Council of Institutional Investors

Section: CII Governance Alert
Dual-Class Structures Recede at Large, Tech IPOs in 2018
From Dropbox to DocuSign, nearly two dozen U.S. technology unicorns leapt into public markets in 2018.
Tech Workers Use Stock Holdings to File Proposals
Employees at tech firms are using the shares their employers granted to them to file shareholder proposals, reports The New York Times.
NYC Funds Ask CBS, Alphabet to Ditch 'Inequitable Employment Practices'
New York City Comptroller Scott Stringer and the New York City Pension Funds have filed shareholder proposals asking CBS and Alphabet to eliminate "inequitable employment practices."
Coalition of Investors asks Fortune 500 Companies for More Context on Pay Ratios
A group of almost 50 pension funds, religious groups and asset managers, most of which are CII members, sent letters to the boards of Fortune 500 companies asking them to offer more context to their pay ratio disclosure for additional insight into their "overall approach to human capital management."
CII Letter to SEC Offers Ideas to Improve Proxy Voter Turnout, Defends XBRL
CII submitted a letter December 20 to the SEC on potential reforms to improve turnout among retail investors. (While institutional turnout exceeds 90%, retail turnout has fallen below 30%.)
The Great Debate: Permit Mandatory Arbitration?
Its Duke v. Michigan, as Duke University Professor of Law James D. Cox debates University of Michigan's Adam C. Pritchard on: Should public companies be permitted to include mandatory arbitration clauses in their governing documents?
Shareholder Proposal Seeks Mandatory Arbitration at J&J
Harvard Law Professor Hal Scott in November submitted a shareholder proposal to Johnson & Johnson (J&J) requesting that the J&J board take steps to adopt a mandatory arbitration bylaw for disputes relating to shareholder claims under federal securities laws. The proposal seeks to prohibit class action suits on any matter subject to arbitration.
Delaware Chancery Court Invalidates Certain Forum Selection Clauses
In a December 19 memorandum opinion, Delaware Chancery Court Vice Chancellor Travis Laster said that forum selection provisions in Delaware corporate charters that limit IPO securities fraud claims under the Securities Act of 1933 to federal courts, are invalid.
Facebook Scandals Show Why Exchanges Should Require Sunsets for Dual-Class Listings
Controversies at Facebook over sharing users' personal data and "fake news" have focused investor attention on the pitfalls of dual-class stock structures with unequal voting rights and the need for time-based sunset provisions that set an expiration date on super-voting shares.
SEC Wraps Up 2018 With Blizzard of Initiatives
The SEC wrapped up a host of actions before the holiday break, while the commission is still fully staffed. Democratic SEC Commissioner Kara Stein is set to leave at the beginning of next year and a successor has not been named.
SPACs Surge in 2018
Public offerings of special purpose acquisition companies (SPACs) on U.S. exchanges reached a post-recession record in 2018 with 43 IPOs raising a total of $10.1 billion, according to SPAC Analytics and CII tracking.
U.K. Asset Manager Group Targets Domestic "Repeat Offenders"
Earlier this month the Investment Association (IA), a group representing U.K. asset managers, wrote to 32 companies in the FTSE All-Share Index for insufficiently responding for two consecutive years to the same management proposal receiving opposition from 20% or more of votes cast.
SEC Sets Disclosure Requirements for Conflicting Proposals Exclusion
The SEC ruled recently that Franklin Resources may omit a shareholder proposal filed by James McRitchie asking the company to amend its bylaws to allow 15% of its outstanding shareholders to call a special meeting--as long as it provides some background information in its proxy statement.
Activists Target Firms with Big Family Ownership
Elliott Associates this week disclosed it has taken a significant ownership interest in Pernod Ricard, the French distilled beverage company (see articles here and here).
Royal Dutch Shell Links Executive Pay to Carbon Emissions Targets
In a groundbreaking move, Royal Dutch Shell will link its long-term executive pay to short-term carbon emissions targets, beginning in 2020.
New Bill Targets Companies Using Non-Inspected Foreign Auditors
Rep. Mike Conaway (R-Tex.) introduced legislation December 10 to require companies using accounting firms in foreign jurisdictions that obstruct audit inspections by the Public Company Accounting Oversight Board (PCAOB) to disclose that fact to the SEC. H.R. 7234, the Holding Foreign Companies Accountable Act also directs the SEC to prohibit trading of securities of companies that have used a non-inspected foreign auditor for three consecutive years.
Investor Coalition Convinces Endo International to Report on Opioid Business Risks
Endo International issued a report o n its board's oversight of opioid business risks, and agreed to expand its compensation recoupment policy and beef up its corporate lobbying disclosures.
Should Sustainability Reporting Be Standardized by FASB and IASB?
The UK's Oxford Union on December 11 debated whether "corporate sustainability reporting should be mandated, and standardized, by FASB and IASB, for it to be most useful for investors."
Investor Advisory Committee Debates SEC Oversight of ESG Disclosure
While all of the participants at a December 13 SEC Investor Advisory Committee meeting agreed that corporate disclosure of environmental, social and governance (ESG) topics has come to the forefront in the past few years, they did not agree on if, or how, the commission should oversee this disclosure.
SEC Set to Consider Quarterly Reports, Hedging Disclosure at December 19 Meeting
The SEC will hold an open meeting December 19 to consider, among other issues, "the nature and content of corporate quarterly reports and earnings releases" and rules to implement Section 955 of the Dodd-Frank Act requiring disclosure of employees' and directors' hedging activities.
SEC Chair Hints Rule Changes for Shareholder Proposals, Proxy Advisors are Coming
In a December 6 speech , SEC Chairman Jay Clayton said the commission staff is working on changes to the rules governing shareholder proposals, proxy advisory firms and cybersecurity.
High-Tech Executives Seek SEC Approval for Stock Exchange with Long-Term Voting
A group of Silicon Valley notables filed an application November 30 with the SEC for approval of new Long-term Stock Exchange (LTSE) that would require listed companies to let shareholders accrue more voting power the longer they own stock.
