the two escalated earlier in the year after Aerojet’s planned $4.4 billion sale to Lockheed Martin Corp. (LMT) collapsed because of opposition from antitrust enforcers.

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7/1/2021

Investor Group Asks SEC to Investigate Tesla Over Plan to Shrink Board

CNBC (07/01/21) Kolodny, Lora

SOC Investment Group has requested that the U.S. Securities and Exchange Commission (SEC) investigate Tesla (TSLA) regarding its intention to shrink the size of its board from eight to seven members and close one slot for an independent director. Tesla stated in its June preliminary proxy filing that Oracle founder Larry Ellison does not intend to stand for reelection at this year's annual shareholder meeting and the company does not intend to replace him. The investor group urged the SEC to reject that filing, according to a letter to the agency. Formerly known as CtW Investment Group, SOC says that Tesla's intention and Elon Musk's continued use of social media to publish material business information without prior approval from a securities lawyer violate the terms of a settlement agreement that Tesla and Musk entered into with the SEC in 2018. SOC's research director Rich Clayton recently told CNBC that his group has been troubled for a long time about "non-independence on Tesla’s board." He cited Tesla's 2016 acquisition of SolarCity, a company founded by Musk's first cousins, funded by Musk, and where he served on the board. "The board has repeatedly made decisions not in the long-term best interests of Tesla, but driven by Elon Musk's personal interests," Clayton stated. "We think other long-term shareholders should be concerned about proposed changes to the board's composition," he said. "The Tesla board has not been willing to respond to shareholders by doing what shareholders say they want. They can evade things shareholders propose and vote for." SOC Investment Group works with union-sponsored pension funds that have approximately $250 billion in assets under management.

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7/5/2022

Analysts Sound Off on What Kohl's Needs to Do Now That Sales Talks Are Over

Milwaukee Business Journal (07/05/22) Lesk, Sari

Kohl's (KSS) has now emerged from two consecutive shareholder campaigns. The 2021 campaign ended with a settlement, and this year's campaign ended with shareholders re-electing existing board directors. Now that Kohl's has taken a potential sale of the business off the table, investor Macellum Capital Management could return with a new proxy contest next year, said Morningstar equity analyst David Swartz. Alternatively, institutional investors could demand major changes that Kohl's executives don't want to make, which might lead to turnover, he added. Vocal shareholders have called for Kohl's to monetize its real estate portfolio, and the company said in its recent announcement that it would explore that possibility. Given the continued pressure from investors, Kohl's should look at opportunities to raise capital, such as by selling some of its real estate, said GlobalData managing director Neil Saunders. Kohl's leaders need the opportunity to focus on running the business, rather than studying potential deals, added Saunders.

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7/4/2022

Investors Push Companies for Specific ESG Actions

Pensions & Investments (07/04/22) Bradford, Hazel

Shareholders filed 20% more environmental, social, and governance resolutions as the 2022 proxy season got underway in early spring, compared with a year ago, according to shareholder advocacy groups As You Sow, the Sustainable Investments Institute, and Proxy Impact. In the U.S., some of the momentum is being attributed to leadership and policy changes at the U.S. Securities and Exchange Commission, as companies have had less success blocking shareholder resolutions and face tougher climate disclosure rules later this year. There is also political pushback in the U.S. against further regulation, but "more and more companies understand that the economy is changing," said Josh Zinner, CEO of the Interfaith Center on Corporate Responsibility, an environmental, social, and governance (ESG) shareholder advocacy group. ICCR members have filed 489 resolutions, compared with 308 last year, and to date, 34 ICCR member-led resolutions have received majority votes, compared with 23 last year. Investors are pushing companies to provide quantitative reporting and specific plans for ESG-related matters. At Toyota Motor's (TM) annual meeting, pension fund investors in the U.S. and Europe confronted its board over lobbying against climate-related regulation of the auto industry. Anders Schelde, CIO of Denmark's AkademikerPension, dismissed Toyota's argument that while its goal is carbon neutrality it also wants to recognize consumer choice. Toyota is jeopardizing its valuable brand by resisting regulation, he said.

