Proxy voting report - Aegon Asset Management
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Proxy voting report
Quarter 2 2021
Total For Against Abstain
April 67 29 30 14
May 136 84 40 23
June 68 37 24 10
Total may not always sum due to multiple votes at meetings.
April
Votes against
Company Details
Rio Tinto Plc Approve the Remuneration Report for UK Law Purposes
Our major concern centred on the decision to treat the departing executives (who left in
response to the Juukan Gorge Rock Shelters destruction, as good leavers. The Company
argued that, whilst fully recognising the gravity of destruction, it was mindful that the
individuals did not deliberately cause the events, did not do anything unlawful, or engage
in fraudulent or dishonest behaviour. Whilst there may have been legal ramifications
should they have been treated as bad leavers, the destruction of the rock shelters has
done serious reputational damage to the company. It is questionable whether it was
appropriate for good leaver status to be granted. Accordingly, we voted against.
Approve the Remuneration Report for Australian Law Purposes
As above.
Piaggio & C SpA Approve the Remuneration Policy
Our concern centred on the provision enabling the company to pay discretionary bonuses
to reflect transactions or outstanding performance. Variable remuneration should be
structured in such a way that only outstanding performance is rewarded at the top end,
without the need for additional remuneration. The levels of performance target disclosure
is also poor.
Approve the Second Section of the Remuneration Report
Further to our concerns regarding insufficient disclosures, as last year, the CEO received a
maximum bonus for 2020. This was paid, despite a reduction in revenue (the previous four
years had experienced year on year growth), and similarly a fall in EBITDA (again following
four years of growth). The performance target range has not been disclosed. However,
given that the targets would have been set pre-pandemic, the target range did not appear
challenging. As a result there was a disconnect between pay and performance.
Appoint Directors – Against/For
Under the voto di lista system, various slates of directors are proposed, for which
shareholders may only vote for one. We voted in favour of Slate 3 which had been
submitted by institutional investors and was best positioned to represent our views. We
voted against the other two slates
Appoint Internal Statutory Auditors – Against/For
Proxy voting report
Quarter 2 2021
Under the voto di lista system, various slates of internal auditors are proposed, for which
shareholders may only vote for one. We voted in favour of Slate 3 which had been
submitted by institutional investors and was best positioned to represent our views. We
voted against the other two slates.
Authorise Share Repurchase Program and Reissuance of Repurchased Shares
The Company was seeking an authority to purchase back up to 20% of the issued share
capital. We are generally comfortable with amounts up to 10%, and look closely at
authorities above this level. Whilst 20% is in accordance with the maximum permitted
under Italian Law, it exceeds amounts that investors normally tolerate, since dividends or
greater levels of investment are often the preferred use of excess capital. The concern is
exacerbated given the current economic environment.
Deliberations on Possible Legal Action Against Shareholders if Presented by
Shareholders
As no specific proposal on legal actions had been made at the time of voting, it was not
possible to assess the content of such deliberation.
Covivio SA Approve Remuneration Policy of CEO and the Vice CEOs
Our concern centres on the vesting schedule attached to the LTIP which allows for
significant levels of vesting for below average performance. This does not promote
outstanding performance. We voted against the policy which formulises the structure.
Approve Compensation of Christophe Kullman, CEO, Olivier Esteve, Vice CEO and
Dominique Ozanne, Vice CEO
We voted against the compensation paid to executive directors in respect of 2020. The
LTIP grant was not reduced to reflect the significant fall in share price. This can lead to
unjustified windfall gains. Our concern is exacerbated given the less than challenging
performance targets attached - significant levels of vesting for below average
performance.
MTU Aero Engines AG Elect Rainer Martens to the Supervisory Board
Of the six Board members, the Chairman has been on the Board for 14 years. Two others,
Juergen Geissinger and Joachim Rauhut, have been on the Board for 15 years and 11 years
respectively. We did not regard either to be independent on grounds of tenure. However,
neither were standing for re-election. The only board member standing for election this
year was Rainer Martens. He has been appointed to the Board over the past year, and was
until 2018, the Chief Operations Officer of the Company. As a former executive, and in the
absence of a sufficient gap between leaving the company, we did not consider him to be
independent. Given the lack of sufficient independence on the Board prior to his
appointment, the election of Rainer Martens further exacerbated our concern.
Basic-Fit NV Approve the Remuneration Report
Our concern centred on the treatment of outstanding and future LTIP awards. In response
to covid, any outstanding or future awards containing 2020 and/or 2021 performance
years will be excluded when determining whether the required targets have been met.
Whilst we understand the effect covid has had on the company, both over the past year
and the long-term implications, shortening performance periods by removing financially
poor years does not align the interests of participants with those of shareholders, or the
wider stakeholder community. We voted against the report which highlighted changes to
inflight awards.Proxy voting report
Quarter 2 2021
Approve Revised Remuneration Policy for Management Board Members
Our concern centred on the treatment of outstanding and future LTIP awards. In response
to covid, any outstanding or future awards containing 2020 and/or 2021 performance
years will be excluded when determining whether the required targets have been met.
Whilst we understand the effect covid has had on the company, both over the past year
and the long-term implications, shortening performance periods by removing financially
poor years does not align the interests of participants with those of shareholders, or the
wider stakeholder community. We voted against the amended policy which formalised the
changes.
Reelect Hans Willemse to Supervisory Board
The three man Audit Committee included Hans Willemse, who is a shareholder
representative of AM Holding BV, an entity controlled by Rene Moos which controls over
15% of the outstanding shares. As such he cannot be considered to be independent, and
accordingly should not be a member of the Audit Committee. Since an opportunity to vote
on his election is only provided every three years, we voted against his re-election.
Grant Board Authority to Issue Additional Shares up to 10% of the Issued Capita
The Company was seeking two separate general use authorities to allot shares on a pre-
emptive basis and then to disapply those pre-emption rights. In aggregate, the amount
being sought represents 20% of the issued share capital. This exceeds the amount that we
normally tolerate for overseas companies as it is too dilutive to our interests. We voted in
favour of one (up to 10%) and against the other (for the further 10%).