CPA Survey: Mutual Fund Support for Disclosure of Political Contributions Climbs
A new study indicates that more mutual funds are heeding Strine's advice to vote for resolutions on political disclosure. The proportion of the largest funds supporting corporate political disclosure resolutions jumped significantly in 2018, to 53% from 45% in 2017, according to analysis released by the Center for Political Accountability (CPA) and based on the Morningstar Fund Votes Database. This eight percentage point increase was the largest since CPA began tracking institutional investors' votes on these types of resolutions in 2008.
SEC Postpones Meeting on Quarterly Reporting, Schedules Another on Disclosure
A December 5 SEC open meeting to consider whether to issue a request for comment on "the nature and content of corporate quarterly reports and earnings releases" was postponed because federal agencies were closed to observe a national day of mourning for former President George H.W. Bush. A new date has not been set.
Senate Hearing Continues Debate over Reforms to Proxy Process
Following up on the November 15 SEC roundtable on the proxy process, the Senate Banking Committee held a hearing December 6 on similar topics. At the start, Committee Chair Mike Crapo (R-Idaho) said that as a result of the proliferation of environmental, social and political proposals, and the rise of diversified passive funds, "it is time to re-examine the standards for inclusion of ESG proposals as well as the need for fiduciaries to vote all proxies on all issues."
Investors Skeptical of Common Ownership Concerns at FTC Hearing
The Federal Trade Commission (FTC) held a hearing December 6 on "Competition and Consumer Protection" focused on common ownership among institutional investors of non-controlling stakes in rival companies within the same sector. Some academic scholars argue that common ownership decreases competition.
CII to Testify on Institutional Investors and Common Ownership at FTC Hearing
CII Executive Director Ken Bertsch will testify at a December 6 hearing hosted by the Federal Trade Commission (FTC) focusing on institutional investors and common ownership.
Senate Banking Committee to Examine Proxy Process during December 6 Hearing
Following up on the SEC's November 15 roundtable, the Senate Banking Committee will hold a hearing December 6 on "Proxy Process and Rules: Examining Current Practices and Potential Changes."
SEC Seeks Comments on Whether to Scale Back Rules, Reorder Regulatory Priorities
The SEC is asking for comments on whether 43 SEC regulations should be dialed back or removed for smaller companies and if its yearly list of regulatory priorities takes the right approach.
CalSTRS Takes Aim at Virtual-Only Annual Meetings and Long-Tenured Auditors
CalSTRS Investment Committee November 7 approved two new corporate governance initiatives that the pension fund plans to pursue in the 2019 proxy season.
Reports of Faulty Governance Practices Surface after Ghosn's Arrest
The stunning news that Carlos Ghosn, CEO and chair of Renault as well as chair of Nissan and Mitsubishi, had been arrested on charges of underreporting his compensation and misusing corporate assets for personal use has sparked numerous media probes of his fall from grace.
U.K. Money Managers Release Principles to Crack Down on Soaring Executive Pay
The U.K.'s Investment Association, an industry group representing money managers, just released its 2018 Principles of Remuneration, strengthening its expectations and best practices for how companies should pay their top executives.
Analysis from Conference Board, Rutgers Offers Insights into 2018 Proxy Season
In 2018 the overall number of shareholders proposals filed declined and the number of proposals addressing governance issues fell, but the percentage of proposals addressing social and environmental issues rose, as did support for them.
New CII Representative Appointed to IFRS Advisory Council
James Andrus, investment manager, sustainable investments, for CalPERS, has been appointed to represent CII on the IFRS Advisory Council.
SEC Roundtable Explores Key Aspects of Proxy System
The SEC's November 15 all-day roundtable on the proxy process was organized into three panels focused on proxy voting infrastructure, shareholder proposals and proxy advisory firms.
Bipartisan Senate Group Introduces Compromise Proxy Advisor Bill
A bipartisan group of senators introduced legislation November 14 that requires all major proxy advisory firms to register with the SEC, and directs the agency to periodically review the firms' policies on conflicts of interest and determine whether any made false statements knowingly to clients.
Investor Coalition Drafts Principles to Engage Firearms Companies
A coalition of leading U.S. asset owners and managers with collectively $5 trillion in assets is promoting a framework of principles for engaging civilian firearms manufacturers and sellers on practices to improve gun safety and reduce investment risk.
ACCF Issues Another Report Blasting Proxy Advisors
A week after it published a report slamming proxy advisors and a few days before the SEC's roundtable on the proxy process, the American Council for Capital Formation (ACCF) released another broadside against proxy advisory firms.
More S&P 500 Firms Issue Sustainability Reports, but Integrated Reporting Lags
A week after the Sustainability Accounting Standards Board (SASB) published industry-specific sustainability accounting standards covering financially material issues, a new report finds that most companies in the S&P 500 have not adopted fully integrated corporate reporting on sustainability.
Bill Would Expand FTC's Power to Police Data Privacy
Earlier this month Sen. Ron Wyden (D-Ore.) released a discussion draft of the Consumer Data Privacy Act, which would require companies to report on their data-securing practices and would impose stiff penalties on executives at companies with cybersecurity breaches.
Germany Set to Overhaul Corporate Governance Code
Germany's corporate governance commission November 6 proposed amendments to that nation's corporate governance code that would revamp executive pay and more closely scrutinize the independence of shareholder representatives on supervisory boards.
CII Urges SEC to Require Confirmation of Proxy Votes, Universal Proxies
In a comment letter submitted ahead of the SEC's November 15 roundtable on the proxy system, CII urged the commission to make key fixes both in the short-term and fundamental changes in the long-term to improve the accuracy and reliability of proxy voting.