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7/3/2022

Opinion: Warren Buffett Has Advice for the Barbarians at Japan's Gate

Bloomberg (07/03/22) Reidy, Gearoid

Japan is becoming increasingly comfortable with foreign private equity funds and activist investors, writes Bloomberg News senior editor Gearoid Reidy, "a development that gives staid boardrooms the chance to enact the unparalleled wisdom of Western management. In reality though, the expertise could just as easily flow the other way." Foreign investors often view Japanese firms' large cash piles as a resource that can be “unlocked” if the right management team is put in place. That often means replacing hugely experienced manufacturing executives with lawyers, financiers, and MBAs. But Berkshire Hathaway (BRK.A) founder Warren Buffett, who poured $6 billion into the country's five largest trading houses in 2020, prefers the passive approach in the country. “We are investors only, and have not committed our funds to Japan with the idea of telling their government, their investors, their people or the CEOs of our investees what to do,” Buffett wrote in an exchange with Andrew McDermott of Mission Value Partners, which the latter shared at the recent ACCJ Shareholder Forum in Tokyo. Westerners tend to approach Japan with the assumption that “we don't have anything to learn from Japan, but that Japan has an enormous amount to learn from us — Japan is the student, we are the teacher,” McDermott said in an interview. That narrative, he says, is “not only factually incorrect, but pernicious, because it impedes our ability to actually learn from some of the things that Japan has done well.”

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7/1/2022

How Sovereign Wealth and Pension Funds Have Taken Steps to Improve Their ESG Scores

Institutional Investor (07/01/22) McElhaney, Alicia

The Global Sovereign Wealth Fund's annual Governance, Sustainability, and Resilience Scoreboard indicates sovereign wealth funds and public pension funds have made progress in terms of environmental, social, and governance (ESG) compliance. Top-performing funds receiving a 96% score included the Canada Pension Plan (CPP) Investments, Dutch fund PGGM, Caisse de Dépôt et Placement du Québec, Singapore's Temasek, Australia's Future Fund, Canada's British Columbia Investment Management Corporation, New Zealand's Super Fund, and the Ireland Strategic Investment Fund. Global SWF Managing Director Diego Lopez pointed to "a positive correlation between high GSR scores and financial returns, especially with the governance aspect." CPP Investments, the largest plan to score so highly, consolidated teams into a "sustainable energies" group, as well as appointed its first chief sustainability officer in 2021. Contributing to its high score was following co-investing strategies and committing to crisis management governance. The Global SWF did not include newcomers in order to compare 2021's scores with 2022 results, determining that sovereign wealth funds had improved their scores by 6% while public pension funds had improved by 5%. "Sovereign Investors are putting a lot of effort [into] becoming more transparent and more sustainable," Lopez noted. The United States ranked 24th with a GSR score of 65%, while Britain ranked 19th with 71%. Middle East and North Africa funds have improved "considerably" since last year, with Qatar's QIA improving its score by 32% thanks to greater transparency online and the hiring of new, ESG-focused workers. Angola's FSDEA raised its score 40%, and the Global SWF found it is "still recovering" from a reputational crisis but has since appointed new leadership and policies for outside managers.

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7/1/2022

Aerojet Crashes Into Board Dysfunction

Reuters (07/01/22) Laughlin, Lauren Silva

Split CEO and chair roles has failed to address board dysfunction at Aerojet Rocketdyne (AJRD). CEO Eileen Drake and Executive Chairman Warren Lichtenstein were locked in a bitter row following a now-defunct sale to Lockheed Martin (LMT). Lichtenstein admitted he attempted to get Drake to change deal terms by offering to purchase her a handbag. Both presented their own slates of board candidates, then Lichtenstein sued Drake for using corporate resources to help repel him. Lockheed withdrew its bid, but the court case forced Aerojet to walk back a press release that undermined Lichtenstein. Shareholders supported Drake on Thursday, and Aerojet's shares are down 16% in the past year while Northrop Grumman (NOC) has risen 30%.