Authorise Board to exclude Preemption Rights from Share Issuances
The Company was seeking two separate general use authorities to allot shares on a pre-
emptive basis and then to disapply those pre-emption rights. In aggregate, the amount
being sought represents 20% of the issued share capital. This exceeds the amount that we
normally tolerate for overseas companies as it is too dilutive to our interests. We voted in
favour of one (up to 10%) and against the other (for the further 10%).
CLS Holdings Plc Re-elect Anna Seeley as Director
We have consistently voted against Anna Seeley's election for a number of years. Whilst
the Board composition has improved in recent years it remains below market practice.
Given that she is not independent (the daughter of the founder) and we question the
contribution she makes, we voted against her re-election.
Eurofins Scientific SE Approve the Remuneration Report
Our primary concern centred on disclosure. No detail of required performance, or actual
performance achieved had been provided. We were therefore unable to ascertain
whether targets were challenging and satisfy ourselves that there was a link between pay
and performance. Furthermore, no detail of grants made during the year has been
provided. Furthermore, the LTI provides for three types of award, one of which does not
require the achievement of pre-determined performance targets upon vesting.
Increase the Authorised Share Capital and Amend the Articles of Association
Approval was sought to increase the authorised share capital from EUR 2,500,000 to EUR
3,500,000. However, it is proposed that the entire increased authority be available for
issue (for a period of five years) on a non pre-emptive basis. This would significantly
exceed the amount that we tolerate for overseas company, and would be potentially too
dilutive to our interests.Proxy voting report
Quarter 2 2021
Approve the Creation of Class C Beneficiary Units and Amend the Articles of Association
The Company had circa 64.5 million Class A Shares, and 63.5 million B Loyalty Shares. It
was proposed to create Class C shares that may be allocated to any holder of a fully paid
up share. To be eligible to receive class C Shares, holders of fully paid up shares must have
held for two years. The holding of the various classes of shares can be cumulated
therefore deviating from the one-share, one vote principle. Given that additional rights
would be disproportionate to initial capital outlay, we voted against the creation.
RELX Plc Approve the Remuneration Report
Our concern centred on the operation of the annual bonus plan in 2020, and in particular
the discretion exercised by the Remuneration Committee in response to covid. Given the
likely affect upon the events business, it was decided to exclude this from the calculation
of group financials for the year. As a consequence, a bonus was paid equal to
approximately 70% of the maximum available. Had the business not been excluded, no
bonus would have become payable. Such an approach did not align with the wider
stakeholder experience.
Amplifon SpA Appoint Internal Statutory Auditors – Against/For
Under the voto di lista system, various slates of internal auditors are proposed, for which
shareholders may only vote for one. We voted in favour of Slate 2 which had been
submitted by institutional investors and was best positioned to represent our views. We
voted against the other slate which was submitted by Ampliter Srl, a 42% shareholder.
Approve the Remuneration Policy
Our main issue concerns the ongoing provision for the payment of discretionary bonuses
in addition to the normal bonus plan.
Approve the Second Section of the Remuneration Report
Discretion had been used (in respect of the period under review) and an additional bonus
equal to EUR 2 million paid to the CEO. This was to reflect the increase in shareholder
value between 2017 and 2019. We strongly oppose such payments since a well structured
remuneration package should adequately incentivise and reward individuals. Other areas,
including a lack of sufficient disclosure of performance targets attached to the normal
bonus and the LTIP, also cause concern.
Authorise Share Repurchase Program and Reissuance of Repurchased Shares
The Company was seeking an authority to purchase back up to 20% of the issued share
capital. Whilst 20% is in accordance with the maximum permitted under Italian Law, it
exceeded amounts that investors normally tolerate, since dividends or greater levels of
investment are often the preferred use of excess capital.
UOL Group Limited Approve the Grant of Options and Issuance of Shares Under the UOL 2012 Share Option
Scheme
The Company was seeking shareholder approval on an annual basis for the following
year’s share option grant. However, the Company had not disclosed the performance
targets (if any) that govern exercise, and provides no information regarding vesting
periods. Given this lack of sufficient information, we voted against.
Approve the Issuance of Equity or Equity-Linked Securities with or without Preemptive
Rights
The Company was seeking an authority to allot up to 20% of its issued share capital on a
non pre-emptive basis. This exceeded the amount that we normally tolerate for overseasProxy voting report
Quarter 2 2021
companies as it is too dilutive to our interests. Our concern is exacerbated since the shares
currently trade at a significant discount to NAV, and no assurance of any issuance price
(relative to NAV) had been provided.
Atlas Copco AB Reelect Staffan Bohman as Director
Staffan Bohman is a member of the four person Audit Committee. Having served the
Board for 18 years, we do not consider him to be independent and accordingly should not
be a member of a committee which should be fully independent.
Reelect Johan Forssell as Director
Johan Forsell was not independent by virtue of being a shareholder representative of
Investor AB. He was also a member of the Audit Committee which should be entirely
independent. Investor AB had three representatives on the Board which was
disproportionate to their shareholding.
Reelect Hans Straaberg as Director
Hans Straaberg was not independent by virtue of being a shareholder representative of
Investor AB. He was also a member of the Audit Committee which should be entirely
independent. Investor AB had three representatives on the Board which was
disproportionate to their shareholding.
Reelect Hans Straaberg as Board Chairman
As above.
Approve the Remuneration Report
Our concern centred on the discretionary bonus paid to the CEO in recognition of his
efforts during the year. This as inappropriate since the company had received government
funding to pay employee salaries. A significant salary increase had also been
implemented. The decisions made by the Remuneration Committee did not reflect the
wider stakeholder experience.
Wihlborgs Fastigheter AB Re-elect Helen Olausson as Director
Our concern centred on the composition of the Audit Committee which included Helen
Olausson who had been on the Board for 14 years. We would therefore question her
independence particularly since her entire tenure has overlapped with the Executive
Chairman. Having previously abstained on her election, we voted against this year.