CII-REF Publishes Analysis of Shareholder Proposal Resubmission Thresholds
To provide a basis for informed discussion on the shareholder proposal process, the CII Research and Education Fund (CII-REF) today published a report, Clearing the Bar: Shareholder Proposals and Resubmission Thresholds, analyzing more than 3,600 shareholder proposals voted at Russell 3000 companies between 2011 and 2018.
McKesson Board Bows to Teamsters' Request and Appoints Independent Board Chair
McKesson's board announced November 1 that the company's CEO and Chair John Hammergren is retiring March 31 and Brian Tyler, president and COO, will succeed Hammergren as CEO and retain his role as president.
Glass Lewis Issues 2019 Policy Guidelines with Changes to Voting Recommendations
Glass Lewis (GL) released updates to its 2019 Policy Guidelines. The proxy advisor evaluates these guidelines on an ongoing basis and formally updates them annually.
Japan's GPIF Publishes First Report Discussing ESG Activities
Japan's Government Pension Investment Fund (GPIF) just issued its first ESG report to share its environmental, social and governance activities and their impact.
Qualtrics to IPO with Stringent Multi-Class Structure
Qualtrics International, a $4 billion online survey and enterprise software company, will go public next week with a multi-class capital structure designed to grant the founding family control, potentially in perpetuity.
Annual Index Highlights New Trends in Board Composition
Spencer Stuart's annual Board Index finds that female representation among new S&P 500 directors rose to 40%, the highest since the executive search firm began tracking this data in 1998.
PRI Report Advises Investors on How to Respond to Threat Posed by Income Equality
Principles for Responsible Investment (PRI) just published a report on income inequality-the gap in income and wealth between the very affluent and the rest of society.
ACCF Report Slams Proxy Advisors
The American Council for Capital Formation, a free-market, pro-business think tank just published a report discussing a survey it conducted and criticizing proxy advisory firms for wielding undue influence over institutional investors' proxy voting decisions.
2018 Fall Conference Wrap-Up
CII's fall conference in New York City broke a record for attendance - more than 630 members and guests registered for the October 23-25 event at the Grand Hyatt Hotel. The roster of speakers was packed, too, and they addressed an array of hot topics. Below are summaries of the highlights, including links to audio and video recordings of most sessions. These session recordings and others from previous CII conferences can be found on CII's Media Archive page (member login required).
CII Petitions NYSE, NASDAQ to Curb Listings of Multi-Class Share Companies
CII filed petitions October 24 with the New York Stock Exchange (NYSE) and the NASDAQ asking both to amend their listing standards to require that, going forward, companies seeking to list that have multiple share classes with differential voting rights include in their governing documents provisions that convert the share structure within seven years of the initial public offering (IPO) to "one share, one vote." This will ensure voting power directly proportional to an investor's capital at risk.
CII Urges Members to Support Petitions in Letters to Exchanges
CII encourages members to write their own letters of support for listing standards that require time-based sunsets for multi-class companies.
MSCI Opts to Continue to Include Unequal Voting Structures in Indexes
MSCI will continue to allow equity securities with unequal voting structures to be eligible for inclusion in the MSCI Global Investable Market Indexes, the index provider announced October 30.
Shareholder Revolt at Rite Aid as Say on Pay Fails, Shareholder Proposals Pass
Rite Aid's say-on-pay proposal received just 16% of the votes cast and shareholder proposals on sustainability reporting, risks related to opioids and appointment of an independent board chair all received majority support at the company's October 30 annual meeting.
NY Attorney General Sues ExxonMobil over How it Accounted for Climate Change
New York Attorney General Barbara Underwood October 24 filed a lawsuit against ExxonMobil, alleging that the company misled investors about how it was accounting for the risks that climate change regulations pose to the company's business.
SEC Asks Boards for More Analysis in No-Action Requests
Just as proponents are starting to file the bulk of shareholder proposals for the 2019 proxy season, the SEC released a new staff legal bulletin offering additional guidance on the ordinary business exclusion rule (Rule 14a-8(i)(7)) and the economic relevance exclusion rule (Rule 14a-8(i)(5)).
Exchanges and Traders Clash at SEC Roundtable on Market Data
The SEC held a two-day roundtable on market data and market access on October 25-26 that elicited sharply divided views. "The time for transparency in these markets is long overdue," SEC Commissioner Robert Jackson said at the forum.
Women in Corporate Leadership Face "Glass Cliff," ISS Study Finds
Women are more likely to be appointed as CEOs at companies with lower valuations than male peers, according to a new ISS study.
CalSTRS Hires New Corporate Governance Director
Kirsty Jenkinson, former managing director and sustainable investment strategist at Wespath Investment Management, has been hired as director of corporate governance at CalSTRS and will start in January 2019. She replaces Anne Sheehan, who retired in March.
Icahn Says Dell Deal to Return to Public Markets Shortchanges Holders
Activist investor Carl Icahn on October 18 said he would again fight Dell, specifically on the company's plan to return to public markets.
Coalition Pushes for Independent Board Chair at Facebook
Three state treasurers and a city comptroller filed a shareholder proposal at Facebook on October 17, asking the tech giant to separate the roles of CEO and chair.
Delaware Chancery Finds Activist Hedge Fund Participated in Board Breaches of Duty
In a ruling that could cast a shadow on directors closely tied to dissident shareholders, Delaware Vice-Chancellor J. Travis Laster found that shareholder plaintiffs in In re PLX Technology Inc. Stockholders Litigation proved that the board of PLX Technology breached its duty of disclosure and that directors' actions during the process of selling the company "fell outside the range of reasonableness."
SEC Votes to Block Data Fee Increases Sought by NYSE and NASDAQ
The SEC on October 16 turned down two requests by the NYSE and NASDAQ to raise the fees they charge brokers and banks for certain market data.
Updated CommonSense Principles Align More Closely with CII Policies
CII praised the CommonSense Principles 2.0, a set of corporate governance principles unveiled October 18 by a group of business and investment leaders.
