Director’s Domain

June 9, 2022 - Where business meets politics. Activist shareholders are widening their scope, from recent proposals targeting topics like diversity, pay equity, and climate change, to bring one of the most contentious political issues directly into the corporate sphere: At least three shareholder proposals are pressing major retailers to disclose the risks and costs associated with restricted access to abortion for their employees. Meanwhile, a recent study shows that women make up a quarter of executives at S&P 500 companies yet hold only 1% of company share value or about $9 billion worth, compared to the $770 billion worth of company shares held by their male counterparts. Starbucks announces its CEO search will include no internal candidates. And observers suggest that boards will need to stay focused on supply chain issues as they help guide companies through challenging times ahead Read On

June 2, 2022 - Targeted action. Issue-focused shareholder activism has grown in recent years, but how far can it reach? This week’s spotlight article explores the history of shareholder support for gun control and the influence shareholders can have, given the board’s duty to listen. Meanwhile, board of the National Rifle Association re-appointed Wayne LaPierre as executive VP, even as the organization fights a lawsuit alleging financial misconduct at the organization under his leadership. Meta COO Sheryl Sandberg steps down from Meta after 14 years, marking the end of an era for the social media giant. Long-time activist investor Nelson Peltz’s new seat on the Unilever board will allow him to influence what comes next for the consumer goods giant. And Elon Musk calls for Tesla employees to return to the office, a stark contrast to Twitter’s “work from home forever” policy. Is it time to rethink the role of the CEO? Read On

May 26, 2022 - Is volatility the new normal? Boards are no longer bracing for the unprecedented – they must now navigate a landscape where turmoil is standard. Recent surveys show that the global economy slowed in May due to an array of factors including supply chain disruptions, spikes in COVID-19, geopolitical conflicts, and more, while CEOs see gloomy days ahead. Meanwhile, investor expectations continue evolving: a study finds that three out of four investors expect executive compensation to be tied to progress on ESG issues, and shareholders continue to vote against overboarded directors. In other news, Jack Dorsey steps off the Twitter board as Elon Musk says he is lining up more equity financing to complete his acquisition, possibly from Dorsey himself. Continue Reading

May 19, 2022 - Not by laws alone… California’s board diversity legislation may have been overturned, but it has already changed the landscape and we expect boards to continue their diversification efforts. After all, shareholders, consumers, stock exchanges and legislators in other states continue to demand board diversity. Meanwhile, median CEO pay at large corporations, fueled by equity awards, increased to a record $14.7 million in 2021. Intel joins the ranks of companies whose executive pay proposal earned a “No” vote; shareholder advocacy group As You Sow reports that last year, shareholders rejected 16 compensation proposals. The Moderna board faces scrutiny after several high-profile executives have come and gone in quick succession, including a newly appointed CFO who exited after just one day on the job—observers question whether the board is practicing appropriate diligence and oversight around senior hires. Read On

May 12, 2022 - Reality check. Big Oil is bracing for a slew of climate-related shareholder proposals, as activists seek to challenge organizations not only around climate risk disclosure but also for not incorporating sustainability or adhering to promised objectives. Daniel Loeb continues to press Shell to split up the company, separating its renewables and liquified natural gas from its legacy fuel business. In other governance news, a study on CEO pay shows a 19% increase in 2021; about half of the companies in the study tie progress toward ESG metrics in compensation plans. And while the U.S. job market was on the up in April, the tech industry is undergoing a wave of layoffs and restructuring, as market volatility kicks in and money flows less freely. Read On