Re-elect Johan Qviberg as Director
Our concern centred on the composition of the Audit Committee which included Johan
Qvlberg who had been on the Board for 17 years. We would therefore question his
independence particularly since his entire tenure has overlapped with the Executive
Chairman. Having previously abstained on his election, we voted against this year.
British American Tobacco Approve the Remuneration Report
Plc We have long been concerned at the extremely high bonus payments that are consistently
paid under the annual bonus plan. Despite these payments, TSR continues to lag both the
tobacco sector and the wider market. There appears a disconnect between pay and
performance. We were also concerned at the benefits package for the CEO which stands
out amongst his peers.
Re-elect Dimitri Panayotopoulos as DirectorProxy voting report
Quarter 2 2021
As Chairman of the Remuneration Committee, he had been aware of our concerns for a
number of years but failed to address them.
Epiroc AB Reelect Ronnie Leten as Director
Our concern centres on the Chairman’s membership of the Audit Committee. Ronnie
Leten previously served as President and CEO of Atlas Copco until 2017, from which Epiroc
demerged in 2018. He is also one of two shareholder representatives on the Board of
Investor AB which controls 17.12% of the company stock and 22.74% of the voting power.
Since he was clearly not independent, we did not consider his membership of the Audit
Committee to be appropriate – there was sufficient financial expertise and experience
elsewhere on the committee.
FDM Group (Holdings) Plc Approve the Remuneration Report
Our concern centred on the treatment of 2020 annual bonuses. The original targets were
set in March and based upon the 2020 budget, which was set towards the end of 2019. At
the end of the year, the Remuneration Committee exercised discretion and awarded
executive directors bonuses which were in line with the average bonus paid to
"bonusable" staff (70% of the maximum), despite not meeting the original targets. We are
fundamentally opposed to companies paying bonuses when original targets are not met.
Our concern here was exacerbated since executive directors are major shareholders.
There were consequently no retention or motivational issues.
Intesa Sanpaulo SpA Approve the Second Section of the Remuneration Report
Following the onset of covid, targets attached to the annual bonus plan were revised.
Whilst the size of the bonus pool was reduced, executive directors have nevertheless
received sizeable bonuses in a year in which had the targets not been changed, no bonus
would have been paid. We are strongly opposed to changes to inflight arrangements.
Amend the POP Long-Term Incentive Plan
Approval was sought to amend the LTIP, approved in 2018, under which call options vest
based upon the achievement of performance targets measured between 2018 and 2021.
Given the exceptional events of the past year, the Board did not consider it likely that the
option would be in the money and was proposing to amend the plan by lowering the
strike price from its current value to its pre-covid level of EUR 2.5455, and to delay by one
year the 12 month period over which the exercise price is calculated. At the beginning of
the covid pandemic, the European Central Bank requested that banks not pay dividends in
respect of either 2019 or 2020. The Company considered that this had had a negative
effect upon its share price and was making these amendments in an effort to neutralise
this. Whilst we had some sympathy with the company’s situation, we are strongly
opposed to amending grants retrospectively.
Royal Unibrew A/S Allow Shareholder Meetings to be held by Electronic Means Only
Approval was sought for shareholder meetings to be held as virtual-only events. Whilst
there are benefits to being able to attend meetings by electronic means, virtual-only
meetings may hinder exchanges between management and shareholders.
Schneider Electric SE Approve Compensation of Jean-Pascal Tricoire, Chairman & CEO
Our concern centred on the discretion exercised by the Remuneration Committee in
respect of the operation of the annual bonus plan. Despite beating revised guidance whichProxy voting report
Quarter 2 2021
was issued in July, the original targets set in February were not met. As a result, a bonus
marginally below target was paid. Whilst we acknowledge that the company has
performed well in challenging circumstances, we are strongly opposed to inflight changes.
Approve the Remuneration Policy of the Chairman & CEO
We continue to be concerned at the operation of the LTIP, and in particular the way in
which individual performance measures are treated. Under the TSR measures,
outperformance can be offset against underperformance of other measures. This is not an
approach we favour as all performance targets should be measured independently of each
other.
Telenet Group Holding NV Approve the Remuneration Report and policy
Our concern centred primarily on the structure of the annual bonus plan. Whilst the actual
targets were not disclosed, the company stated that bonuses begin to accrue for achieving
10% of target. This is significantly below other companies resulting in a very real risk of
reward for failure. The majority of LTI awards were not subject to performance thereby
exacerbating our concerns.
Approve Change of Control Clause Re: Performance Shares, Share Options, and
Restricted Share Plans
Approval was sought for the change of control clause to be included within the various
grants made under share plans in 2020. The Company was requesting that in the event of
a takeover, all outstanding awards automatically vest. Given the absence of any
performance targets governing the majority of awards, participants will immediately
benefit from any takeover premium. This risks reward for failure.
Glencore Plc Approval of the Incentive Plan
The Company was proposing to move away from a conventional LTIP to a Restricted Share
Plan under which annual grants of shares with no requirement for the achievement of pre-
determined performance targets would be made. We are generally against these plans,
but may occasionally approve them should the discount (to reflect the increased expected
value) be sufficient and if the company has made a compelling reason. In this case neither
had been made. Indeed, the annual grant was being increased from 200% to 250% of
salary.
Approval of the Remuneration Policy
We voted against the policy since it formalised the incentive plan which we fundamentally
opposed.
Hexagon AB Reelect Sofia Schorling Hogberg as Director
The three person Audit Committee is chaired by the Company Chairman, Gun Nilsson, who
is a shareholder representative of Melker Schorling which controls circa 23% of the shares
and 44% of the voting power. Sofia Schorling Hogberg is also a shareholder representative
of Meiker Schorling. Despite previously expressing our concern, the composition of the
Audit Committee remains unchanged. Having a majority of the committee being
shareholder representatives is a serious concern. We therefore voted against the two non-
independent members, and Gun Nillson in his role as Company Chairman.