Zero-Vote Shares Reappear
Last year, Snap went public with non-voting shares causing considerable consternation for investors. Altice USA, Blue Apron and Cadence Bancorp also authorized issuance of zero-vote shares following their 2017 IPOs, as did Dropbox this year, but none of the four have issued such shares.

Uranium Trading Corporation last week published a draft prospectus indicating it will go public offering only non-voting shares to the public, much like Snap. All votes at Uranium Trading will be held by insiders. The control provisions may relate in part to national security issues, although the prospectus does not seem to indicate this. The company, which seeks to raise just $58 million, was formed to provide a vehicle to invest in the international uranium market, seeking commercial business and trading opportunities, and a pathway to invest in storage of physical uranium with the goal of capital appreciation. The company's focus is enriched uranium products about which there are intense security concerns. The company notes that there is no liquid public market for sale of uranium products.
Moody's Proposes Creating Corporate Governance Scoring System
Moody's Investors Service is requesting feedback on a proposed scoring framework for assessing the corporate governance characteristics of publicly traded non-financial companies.
Chamber of Commerce Takes Aim at Proxy Advisors, Shareholder Proposal Rules
The Chamber of Commerce's Center for Capital Markets Competitiveness (CCMC) on October 9 hosted a panel discussion and released two new publications that are critical of proxy advisors and the "outdated shareholder proposal system."
Rite Aid Faces Opioid Proposal, Vote-No Campaign at October 30 Annual Meeting
Rite Aid shareholders received letters from two union pension funds this week urging them to vote at the October 30 annual meeting for a proposal addressing opioid business risks and against the company's say-on-pay proposal.
NACD Report Calls for Better Board Oversight of Disruptive Risk
The National Association on Corporate Directors on October 1 released a new blue ribbon commission report, on "Adaptive Governance: Board Oversight of Disruptive Risks".
Tesla Reaches SEC Settlement after Musk's Brinksmanship
Tesla and its chair/CEO, Elon Musk, unexpectedly turned down a settlement with the SEC last week over his market-moving tweet that said funding had been secured to take the company private.
CII Updates Dual-Class IPO Statistics
In the first three quarters of 2018, a total of 197 companies went public on U.S. exchanges, finds CII's tracking of the IPO market.
Diverse Coalition Forms to Accelerate Board Diversitydiversity
Five director organizations are joining forces to help make corporate boards more diverse in a variety of different respects.
State Street Takes Fearless Girl Campaign One Step Further
Starting in 2020 in the U.S., U.K. and Australian markets, and in 2021 in Japan, Canada and continental Europe, State Street Global Advisors will vote against the entire slate of board members on a nominating committee if the company does not have at least one woman on its board and has not engaged with State Street Global Advisors' board gender diversity program for three consecutive years.
Corporate Consortium on Climate Change Adds U.S. Members, Sets Targets
Last month, Chevron, ExxonMobil and Occidental Petroleum joined a consortium of global oil companies seeking to address climate change and the group declared its first methane reduction objective.
Investors Petition SEC for Rules Requiring ESG Disclosure
A large group of state treasurers, public pension funds and unions, many of which are CII members, filed a petition for rulemaking with the SEC on October 1, asking the commission to propose rules requiring public companies to disclose environmental, social and governance (ESG) aspects of their operations.
ISS, CII Launch Website Opposing Chokehold Regulation for Proxy Advisors
Institutional Shareholder Services (ISS) and CII on October 2 launched an educational website, protectshareholders.org, to oppose the U.S. House-approved bill to create a new regulatory structure for proxy advisory firms.
U.S. Officials Discuss Plans to Implement CFIUS Reform
U.S. government officials and practitioners discussed how the Treasury Department will implement the Foreign Risk Review Modernization Act (FIRRMA), which strengthens and modernizes the Committee on Foreign Investment in the United States (CFIUS) at a September 25 event at the Center for Strategic and International Studies. CFIUS reviews foreign investments in U.S. businesses for na
SEC Permits Nasdaq Tweaks to Shareholder Approval Rules
The SEC on September 26 adopted a Nasdaq-proposed rule to revise slightly the circumstances in which a private placement diluting equity or voting power by 20% or more must obtain shareholder approval.
SEC Schedules Roundtable to Examine Proxy Plumbing
The SEC will host a roundtable November 15 on key aspects of the U.S. proxy system, including proxy voting mechanics and technology, the shareholder proposal process, and the role and regulation of proxy advisory firms.
Key Executive Pay Provisions in Dodd-Frank Act Languish at SEC
Eight years after President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act--a 2,300-page document authorizing some 400 rules--several key executive compensation provisions in the law still have not been implemented by the SEC.
Through Collaboration, Wellington Seeks to Quantify Climate Risks
Wellington Management is teaming up with the Woods Hole Research Center (WHRC) on Cape Cod to study how climate change might affect capital markets around the world.
Investors Approve Second Proposal Asking Gun Maker to Report on Safety Measures
At American Outdoor Brands' (AOB) September 25 annual meeting, shareholders passed a controversial proposal asking the company's board to report on measures it is taking to strengthen gun safety and mitigate harm associated with gun products.
SEC Commissioner Jackson Calls for Tougher Oversight of U.S. Exchanges
SEC Commissioner Robert Jackson urged the agency to step up oversight of U.S. stock markets to better manage conflicts of interest and curb the proliferation of fees the exchanges charge users.
Snap Chair Responds to CII Letter
Snap Chair Michael Lynton this week responded to a letter from CII and 18 investors that objected to the no-vote share class being offered to public investors in Snap’s IPO.
Data on Audits, Auditors Skyrocketed Since 2012, Finds EY Study
The amount of information about corporate audits and auditors disclosed in 2018 proxy statements has increased dramatically since 2012, finds a new study by the EY Center for Board Matters.
New Bill Calls for SEC Rules Requiring Firms to Disclose their Climate-Related Risks
Sen. Elizabeth Warren (D-Mass.) introduced a bill September 17 that instructs the SEC in the next year to issue rules requiring public companies to disclose information about their exposure to climate-related risks.