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6/30/2022

AGM Season in Japan Shines an Unforgiving Light on Corporate Governance

Financial Times (06/30/22) Lewis, Leo

Heading into Japan's 2022 season of annual general meetings (AGMs), "the prospects for pyrotechnics seemed high," writes Financial Times Asia business editor Leo Lewis. A record 77 companies faced a record 292 proposals this year. Three of the AGMs carried a wider resonance, says Lewis, "with the accident-prone behemoth Toshiba (TOSBF), unsurprisingly, at their forefront." The second AGM was that of Fujitec (FJTCY). But the third and arguably most significant AGM of the season was held by Toray (TRYIY), writes Lewis, whose longstanding president, Akihiro Nikkaku, has steered the company through a series of reputational disasters arising from data falsification. Nikkaku has managed to weather all this for years because of the very traditional make-up of Toray's shareholder register, but unfortunately for Nikkaku, Japanese-style capitalism may be changing rather more quickly than he bargained for. "Domestic institutional stewardship may not be the painless rubber stamp it once was. At this year's AGM, without any proxy advisory services or activists ranged against him, Nikkaku secured only a 63.7% vote for reappointment — a just-about passing grade, but also a stunning message of disapproval from the kind of investors that have never broken ranks like that before," says Lewis. "The Toshiba and Fujitec AGMs produced eye-catching symptoms but their strains are too unique to travel very far; Toray's has the potential to spread."

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6/30/2022

Shareholders Turn to Court to Push Greater Workplace Diversity

Bloomberg Law (06/30/22) Moreno, J. Edward

Shareholders increasingly are using litigation as a means of holding companies accountable for corporate diversity and inclusion practices and workplace culture. Tesla Inc. (TSLA), for instance, was recently sued by shareholders over allegations that its officers and directors have allowed a "toxic workplace culture" to thrive, exposing the company to potential liability. According to Mike Delikat, an employer-side attorney at Orrick Herrington & Sutcliffe LLP, "These things have now become much more than just individual employment claims, they've become securities litigation against the board of directors because that gets a lot more attention and reaction." Meanwhile, the U.S. Securities and Exchange Commission said it would update existing human capital disclosure requirements by October to mandate more specific and quantitative information about a company's workforce, such as pay equity statistics.

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6/29/2022

ESG Watch: Climate Advocates Were Sidelined This Earnings Season, but They'll Be Back

Reuters (06/29/22) Scott, Mike

Shareholder engagement on climate this earnings season looks disappointing compared with a year ago, but this is more likely a pause than a step backward. Record high oil and gas prices and a shift in focus to energy security provided a very different backdrop this earnings season. Geopolitics had a big impact on the annual general meeting season, said Abhijay Sood, financial sector research manager at British shareholder group ShareAction. Environmental, social, and governance (ESG) matters also face some backlash this earnings season. Mark van Baal, head of shareholder group Follow This, called this earnings season a step back in the fight against climate change. Engine No. 1's refusal to back Follow This' Scope 3 emissions proposal at ExxonMobil (XOM) was "inexplicable," he said. Sood cited fatigue on disclosure as another possible trend but remains optimistic, noting that there was significant investor rebellions at companies, including at Glencore (GLNCY) and Credit Suisse (CS). Further, there has been a backlash against the concept of ESG after it was appropriated by asset managers for a host of products. This change in approach was best illuminated by BlackRock (BLK), which backed 47% of environmental and social shareholder proposals in 2021, but this year said it would back fewer proposals because “many of the climate-related shareholder proposals coming to a vote in 2022 are more prescriptive or constraining on companies and may not promote long-term shareholder value.” Legal and General Investment Management said it voted against 35% fewer companies in 2022 because more companies had unveiled decarbonisation protocols. It said that the decline was evidence that engaging with climate laggards was working and that more companies were now dealing with climate risks.

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6/29/2022

Billionaire Ryan Cohen's Bet on Bed Bath & Beyond Isn't Going Great

Forbes (06/29/22) Debter, Lauren

Ryan Cohen has become king of the meme stocks by investing in troubled companies like GameStop (GME) and Bed Bath & Beyond (BBBY). But his bet on the latter, which he owns nearly 10% of, hasn't panned out thus far. The retailer's stock price took another nosedive on Wednesday, after reporting a 25% drop in quarterly sales, widening losses, and announcing the departure of its CEO. Shares have fallen 66% this year. In an open letter to the retailer earlier this year, Cohen criticized it for paying executives too much while its sales declined, market share fell, and the stock price lagged. He took particular aim at CEO Mark Tritton's compensation. Tritton had attempted to pull off a massive turnaround at the retailer, which included efforts to reduce the overwhelming number of items crammed into stores and introduce more higher-margin, private-label brands. But its turnaround plan collided with a breakdown in the global supply chain, prompting a cascade of delays and out-of-stocks that in turn frustrated customers and lowered sales. "It appears that trying to execute on dozens of initiatives at once is leading to dozens of mediocre outcomes," wrote Cohen in his March letter.

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