Reelect Gun Nilsson as Director
The three person Audit Committee is chaired by the Company Chairman, Gun Nilsson, who
is a shareholder representative of Melker Schorling which controls circa 23% of the shares
and 44% of the voting power. Sofia Schorling Hogberg is also a shareholder representativeProxy voting report
Quarter 2 2021
of Meiker Schorling. Despite previously expressing our concern, the composition of the
Audit Committee remains unchanged. Having a majority of the committee being
shareholder representatives is a serious concern. We therefore voted against the two non-
independent members, and Gun Nillson in his role as Company Chairman.
Reelect Gun Nilsson as Board Chairman
The three person Audit Committee is chaired by the Company Chairman, Gun Nilsson, who
is a shareholder representative of Melker Schorling which controls circa 23% of the shares
and 44% of the voting power. Sofia Schorling Hogberg is also a shareholder representative
of Meiker Schorling. Despite previously expressing our concern, the composition of the
Audit Committee remains unchanged. Having a majority of the committee being
shareholder representatives is a serious concern. We therefore voted against the two non-
independent members, and Gun Nillson in his role as Company Chairman.
Approve the Performance Share Plan for Key Employees
Approval was sought for a PSP designed for the benefit of key employees, including
executive directors. However, the company had failed to disclose any detail of required
performance (or indeed if any was required), or target and maximum award levels.
Without such key information, we were unable to support.
Synthomer Plc Re-elect Alex Catto as Director
We have consistently voted against the election of Alex Catto for a number of years. He
has been on the Board for 40 years, is clearly not independent (as acknowledged by the
Company), and we struggle to see the benefit he brings. Whilst the shareholding he
represents has been maintained at 2.04% over the past year, it is not of a sufficient size to
justify an ongoing board position.
The Weir Group Plc Approve the Remuneration Report
The Remuneration Committee had exercised discretion on the vesting of the 2018
restricted share award and reduced the award by 5%. Given that the dividend underpin
had not been met (one of four underpins), we did not consider this reduction to be
sufficient. Our concern was exacerbated since the company made a full grant in 2020
despite a significant fall in share price.
Approve the Remuneration Policy
The policy new the restricted share scheme which we are fundamentally opposed to.
Re-Elect Clare Chapman as Director
As chair of the remuneration committee, she has been aware of our concerns for a
number of years, yet failed to address them. Having abstained on her re-election last year,
we escalated our voting this time.
Zur Rose Group AG Transact Other Business (Voting)
Since no information had been provided, we were unable to make a considered vote.
Votes abstained
Company DetailsProxy voting report
Quarter 2 2021
Koninklijke Ahold Delhaize Approve the Remuneration Report
NV Our primary concern was the vesting schedule under the LTIP. 60% of the award vests for
average/target levels of performance. This does not encourage outstanding performance.
Our concern was exacerbated since disclosure of performance targets, both under the
LTIP and the annual bonus pland, was poor. Since it was our first time voting, we
abstained.
Eiffage SA Reelect Dominique Marcel as Director
The Audit Committee comprised of four members, of whom two were standing for re-
election this year. Of the two, Dominique Marcel had been on the Board for 12 years and
therefore we did not consider him to be independent. Indeed, the company
acknowledged that his independence has been compromised on the grounds of tenure.
Given our preference for a fully independent committee, we abstained on his re-election
(it was our first time voting).
Sthree Plc Re-elect Anne Fahy as Director
Our concern centred on her previous role as Chair of the Audit Committee at Interserve
Plc, which fell into administration in early 2019. Anne was appointed to the Board of
Interserve in 2013 and chaired the Audit Committee for a number of years. Given her role
as Audit Committee Chair at SThree and whilst the investigation into the financial
statements (by the FRC) covering years 2015-2017 remained ongoing, we abstained on her
re-election.
MRV Engenharia e In case there is any change to the Board slate composition, may your votes still be
Participacoes SA counted for the proposed slate
No changes have been proposed at the time of voting. We were therefore unable to
support a request to approve unknown changes which could negatively affect the board
composition.
Resolution 6 – which asks if cumulative voting is used would we like our votes to be cast
equally and resolution 7.1-7.7 which is the allocation of our votes between the director
nominations
We have a strong belief in the principle of one share, one vote. We therefore would not
want to participate in cumulative voting.
American Campus Advisory Vote to Ratify Named Executive Officers' Compensation
Communities, Inc Since we last voted, there had been an improvement in the structure of compensation.
However, whilst 50% of the Long-Term award vested dependent upon performance, it was
measured over a one year period. The award is simply an extension of the annual bonus
plan and does not promote sustained long-term performance.
Lancashire Holdings Ltd Approve the Remuneration Report
Our primary concern centred on the structure of LTIP, the majority of which vested upon
performance measured over three separate one year periods. This did not align with our
long term interests. Furthermore, the targets simply replicated the exact targets under the
annual bonus plan. Participants were therefore being rewarded for the same performance
twice. Since it was our first time voting we abstained.Proxy voting report
Quarter 2 2021
London Stock Exchange Approve the Remuneration Report
Group Plc Whilst the EPS targets attached to this measure under the PSP have been strengthened
reflecting the acquisition of Refinitiv, they remain significantly below market expectations.
There is therefore risk of pay versus performance disconnect, and of of significant reward
for failing to meet market expectations. The CEO has also received a 25% salary increase
following the acquisition. We would expect an increase of this magnitude to be phased
over a number of years and subject to the successful integration of the acquisition.
ASML Holding NV Approve the Remuneration Report
We were concerned about both the vesting schedule of historic awards which rewarded
underperformance, and the absence of sufficient information regarding performance
targets governing the vesting of variable forms of remuneration. Without such
information, we are unable to satisfy ourselves that there is an appropriate link between
pay and performance.