More Public Pension Funds Purge Investments in Companies Operating Private Prisons
Over the summer several public pension funds added their names to the list of funds divesting their holdings in public companies that own or operate private prisons and facilities that detain immigrants.
Another Reason the SEC Withdrew Proxy Advisor Guidance
The September 13 announcement by the SEC's Division of Investment Management that it was withdrawing 2004 guidance on proxy advisors was widely viewed by many institutional investors as a well-timed slap at ISS and Glass Lewis at the behest of the business community.
New Bill Would Regulate Proxy Advisory Firms
Rep. Shawn Duffy (R-Wisc.) introduced legislation (H.R. 4015) October 11 to create a new federal regulatory scheme for proxy advisory firms.
CBS Moonves Firing: Clips of the Week
Several corporate governance issues were at the forefront in the weekend firing of CBS Chairman and CEO Leslie Moonves, including the board handling of sexual harassment by a senior executive, dual class stock, board composition and renewal, and executive pay (Moonves has been one of the most highly paid CEOs, attracting much criticism).
Canadian Commission's New Whistleblower Program Produces Results
In 2016, the Ontario Securities Commission (OSC) launched a Whistleblower Program that accepts tips on possible violations of Ontario securities law and offers individuals who come forward protections as well as compensation of up to $5 million for tips that lead to enforcement action.
NACD Breaks Down Gender Pay "Gap" and "Equity"
The National Association of Corporate Directors (NACD) held a webinar September 13 on what boards need to know and do about gender pay equity and the gender pay gap.
New Study Analyzes Large Asset Managers' Votes on Climate-Related Proposals
The 50/50 Climate Project released a new report September 12 examining the world's 13 largest asset managers' U.S. proxy voting in carbon-intensive industries.
CFA Institute, PRI Publish Report on ESG Integration in the Americas
The CFA Institute and the United Nations-supported Principles for Responsible Investment (PRI) today published a report on the extent to which portfolio managers in the Americas are integrating environmental, social and governance (ESG) factors into investment analyses and processes.
Update on CII's Board Accountability List and Letter Writing Campaign
According to CII's board accountability list, 45 shareholder proposals received, and 33 director nominees failed to receive, majority support from shareholders so far in 2018.
SEC Withdraws 2004 Guidance on Role of Proxy Advisors
The SEC Division of Investment Management September 13 withdrew two no-action letters granted in 2004 to two proxy advisors.
Universal Proxies, Blockchain Technology are Keys to Proxy Voting Reform, CII Executive Director Tells SEC Committee
The current proxy plumbing regime needs to be reformed to create a proxy voting system that is timely, accurate, transparent (including routine end-to-end vote confirmation) and efficient, CII Executive Director Ken Bertsch told the SEC's Investor Advisory Committee
Nomination System Gains Traction in Taiwan
Shareholders justifiably expect to have an opportunity to review board nominees weeks before annual meetings. But that’s not the case for shareholders at the majority of publicly traded Taiwanese companies.
Costco Joins Companies Disclosing Info on Gender Pay
Following in the steps of Starbucks, Nike and Gap, Costco will be disclosing more information about its gender pay.
JD.com's #MeToo Moment Spurs Extensive Governance Concerns
Liu "Richard" Qiangdong, founder and CEO of the $45 billion NASDAQ-listed Chinese e-commerce company JD.com, was arrested August 31 in Minneapolis on suspicion of rape.
Senate Confirms Roisman as SEC Commissioner
The Senate voted 85-14 September 5 to confirm Elad Roisman as an SEC commissioner.
CII Comments on PCAOB's Draft Strategic Plan
CII filed a comment letter September 6 in response to the PCAOB Draft Strategic Plan 2018-2022.
California Assembly Passes Bill Requiring CalSTRS, CalPERS to Report on Climate-Related Risks
The California State Assembly August 30 passed a bill, S.B. 964, that would require CalSTRS and CalPERS to report on the climate-related risks to their portfolios.
GE Auditor Vote Shows Institutional Divide
Now that the August 31 deadline has passed for asset managers to file N-PX forms with the SEC indicating how they cast their proxy ballots, companies and investors are getting a clearer picture of major themes emerging from the voting landscape during proxy season 2018.
2018 Proxy Season Sees Surge in Number of Failed Say-on-Pay Votes
The number of say-on-pay proposals at Russell 3000 companies that failed this proxy season almost doubled, climbing to 51, from 29 in 2017and 28 in 2016, ISS data shows.
Quarterly Reporting v. Quarterly Guidance
CII in June expressed support for a Business Roundtable statement generally discouraging companies from providing quarterly earnings guidance.
Upcoming Meetings to Watch
Old Republic International Again Ignores Shareholder Votes
At Old Republic International's May 25, 2018, annual meeting, a large majority of shareholders supported a proxy access proposal and withheld votes for all four directors standing for election.
California Assembly Passes Bill Requiring Companies to Add Female Directors
The California State Assembly in a 41-21 vote on August 29 approved a bill that would require publicly traded California companies to include more women on their boards.
Clayton Proposes Expanding Section 404(b) Exemptions for Smaller Companies
SEC Chair Jay Clayton has directed commission staff to draft recommendations for amendments to reduce the number of companies that need to provide the auditor attestation report on internal control over financial reporting required by Section 404(b) of the Sarbanes-Oxley Act, he said at the Nashville 36/86 Entrepreneurship Festival.
Eventbrite Opts for 10-Year Dual-Class Sunset
Consumer Federation White Paper Urges SEC to Stand Firm on Forced Arbitration
The Consumer Federation of America (CFA) August 21 sent the SEC a white paper detailing why it would be both contrary to the securities laws and bad public policy to permit public companies to adopt forced arbitration agreements.
