Across the Board
How To Integrate ESG: Identify Key Issues, Structure Oversight, Consider Compensation
“A first step for responsible board oversight is to assess the extent to which the company’s existing processes allow for systematic identification and assessment of ESG risks—and whether those processes are inclusive of a wide range of perspectives, to allow the company to consider risks that may not already be on its radar…. “Integrating ESG considerations into boardroom decision-making on strategy needs to happen at both the full board and committee levels—with all significant ESG efforts being reviewed by the full board... this means directors need to ensure material ESG topics are standing items on the board’s agenda in order to address them systematically and integrate them consistently into strategic planning and execution." HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
Study: 2021 CEO Pay Up 19%, Some 50% of Companies Include ESG Metrics in Comp Plan
“Compensation Advisory Partners reviewed chief executive officer pay levels among 50 companies with fiscal years ending between August and October 2021 (defined as the Early Filers). 2021 was a bounce back year. Median financial performance in all measures reviewed was up double digits over 2020 and median CEO total pay was up +19%. Higher bonus payouts, up nearly +75% year over year, drove the increase in CEO pay…. Nearly all Early Filers include a discussion on the ESG strategy and/or compensation-related actions in the proxy statement. Around 50% of these companies include ESG as a metric in the incentive plan design (up from 30% in 2019).” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
Proxy Firm Urges “No” Vote on Amazon’s “Excessive” CEO Pay, Re-election of Comp Committee Chair
“Amazon shareholders have been advised to rebel against the company’s recommendation that they reelect Judith McGrath to its board of directors… Glass Lewis… encouraged shareholders to vote against McGrath—who chairs Amazon’s leadership development and compensation committee—to signal that they are unhappy with how the tech giant has responded to a string of public labor controversies…. As shareholders prepare to vote on the compensation of Amazon’s top employees, Glass Lewis said they [also] ought to be concerned by CEO Andy Jassy’s ‘excessive’ pay.” FORTUNE
New Fund Aims To Challenge BlackRock, ESG-Focused Asset Managers
“An upstart financial firm backed by Peter Thiel and Bill Ackman has a message for American corporations: Focus on making money, not taking stands. Vivek Ramaswamy, who made his fortune in pharmaceutical startups before writing a book last year called ‘Woke, Inc.,’ says he has raised $20 million to start a fund manager that would urge companies not to wade into hot-button social or environmental issues….” WALL STREET JOURNAL
Twitter Deal: Regulators Probe Musk’s Failure to Disclose Stake When It Reached 5%
“Federal regulators are investigating Elon Musk’s late disclosure last month of his sizable stake in Twitter, according to people familiar with the matter, a lag that allowed him to buy more stock without alerting other shareholders to his ownership.” WALL STREET JOURNAL
U.S. Job Market Remained Solid In April…
“The U.S. job market remains red-hot. Employers added jobs 428,000 jobs in April, extending a remarkable comeback in the labor market. The unemployment rate held steady at 3.6% — matching its lowest level since the start of the pandemic. The economy has now replaced nearly 95% of the jobs that were lost when the coronavirus hit…. April was the 12th month in a row that the economy added more than 400,000 jobs. Factories added 55,000 jobs, bars and restaurants added 44,000 and the warehouse and transportation sector added 52,000 jobs.” NPR
…Though Tech Sector Sees Layoffs, Restructuring
“…the tech sector, which boomed during the pandemic, is showing signs of contraction…. The cutbacks are in stark contrast to the rest of the economy, where job-seekers still hold substantial bargaining power and employers contend with rising labor costs amid inflation and a wave of resignations…. According to experts, the factors weighing on the tech industry are unique to a sector that grew at a rapid pace throughout the pandemic, and don’t necessarily indicate a broader slowdown.” CNBC
Activist Applauds Shell’s Progress But Pushes For Split Up of Company
“Activist investor Daniel Loeb, who wants Royal Dutch Shell to break apart, applauded the energy giant's decision to move its headquarters even as he sticks to views that a different corporate structure would make it more successful…. Loeb said… that Shell would benefit from splitting its liquefied natural gas, renewables and marketing business into a separate company...” REUTERS
CEO Evaluation: 3 Questions Investors Ask
“But what are investors really looking for from CEOs?…. 1. Is the CEO confident, but not overconfident?... Investors want to see that the CEO has confidence in the company’s strength — while not being blind to possible imperfections. 2. Is the CEO a straight-talker?... A CEO needs to be able to clearly communicate the truth — even when it’s hard to hear. 3. Do they know how to listen?... One of the biggest red flags for an investor is a CEO who is so focused on their message that they can’t listen to outside perspectives.” HARVARD BUSINESS REVIEW
Kohl’s Shareholders Reject All 10 Directors Nominated by Activist Investor
“Kohl's investors rejected all of activist Macellum Advisors' director nominees… An executive said all 13 Kohl's directors have been re-elected and that none of Macellum's 10 candidates received enough votes to gain board seats…. Macellum… criticized Kohl's for not doing enough to improve its business and pushed the company to put itself up for sale.… The results deal a blow to Macellum after it had received support from a key proxy advisory firm that often guides investor votes. Institutional Shareholder Services recommended that Kohl's investors elect two of the 10 board nominees suggested by Macellum.” REUTERS
From the Boardspan Library
No Small Task: Improving And Measuring Diversity At The Top Requires Continued Attention
“Boards and CEOs exemplify their true character in the manner in which they pursue DEI goals. One board member or senior executive different from all the others is unlikely to make a significant difference. Don’t expect a single minority board member to have a disproportionate impact and, as a result, potentially set this person up for failure. Recognize the research that says meaningful change comes with three members who meet DEI criteria because this intentionally creates an environment in which individuals with different perspectives have a seat at the table.” CORPORATE COMPLIANCE INSIGHTS via BOARDSPAN