Approve Amendments to the Remuneration Policy for Management Board Members
The Company was seeking to increase the individual limit capping annual awards under
LTIP. Whilst the increase was not significant, we were concerned with the vesting schedule
which rewarded under performance. The proposed increase served only to exacerbate our
concern.
Votes against & abstentions
Company Details
Zurich Insurance Group AG Approve the Remuneration Report – Abstain
Our primary concern centred on the vesting schedule attached to the Long-Term Incentive
Plan. Vesting of awards was split equally between 3-year average ROE, cumulative cash
remittance and relative TSR. Our particular concern related to the proportion of award
that vests for achieving median levels of TSR relative performance (100% of target award),
and performance at the third quartile (below median - 50% of target award). Whilst this
was not an issue since the company had been performing well, it could lead to significant
reward in periods of underperformance.
Transact Other Business – Against
This is a resolution enabling voting on issues raised at the AGM. However, since there was
no information provided at the time of voting, we were unable to support it.
Santos Limited Approve the Amendments to the Company's Constitution to Insert New Clause 32A –
Against
This was a requisitioned resolution under which the proponent was seeking to amend the
Articles by inserting a new clause 32A which would allow shareholders to place resolutions
for consideration on the agenda of a shareholder meeting if they relate to a material risk.
Whilst the resolution had some merit, as structured the definition of “material risk” was
too broad and may significantly increase the administrative burden of the Board. No
guidance had been provided by the proponent detailing the threshold that was needed to
trigger an issue of material relevance. The company has numerous engagement and
consultation routes available to shareholders to express opinions. We voted against the
proposal which was in line with management recommendations.Proxy voting report
Quarter 2 2021
Approve Capital Protection – Abstain
This was a requisitioned resolution under which the proponent was requesting that the
company disclose information showing how it will facilitate the efficient managing down
of oil and gas operations and assets. The Company had put forward reasons as to the
current and future demand for its existing products and is well placed to pursue global
demand for low-carbon gases. The Company was focused on its future as a clean fuels
company producing zero-emissions LNG, hydrogen and other clean capture and storage. It
had also been taking appropriate steps to keep the market and shareholders informed of
its operations, projects and how the business is dealing with the impacts of climate change
on product demand. Whilst we did not agree with the proponents request that the
company provide annual reporting, we felt that the issue is important and the company
should give it further thought. We therefore abstained.
Sika AG Reelect Christoph Tobler as Director – Against
The three person committee includes Christoph Tobler who had been on the Board for 16
years and we therefore did not consider him to be independent. The appropriateness of
his continued membership was further questioned since he was not considered to be a
financial expert. Given that there is sufficient experience and financial expertise elsewhere
on the committee, we voted against his re-election.
Appoint Justin Howell as Member of the Nomination and Compensation Committee –
Abstain
We also abstained on the re-election of Justin Howell. He Chairs the Remuneration
Committee and has been aware of our concerns for some time yet failed to address them.
Approve the Remuneration Report – Against
The structure of the LTIP continued to cause concern. Vesting of awards was split equally
between ROCE and relative TSR, both of which were measured over a three year period.
Under the TSR measure, 50% of the award vests for performance at the third quartile,
100% at the median, and 150% for achieving a top ranking. Having such a structure
(rewarding underperformance) does not incentivize outstanding performance, and can
result in a pay versus performance disconnect in future.
Transact Other Business – Against
Since no information had been provided, we were unable to make a considered voting
decision. We therefore voted against.
Teleperformance SE Approve Compensation of Daniel Julien, Chairman & CEO – Against
Our primary concern centred on the decision to amend the performance targets attached
to both the annual bonus and the 2020 annual LTIP grant in the light of the covid
outbreak. As a result of reducing the targets, the annual bonus was paid in full in respect
of 2020. This did not reflect the experience of all stakeholders, particularly a proportion of
employees that were made redundant.
Approve Compensation of Olivier Rigaudy, Vice CEO – Against
Our primary concern centred on the decision to amend the performance targets attached
to both the annual bonus and the 2020 annual LTIP grant in the light of the covid
outbreak. As a result of reducing the targets, the annual bonus was paid in full in respect
of 2020. This did not reflect the experience of all stakeholders, particularly a proportion of
employees that were made redundant.
Approve the Remuneration Policy of the Chairman & CEO – AgainstProxy voting report
Quarter 2 2021
Approval was sought for the approval of the remuneration policy for the two executive
directors for the next year. Whilst there were no changes proposed to the existing policy,
it was clear that the quantum available had not been matched by a sufficient stretch of
required performance.
Approve the Remuneration Policy of the Vice CEO – Against
Approval was sought for the approval of the remuneration policy for the two executive
directors for the next year. Whilst there were no changes proposed to the existing policy,
it was clear that the quantum available hads not been matched by a sufficient stretch of
required performance.
Re-elect Alain Boulet as Director - Abstain
Our concern centred on his membership of the Audit Committee. The Committee
comprises of three Non-Executives, all of whom are deemed to be financially literate.
However, Alain Boulet (Committee Chairman) had served the Board for 9 years, and
therefore we considered that his independence had now been compromised. Whilst we
have no objections to his continued board membership, we did not consider it appropriate
for him to sit on the Audit Committee.
Re-elect Stephen Winningham as Director – Abstain
Our concern centred on his membership of the Audit Committee. The Committee
comprises of three Non-Executives, all of whom were deemed to be financially literate.
However, Stephen Winningham had served the Board for 10 years, and therefore we
considered that his independence had now been compromised. Whilst we had no
objections to his continued board membership, we did not consider it appropriate for him
to sit on the Audit Committee.
Hikma Pharmaceuticals Plc Re-elect Dr Pamela Kirby as Director - Abstain
As Chair of the Remuneration Committee, she had been aware of our concerns regarding
the structure of remuneration for a number of years, yet had failed to address them.
Approval of the Remuneration Report – Against
Our concerns centres on the operation of the Executive Incentive Plan, which provides
significant reward for performance measured over a one year period. Furthermore,
threshold performance, which triggers 25% vesting, is consistently set below the previous
year's outcome. There is potential for significant reward for relatively poor performance.