ICI Rebuts "Common Ownership" Hypothesis
The Investment Company Institute (ICI), the trade association for mutual funds, sent the Federal Trade Commission (FTC) a comment letter August 20 refuting the "common ownership" hypothesis - the notion that institutional investors holding small, non-controlling stakes in competing companies in concentrated industries, such as airlines and banks, decrease competition and raise consumer prices.
NYC Comptroller Compiles Examples of Best Disclosure on Directors
New York City Comptroller Scott Stringer's Office just published a compendium of examples of best practices for disclosure of corporate directors' qualifications and attributes.
Vanguard Expanded Engagements, Areas of Focus and Global Coverage in 2018
Vanguard provided insight into how it engaged with companies across the globe and voted on 168,786 proposals this past proxy season in its 2018 Investment Stewardship Annual Report, issued August 16.
CII Response to Trump's Tweet on Quarterly Reporting Makes News
CII received a generous amount of press coverage on its response to President Trump's August 17 tweet calling for the SEC to study changing required financial reporting for public companies from a quarterly system to reporting every six months.
New SEC Disclosure Rules Incorporate CII's Recommendations
A final rule on altering corporate disclosures adopted by the SEC August 17 reflects many of the recommendations that CII submitted when the changes were proposed originally in 2016.
Senate Banking Committee Schedules Vote on Roisman for SEC
PCAOB Seeks Comments on Five-Year Strategic Plan
Takeaways from BlackRock's Q2 Stewardship Report for the Americas
Controversy Continues to Churn on Musk's Go-Private Tweet
CFIUS Reform Becomes Law
Warren Bill Would Require Boards to Answer to All Major Stakeholders
CII, Managed Funds Association Urge FTC to Tackle Hart-Scott-Rodino Reform
CII Rebuts Wall Street Journal Editorial on Proxy Advisors
Vote Tallies are In for McKesson Director and Proposals
The vote tallies are in from the contentious July 25 annual meeting at McKesson that featured a vote-no campaign and four shareholder proposals.
Law Firms Report on Recent IPO Governance Trends
On the heels of the most robust half-year of IPO activity since 2014, Davis Polk & Wardwell has published its 2018 survey on the governance of IPO companies and WilmerHale has released its 2018 IPO report that examines an array of IPO and capital market trends.
Asian Investor Group Dives Deep into Chinese Corporate Governance
A new report by the Asian Corporate Governance Association (ACGA) surveys the evolution of China's regulatory and capital markets landscape and examines its emerging system of "corporate governance with Chinese characteristics."
Hong Kong's Dual-Class Rollout Hits Speedbumps
In April, the Hong Kong Stock Exchange (HKEx) adopted new listing standards allowing technology companies to go public with weighted voting rights (WVR), or dual-class structures with unequal voting rights.
Investor Voting Strongly Supports Management
Persistent debate over proxy advisors has led some observers to overstate the extent of disagreement between boards and both shareholders and proxy advisory firms.
As You Sow Uncovers ISS Voting Error
An analysis by As You Sow of say-on-pay votes uncovered a mistake in how ISS casted proxy votes for a pension fund client.
ISS Solicits Feedback in its Annual Governance Principles Survey
ISS is conducting its annual governance principles survey to help the proxy advisor develop its policies on a variety of governance topics across global markets.
SEC Set to Re-Examine Proxy Rules at Fall Roundtable
SEC Chair Jay Clayton announced July 30 that the commission will host a roundtable sometime this fall to hear from investors, companies and other market participants about whether the SEC's proxy rules should be "refined."
News from CII
News from CII
U.K. Group: Spin off FRC's Governance Arm to Strengthen Audit Oversight
The Financial Reporting Council (FRC), which currently oversees the U.K.'s corporate governance framework and accounting standards, should spin off its governance responsibilities to another entity, the Institute of Directors (IoD) recommended August 7.
Report Offers Insights on Board Oversight of Cyber Risk
A report, "How Boards Can Lead the Cyber-Resilient Organization,"by the Economist Intelligence Unit and Willis Towers Watson, suggests that directors and executives underestimate their companies' vulnerability to the risk of cyber threats.
Former SEC Enforcement Attorney is Likely Nominee to Succeed Commissioner Stein
Allison Lee, who previously served as an aide to SEC Commissioner Kara Stein, as well as an enforcement attorney at the commission, is reportedly President's Trumps' nominee to replace Stein, whose term has expired.
Investors' Coalition Withdraws Proposal at Cardinal Health
A group of institutional investors who are members of the Investors for Opioid Accountability (IOA) coalition withdrew a shareholder proposal they had filed at Cardinal Health after the pharmaceutical company agreed to issue reports on two board probes of opioid-related risks.
Musk's Tweets on Tesla Going Private Raise Multiple Questions
Uber, Eying 2019 IPO, Hires Covington Partner Keir Gumbs
Uber Technologies took another step toward a planned 2019 IPO by hiring Keir Gumbs, a partner with Covington & Burling in Washington, D.C. Gumbs, an expert on corporate governance and securities regulation, will start September 1 as Uber's associate general counsel, corporate transactions and deputy corporate secretary.
Companies and Investors Clash Over Impact of SEC's Transaction Fee Pilot
?The SEC's proposed Transaction Fee Pilot, which is meant to test the impact of exchange rebates on execution quality for investors, has attracted controversy.
CII Staffers Discuss Key Governance Issues on Capitol Hill
With Congress quiet during August recess, CII staffers are meeting with key Congressional aides.
Senate Democrats Reproach SEC Chairman over Former ITT CEO's Fine
Investors Say "No" in More Say-on-Pay Votes
CII Members Share 2018 Proxy Season Accomplishments During Teleconference
ILPA Encourages CII Members to Comment on SEC Proposal
CII Alerts Companies to Investor Support for SEC Transaction Fee Pilotpilot
CII Files Amicus Brief with SCOTUS
FYI
FYI
Upcoming Events
Upcoming Events
News from CII
News from CII
Clarification
The July 12 issue of CII's Governance Alert did not accurately describe a shareholder proposal under consideration at McKesson's July 25 meeting related to metrics used for executive compensation.
