It is only the beginning of 2023 AGM season and already 18 activist initiatives have been made public in Europe in the last weeks. Not to mention the underground conflicts.
Of course, Say-on-pay remains the crystallisation point of discontent. At Unicredit in Italy last week, the remuneration policy was only narrowly approved by 69%. Investors and proxies were not convinced by the proposed performance criteria.
But contestation this year is much more than Say-on-pay. Dissenting resolutions are on the increase.
They find new grounds. 2023 contesting shareholders are still on Climate strategy , but now also on working conditions, and ethics. Most importantly, these « activists » are very classic and respectable investors, far from aggressive hedge funds.
In France, fifteen Engie shareholders, including La Banque Postale Asset Management, La Financière de l’Echiquier and Candriam, have filed a dissident Say-on-Climate resolution for the next AGM, asking more disclosure and an annual vote at its general meeting. In the UK, BP faces also a dissident Say-on Climate resolution, proposed by a group of shareholders to align their targets with the goal of the Paris Climate Agreement and investing accordingly. Similarly in Switzerland, at Credit Suisse, where a dissenting climate resolution is announced for this week.
In Denmark, Maersk shipping company faced last week four dissident proposals, relating to human rights and labour conditions. All were rejected, but with strong negative impact group image and reputation.
The pressure on board members and executives is increasing. Investors are now using a new weapon : they are refusing to vote for discharge, thus placing the directors directly in front of the judge.
It went into action last week in Sweden. Ericsson shareholders representing 10% of Ericsson shares voted against discharging most of the board and president from liability for the 2022 financial year. Under Swedish law, this means that board members can be sued by the company and its investors. They aired their discontent at the company’s handling of a probe into allegations of corruption – in Iraq, which was recently fined around $207 million by the U.S. Justice Department, and in in China, Djibouti, Indonesia, Kuwait, Saudi Arabia and Vietnam, fined by $1 billion payment that Ericsson made to settle a U.S. corruption investigation.
Negotiation is becoming the rule. Apple in March set an example by agreeing to conduct a social audit requested by investors, in exchange for a positive vote on the retention of Tim Cook and Al Gore on the Board, and on Tim Cook’s compensation.
This week at Cellnex Telecom in Spain, the Board took less than a week to meet the TCI fund’s demand for the removal and departure of former Cellnex president Bertrand Kan. Anne Bouverot has replaced him. The next step will be to find out whether TCI gets a seat on the Board, as it requested in the press.
The most anticipated meetings this week are Volvo in Sweden, Rio Tinto in the UK and Deutsche Telekom in Germany. All with dissenting resolutions.
Good week to all,
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