Umicore Approve the Remuneration Report – Against
Our concern centres on the provision for the CEO to receive an annual option over
140,000 shares. Whilst the value of the grant fluctuates according to the prevailing market
price, there is no requirement for subsequent performance targets to be met. Our
opposition to this method of incentivization centres on the influence that external factors
beyond the control of management can have on a company’s share price, thereby risking
underserved reward.
Reelect Thomas Leysen as a Member of the Supervisory Board – Abstain
We abstained on the Chairman of the Remuneration Committee. He had been aware of
our concerns regarding remuneration for a number of years and had failed to address
them.Proxy voting report
Quarter 2 2021
May
Votes against
Company Details
Planet Fitness, Inc Advisory Vote to Ratify Named Executive Officers' Compensation
Our primary concern centred on the structure of Long-Term Incentives. Only 30% of the
award was subject to pre-determined performance targets. To ensure that there is a
reasonable link between pay and performance, we expect at least 50% of the award to be
subject to fully disclosed performance targets measured over a period of three years. With
regard to disclosure, vesting (of the performance related element) was dependent upon
three year adjusted EBITDA and upon three year store sales. The actual targets, though,
had not been disclosed so we were unable to assess their challenge. Given that the
structure remains unchanged and there was a very real risk of significant remuneration in
periods of underperformance, we voted against.
Atlantica Sustainable Authorise the Issue of Equity without Pre-emptive Rights (Additional Authority)
Infrastructure Plc Approval was sought to allot up to 20% of the issued share capital on a non pre-emptive
basis. The authorities were being sought under two separate resolutions – each seeking
10%. The Company was incorporated in the UK but listed on NASDAQ. When considering it
as an overseas company, the amount being sought significantly exceeded the amount we
consider to be acceptable. No specific purpose had been stated for the amount being
sought, other than to generally provide additional flexibility to pursue strategic
transactions and to finance growth with equity. Since the aggregate amount was
considered to dilutive to our interests, we voted against the additional authority (for 10%).
Allianz SE Approve Discharge of the Supervisory Board for Fiscal Year 2020
The five person committee included the Chairman, Michael Diekmann, who was formerly
the Chief Executive, and two employee representatives. In addition to being a member of
the audit committee, it should also be noted that Michael Diekmann chaired all the other
three key sub-committees (remuneration, nomination and governance). Since none of the
directors were standing for re-election this year, as last year, we voted against the
discharge for the supervisory board.
Barclays Plc Approve Market Forces Requisitioned Resolution
Filed by a group of retail shareholders coordinated by Market Forces, an Australian non-
governmental campaign group, requesting the Company to set short, medium and long-
term targets and to phase out the provision of financial services to fossil fuel projects and
companies, following a timeline aligned with the Paris Agreement. The shareholder
resolution has been co-filed by a coalition of retail investors. The strategy seemed very
clear, was measurable and will be reported on annually. Furthermore, they were using a
transparent methodology to enable shareholders as well as other stakeholders to monitor
the progress. Consequently, it was not appropriate to support a shareholder resolution to
change a strategy that has only just been introduced, furthermore, the company has
already committed to clear disclosure surrounding their strategy.
First Industrial Realty Trust, Elect Director John Rau
Inc We last reviewed the governance of the Company in 2018, and raised concerns regarding
the composition of the Audit Committee and, in particular, the membership of John Rau.
He had served 23 years and was not deemed to be financially qualified. Given ourProxy voting report
Quarter 2 2021
preference for the committee to be entirely independent, we abstained on his re-election.
Upon review this year, John Rau continued to be a member having now served 26 years.
We voted against his re-election since there was sufficient experience and skill sets
elsewhere on the committee.
BAE Systems Plc Approve the Remuneration Report
Whilst making progress last year, the Company reverted in 2020 to setting a range for the
EPS measure under the annual bonus plan which was less than the outcome of the
previous year. Bonus pay-outs, as a result, continue to be extremely high which is in stark
contrast to long-term shareholder returns. Of further concern was the vesting of the CEO's
LTIP award. For retention purposes, the award, which was due to vest at approximately
35% was allowed to vest in full, subject to continued employment until 2023. We do not
believe in retention payments since rarely achieve their purpose and can simply be bought
out by the new employer.
Lonza Group AG Transact Other Business
Since no information had been provided at this time, we were unable to make a
considered vote.
Rio Tinto Limited Approve the Remuneration Report for UK Law Purposes
Our major concern centred on the decision to treat the departing executives (who left in
response to the Juukan Gorge Rock Shelters destruction, as good leavers. The Company
argued that, whilst fully recognising the gravity of destruction, it was mindful that the
individuals did not deliberately cause the events, did not do anything unlawful, or engage
in fraudulent or dishonest behaviour. Whilst there may have been legal ramifications
should they have been treated as bad leavers, the destruction of the rock shelters has
done serious reputational damage to the company. It is questionable whether it was
appropriate for good leaver status to be granted. Accordingly, we voted against.
Approve the Remuneration Report for Australian Law Purposes
Our major concern centred on the decision to treat the departing executives (who left in
response to the Juukan Gorge Rock Shelters destruction, as good leavers. The Company
argued that, whilst fully recognising the gravity of destruction, it was mindful that the
individuals did not deliberately cause the events, did not do anything unlawful, or engage
in fraudulent or dishonest behaviour. Whilst there may have been legal ramifications
should they have been treated as bad leavers, the destruction of the rock shelters has
done serious reputational damage to the company. It is questionable whether it was
appropriate for good leaver status to be granted. Accordingly, we voted against.
ANTA Sports Products Authorise Reissuance of Repurchased Shares
Limited The Company was seeking to reissue repurchased shares for an amount up to 10% of the
issued share capital. This amount was in addition to the general authority to allot shares
on a non pre-emptive basis. The aggregated amount was excessive and could potentially
be too dilutive to our interests.