New Study Reinforces Case for Time-Based Sunsets
A new paper, "Dual Class Share Structure and Innovation," examines the association between insider control at founder-led, dual-class firms and the innovation output of those firms, such as patents and citations.
Senator Presses SEC to Improve Human Capital Management Disclosure
Sen. Mark Warner (D-Va), sent a letter July 19 urging the SEC to use its rulemaking authority to require companies to ramp up their human capital management disclosures.
IRRCi Selects Weinberg Center as Successor
The Investor Responsibility Research Center Institute selected the John L. Weinberg Center for Corporate Governance at the University of Delaware as its successor organization.
BlackRock Explains How it Views Stewardship in New Paper
BlackRock, in a just-published paper, The Investment Stewardship Ecosystem, discusses its view of the different roles of asset managers, asset owners, index providers and proxy advisors.
U.K Council Issues Revamped Governance Code
The U.K.'s Financial Reporting Council on July 16 released an updated Corporate Governance Code.
Coalitions' Initiatives Spur Board Diversity
Campaigns launched by the Midwest Investors Diversity Initiative and the Thirty Percent Coalition appear to be effective in making corporate boards more diverse.
House Passes Bipartisan Bill That Includes Investor Protections
CII applauded the House passage July 17 of a bill, the JOBS and Investor Confidence Act of 2018 (S. 488), aimed at supporting small businesses' access to capital.
Upcoming Events
Upcoming Events
New Member Spotlight
New Member Spotlight: World Gold Council
News from CII
News from CII
CII Updates Dual-Class IPO Statistics
In the first half of 2018, 133 companies went public on U.S. exchanges, finds CII tracking of the IPO market.
CII Supports Legislation on 10b5-1 Trading Plans, Multi-Class Stock Disclosures
CII sent a letter July 10 to the chair and ranking member of the House Financial Services Committee expressing support for the proposed Promoting Transparent Standards for Corporate Insiders Act (PTS Act) and the Enhancing Multi-Class Stock Disclosures Act (EMS Act).
Opioids: Unsealed Lawsuit Highlights Role of Incentive Design, Human Capital Decisions
Among numerous revelations contained in the recently unsealed complaint, State of Tennessee v. Purdue Pharma, is an incentive structure at Purdue that is all too familiar to Wells Fargo observers, where hazardous incentives were found not at the top levels of management, but within the salesforce.
Midwest Investor Diversity Initiative Reports Progress on Board Diversity
The Midwest Investor Diversity Initiative, a 10-member investor coalition with $300 billion in assets under management, on July 12 reported that 16 companies with which it has engaged have adopted diverse candidate search policies, and six of the companies have appointed women and minorities to their boards.
McKesson Shareholders are Set to Apply Pressure at July 25 Annual Meeting
McKesson faces four shareholder proposals and a vote-no campaign at its July 25 annual meeting.
Proxy Season 2018 Snapshot: Fewer Proposals Filed and Fewer Receive Majority Support
Shareholder proponents are on track to file fewer resolutions at companies in 2018 than in 2017, continuing a downward trend, according to ISS data.
CII Opens Registration for Fall Conference
CII Opens Registration for Fall Conference- From Cryptocurrencies to Climate Change, Speakers and Events You Won't Want to Miss
New Member Spotlight
New Member Spotlight: Impax Asset Management
Upcoming Events
Upcoming Events
News from CII
News from CII
CII's Accomplishments the Quarter
CII's Accomplishments the Quarter
Highlights from Annual Meetings at which CII Members' Proposals Came to Votes
Highlights from Annual Meetings at which CII Members' Proposals Came to Votes
Highlights from the 2018 Proxy Season
Highlights from the 2018 Proxy Season
Governance News This Quarter
Governance News This Quarter
IEX Submits Second Comment Letter on SEC's Transaction Fee Pilot
Stock exchange IEX filed a second comment letter with the SEC on the commission's proposal to conduct a Transaction Fee Pilot for National Market System stocks.
CII Weighs in on Proxy Advisor Bill, Legislation on Cybersecurity Expertise on Boards
CII sent a letter June 27 to the Chair and Ranking Member of the Senate Banking Committee expressing concerns about H.R. 4015, the Corporate Governance Reform and Transparency Act, which would impose substantially greater regulatory burdens on proxy advisory firms.
CII Updates Dual-Class Companies List
CII has updated and expanded its list of dual-class companies, which includes U.S.-incorporated public companies with a market capitalization of at least $200 million and at least two classes of outstanding stock with unequal voting rights.
Fed Up, HPT Holders Recommend Getting "Consequential"
Hospitality Properties Trust (HPT) disclosed June 20 that a shareholder resolution at its June 14 meeting asking the company to adopt "consequential" majority voting received support from 89.8% of votes cast.
SEC Approves Scaling Back Disclosure Requirements for More Companies
The SEC voted June 28 to expand the number of companies that can scale back their disclosures to the commission.
FYI
FYI
Upcoming Events
Upcoming Events
New Member Spotlight
New Member Spotlight: PSP Investments
News from CII
News from CII
Upcoming Meetings that Feature Members' Proposals
?The Governance Alert notes upcoming annual meetings at which proposals filed by CII members will come to votes.
Study Finds CEOs Received Highest Pay Increases Since Recession Last Year
In 2017, the CEOs at the nation's 300 largest public companies received the highest compensation increases since the recession, reports Korn Ferry's 11th annual compensation study.
SPACs Set to Break New Record in 2018
A record set in 2016, broken in 2017, on track to be surpassed once again in 2018: This is the story of the capital raised in IPOs by "special purpose acquisition companies" (SPACs).
Robust 2018 IPO Activity Continues
In the eight days between June 21 and 29, 21 companies comprising nearly $15.5 billion in market capitalization will make their debut on U.S. exchanges.