Teradyne, Inc Elect Director Edwin Gillis
Despite previously expressing our concerns to the company, Edwin Gillis and Paul Tufano
continue to be members of the Audit Committee. Having served 15 years and 16 years
respectively, we do not consider them to be independent on grounds of tenure. Given ourProxy voting report
Quarter 2 2021
strong preference for the committee to be entirely independent, we voted against their
re-elections.
Elect Director Paul Tufano
Despite previously expressing our concerns to the company, Edwin Gillis and Paul Tufano
continue to be members of the Audit Committee. Having served 15 years and 16 years
respectively, we do not consider them to be independent on grounds of tenure. Given our
strong preference for the committee to be entirely independent, we voted against their
re-elections.
Astrazeneca Plc Approve the Remuneration Policy
We voted against the policy since it facilitated the increased PSP awards. The annual
bonus potential was also being increased, but within the already approved maximum.
Amend the Performance Share Plan
The Company was seeking approval to increase the annual grant size from 550% to 650%
of salary. We did not consider this to be appropriate since the cap had only recently been
increased, and as currently positioned was well aligned with GSK.
Ascential Plc Approve the Remuneration Policy
The Company was proposing to replace its conventional LTIP with a one-off grant of ten
times salary for the CEO, and 8.75 times for the FD. 60% of the grant was not subject to
performance, with initial vesting starting immediately. The plan breached established best
practice on a number of fronts.
Approve the Ten-Year Equity Plan
We voted against the policy since it facilitates the operation of the Ten-Year Equity Plan.
Rentokil Initial Plc Approve the Remuneration Policy
We voted against the policy since it facilitated the increased grant levels under the PSP.
Amend the Performance Share Plan
Approval was sought to increase the anual grant size from 250% to 375% of salary. Whilst
the company has been a good performer and the management team is well respected, we
did not consider it an appropriate time to be significantly increasing variable pay. The
proposed increase follows several years of remuneration creep.
St. James’s Place Plc Approve the Remuneration Report
We continue to be concerned at the EPS targets attached to the LTIP which are not
reflective of external broker forecasts. There is a significant risk of reward for perceive
poor performance in future.Proxy voting report
Quarter 2 2021
Royal Dutch Shell Plc Approve the Shell Energy Transition Plan - Against
Shell had voluntarily committed to put forward an advisory vote on their climate transition
strategy. The Company will offer shareholders an advisory vote on their energy transition
strategy on a triennial basis, as well as an annual advisory vote thereafter on progress in
executing the strategy. Whilst welcoming the decision by Shell to submit its transition
plan, we voted against since absolute targets had not been provided, and there was a
reliance on nature-based solutions and CCS.
Request Shell to Set and Publish Targets for Greenhouse Gas (GHG) Emissions – For
This was a requisitioned resolution (by Follow This) requesting Shell to set and publish
GHG emission targets that are consistent with the goal of the Paris Climate Agreement (to
limit global warming to well below 2°C above pre-industrial levels and to pursue efforts to
limit the temperature increase to 1.5°C). The quantitative targets should cover the short,
medium, and long term greenhouse gas emissions of the Company’s operations and the
use of its energy products (Scope 1, 2 and 3). The Company should report on the strategy
and underlying policies for reaching these targets and on the progress made, at least on
an annual basis. We voted in favour (against management recommendations) and
requested that the company detail where it is not Paris-Aligned in its climate strategy.
BOKU, Inc Approval of the Remuneration Report
Our concern centred on the PSP awards granted to Executive Directors during 2020. These
were granted in two tranches, with a total value equal to approximately 130% of salary
and 120% of salary for the CEO and FD respectively. However, only 50% of the award was
subject to the achievement of pre-determined performance targets (adjusted EBITDA). It
was proposed that the 2021 grant be made on similar terms. The absence of performance
targets determining vesting is a fundamental breach of established best practice, and does
not align with a well-structured remuneration package designed to deliver shareholder
value.
Burlington Stores, Inc Report on Pay Disparity
This was a requisitioned resolution requesting that consideration of salary ranges of all
employee classification be considered when setting target CEO compensation. However, it
was unclear how a report would provide any meaningful information beyond what is
currently provided within its compensation report. We voted against with management
recommendations.
Nexity SA Approve Compensation of Julien Carmona, Vice-CEO
In response to Covid, the Company had amended the 2020 annual bonus targets. As a
result, the bonus paid out at 71% of max, despite failing to meet the previous year's
performance. We strongly oppose changes to inflight awards.
Gentherm, Inc Advisory Vote to Ratify Named Executive Officers' Compensation
We opposed the amendments made mid-year to the annual bonus in response to Covid.Proxy voting report
Quarter 2 2021
Kilroy Realty Corporation Elect Director Edward Brennan
Edward Brennan had been on the Board for 17 years. We consider this length of tenure
compromises his independence, and accordingly he should not be a member of a
committee which should be entirely independent. There are several other fully
independent Non-Executives who could be appointed to the committee in his place. As
last year, we voted against his re-election.
Elect Director Scott Ingraham
Scott Ingraham had been on the Board for 13 years. We consider this length of tenure
compromises his independence, and accordingly he should not be a member of a
committee which should be entirely independent. There are several other fully
independent Non-Executives who could be appointed to the committee in his place. As
last year, we voted against his re-election.
Advisory Vote to Ratify Named Executive Officers' Compensation
Whilst making improvements to certain aspect of NEO service agreements, the Company
had failed to address the severance payment (US$36 million) which could be paid to the
CEO. This is deemed to be too excessive and is equal to over 900% of salary and target
bonus.
Republic Services, Inc Report on Integrating ESG Metrics into Executive Compensation Program
This was a requisitioned resolution requesting that the Board consider incorporating ESG
metrics into its compensation programs. We voted against the proposal (in line with
management recommendations) since the company currently manages its ESG risks well,
has good disclosures and had set measurable targets.
Times China Holdings Approve the Issuance of Equity or Equity-Linked Securities without Premptive Rights
Limited The Company was seeking an authority to purchase back up to 20% of its issued share
capital on a non pre-emptive basis. A further 10% was sought in relation to the issue of
repurchased shares. This significantly exceeded the amount that we normally tolerate for
overseas companies as it is too dilutive to our interests. Our concern was exacerbated
since a maximum discount (to the prevailing market price) at which shares would be
issued has not been disclosed.
Authorise the Reissuance of Repurchased Shares
The Company was seeking an authority to purchase back up to 20% of its issued share
capital on a non pre-emptive basis. A further 10% was sought in relation to the issue of
repurchased shares. This significantly exceeded the amount that we normally tolerate for
overseas companies as it is too dilutive to our interests. Our concern was exacerbated
since a maximum discount (to the prevailing market price) at which shares would be
issued has not been disclosed.
Shandong Weigao Group Approve the Issuance of Equity or Equity-Linked Securities without Preemptive Rights
Medical Polymer Company for H Shares
Limited As in previous years, the Company was seeking an issuance request to allot up to 20% of
the issued share capital on a non pre-emptive basis. This exceeded the 10% limit that we
tolerate for overseas companies. Our concern was exacerbated since the Company did not
provide a maximum discount to the market price at which shares may be issued. Given the
potential dilution, and consistent with previous years, we voted against.Proxy voting report
Quarter 2 2021
A-Living Smart City Services Approve the Issuance of Equity or Equity-Linked Securities without Preemptive Rights
Co Ltd for Domestic Shares/Unlisted Foreign Shares/H Shares
As in previous years, the Company was seeking an authority to allot up to 20% of its H
Shares on a non pre-emptive basis. This exceeded the 10% limit that we consider to be
acceptable for overseas companies and is potentially too dilutive to our interests. Our
concern was exacerbated since there was no stated maximum discount to the prevailing
market price that the shares may be issued at.
Perficient, Inc Elect Director Ralph Derrickson
The three-person committee included Ralph Derrickson who had served the Board for 16
years. We did not consider him to be independent based on tenure, and should not,
therefore, be a member of a committee which should be entirely independent.
Elect Director David Lundeen
The three person committee included David Lundeen who had served the Board for 23
years. We did not consider him to be independent based on tenure, and should not,
therefore, be a member of a committee which should be entirely independent.
Advisory Vote to Ratify Named Executive Officers' Compensation
Grants of long-term incentive awards continue to vest entirely based upon tenure alone
with vesting in equal tranches starting on the first anniversary. As a minimum, we expect
at least 50% of grants to be subject to challenging performance targets which are
measured over three years. As currently structured, significant reward could be realised
for factors outside of management control and could result in a pay versus performance
disconnect.
Illumina, Inc Advisory Vote to Ratify Named Executive Officers' Compensation
The Company had amended both the operation of the annual bonus plan and the EPS
targets attached to all outstanding LTI awards. Given the deteriorating financials, a pay
versus performance disconnect existed.Proxy voting report
Quarter 2 2021
Hong Kong Ferry Holdings Elect Ho Hau Chong as Director
Co Ltd Two Non-Executives were standing for re-election this year, and we did not consider
either to be independent. Since the both sat on the Audit Committee which should be
entirely independent, we voted against their re-election. The Board is in need of
refreshment since all Directors have long tenures.
Elect Wu King Cheong as Director
Two Non-Executives were standing for re-election this year, and we did not consider
either to be independent. Since the both sat on the Audit Committee which should be
entirely independent, we voted against their re-election. The Board is in need of
refreshment since all Directors have long tenures.
Approve the Issuance of Equity or Equity-Linked Securities without Preemptive Rights
Approval was sought to allot up to 20% of the issued share capital on a non pre-emptive
basis. This exceeded the 10% limit that we tolerate for overseas companies. The Company
had also failed to provide a maximum discount to the market price at which shares may be
issued.
Authorise the Reissuance of Repurchased Shares
In addition to the general 20% authority, the Company is also seeking a further authority
to reissue shares (up to 10%) which had originally been purchased in the market. Our
concern centred on the net effect of purchasing and reissuing shares and the resultant
dilutive NAV effect.
STORE CAPITAL Corporation Advisory Vote to Ratify Named Executive Officers' Compensation
The Company had made inflight changes to both the annual bonus plan and all
outstanding LTI awards. As a result, the 2020 bonus was paid in full, and the 2018 LTI
award vested near maximum levels. Had these changes not been made, no variable
compensation would have been paid. Given deteriorating financials, there had been a
clear disconnect between pay and performance.
HSBC Holdings Plc Find an Equitable Solution to the Unfair, Discriminatory but Legal Practice of Enforcing
Clawback on Members of the Post 1974 Midland Section Defined Benefit Scheme
This was raised for the third year in a row from former employees of the Midland bank
who perceived that they had been treated unfairly by the practice of taking state
deduction from pensions paid to the members of the post 1974 Midland Bank DB scheme.
Whilst we had sympathy with the perceived unfairness - to remedy this now would also be
unfair to retrospective pensioners and to the staff who are now on much less lucrative DC
schemes. In addition, this was fairly normal practice at the time and was clearly disclosed.
We have therefore voted against, once again.
Tongcheng-Elong Holdings Elect Jiang Hao as Director
Limited The Board comprised of an Executive Chairman, Chief Executive, and seven Non-
Executives. Of the Non-Executives, three weare shareholder representatives, and one,
Jiang Hao, was until 2019 an Executive Director. There were only three independent
Directors on a Board of nine. Whilst Hao Jlang did not sit on any of the key board sub-
committees, his membership of the Board exacerbated its imbalance.
Approve the Issuance of Equity or Equity-Linked Securities without Preemptive Rights
Approval was being sought to allot up to 20% of the issued share capital on a non pre-
emptive basis. This exceeded the 10% limit that we tolerate for overseas companies. TheYou can also read