ASX Mulls Whistleblower Programs for Social Responsibility
Australia's ASX Corporate Governance Council has an outstanding consultation on whether to require ASX-listed companies to "instill and continually reinforce" a culture of social responsibility, including through the creation and disclosure of whistleblower programs that encourage employees to come forward when companies don't act in a "socially responsible manner."
Icahn Wins Majority of Board Seats at SandRidge
?The proxy contest at SandRidge Energy ended June 19 with activist investor Carl Icahn controlling five seats on an expanded board at the Oklahoma oil-and-gas company and incumbent directors holding three seats.
SEC Strategic Plan Emphasizes Three Over-arching Goals
"Main Street investors" are top-of-mind in the five-year strategic plan that the SEC issued on June 19.
SEC Chairman Clayton Discusses Shareholder Engagement and the Proxy Process
In remarks today before the House Financial Services Committee, SEC Chairman Jay Clayton reiterated his intention to have the SEC examine and issue public guidance on the proxy process.
SEC Regulation of Proxy Rules May Appear in U.S. Appropriations Legislation
The U.S. Senate and House appropriations committees are considering report language that seeks to nudge the SEC to take action on "proxy" issues, including those relating to proxy advisory firms.
Upcoming Events
Upcoming Events
News from CII
New Member Resource: CII's Online Trove of ESG Policies, Proxy Voting Guidelines and Other Stewardship Resources
Upcoming Meetings that Feature Members' Proposals
The Governance Alert notes upcoming annual meetings at which proposals filed by CII members will come to votes.
Revisions to U.K. Corporate Governance Code Will Ramp Up Disclosure Requirements
The U.K.'s House of Commons issued a briefing paper June 13 on a revised Corporate Governance Code that would require new disclosure on pay ratios and directors' actions.
New SEC Study Finds Exchanges Like IEX Help Level Playing Field
A study conducted by the SEC's Division of Economic Risk and Analysis finds stock exchanges, such as IEX Group, that slow down trading can protect regular investors from high-frequency traders who profit unfairly by exploiting their speedier market access.
Facebook's Dismissive Tactics at Annual Meeting Prompt Proponent to Pen Op-Ed
What happened at Facebook's May 31 annual meeting did not stay at Facebook's annual meeting.
Meeting Follow Ups
Meeting Follow Ups
SEC Commissioner Calls for Revamp of Rules Governing Stock Buybacks
After uncovering evidence that corporate executives sometimes use stock buybacks for their own enrichment, SEC Commissioner Robert Jackson Jr. called on the commission to open a comment period on rules that currently provide executives with a "safe harbor" from liability when pursuing buybacks.
CII Opposes Bill that Would Hinder State Regulators from Policing Securities Fraud
CII sent a letter June 12 to the chair and ranking member of the House Financial Services Committee's Subcommittee on Capital Markets expressing concerns about a proposed bill that would amend the federal securities laws to make it more difficult for state regulators to pursue civil claims of securities fraud.
FYI
?UAW RMBT is Looking for Senior Corporate Governance Analyst
Upcoming Events
Upcoming Events
New Member Spotlight
New Member Spotlight: Aon
CII News
CII News
Upcoming Meetings that Feature Members' Proposals
?The Governance Alert notes upcoming annual meetings at which proposals filed by CII members will come to votes.
Meeting Follows Ups
Meeting Follows Ups
NASDAQ Withdraws Plans to Relax Listing Requirements for SPACs
After receiving comments from CII and the Securities Industry and Financial Markets Association (SIFMA ) that raised questions, NASDAQ announced June 5 that it had withdrawn a proposed rule change that would have relaxed the listing requirements for securities of Special Purpose Acquisition Companies.
CII Presses Maryland REITs on Restrictive Threshold to Propose Bylaw Amendments
Between November 2017 and April 2018, the boards of 10 Maryland-incorporated REITs amended their companies' bylaws to provide shareholders a new right to propose binding bylaw amendments subject to a majority voting standard.
CII Opposes House Bills to Change Shareholder Proposal Rules and XBRL Disclosure
CII sent a letter June 6 to the chair and the ranking member of the House Committee on Financial Services expressing concerns about two pieces of legislation pending in the House.
BRT, with CII Support, Urges Move Away from Quarterly Earnings Guidance
CII is backing a new initiative by the Business Roundtable (BRT) to encourage companies to focus more on long-term performance.
FYI
CCGG Issues Guidelines for Boards to Oversee and Disclose ESG Matters
Upcoming Events
Upcoming Events
New Member Spotlight
New Member Spotlight: Wellington Management
CII News
CII's NYC Event it Ready to View
CII members who missed CII's lively discussion on "Public Company v. Private Company-Does it Matter?" during a May 17 event at PwC's headquarters in Manhattan can now view panelists' keen insights into the state of the U.S. capital markets here.
Upcoming Meetings that Feature Members' Proposals
Upcoming Meetings that Feature Members' Proposals
Meeting Follow Ups
Meeting Follow Ups
And, the Absentions Have It!
Range Resources was forced to issue two 8-Ks following its May 16 annual meeting.
Company Uses Governance Changes to Delay Proxy Fight
With a proxy fight initiated by activist fund Starboard Value looming at its July annual meeting, Mellanox Technologies held an extraordinary general meeting May 24.
CII Responds to U.K. Consultation on Insolvency and Corporate Governance
CII sent a letter May 31 to the U.K.'s Department of Business, Energy & Industrial Strategy (BEIS) responding to its consultation on "Insolvency and Corporate Governance."
CII Members Back SEC's Plans to Launch Transaction Fee Pilot Program
A group of pension systems and coalitions, including CalPERS, the Ontario Teachers' Pension Plan, the New York City Pension Funds and the State of Wisconsin Investment Board, co-signed a letter this week supporting the SEC's proposal to conduct a Transaction Fee Pilot for National Market System stocks.
New Member Spotlight
Investec Asset Management
CII News
CII News
Upcoming Meetings that Feature Members' Proposals
Throughout the 2018 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
New Groups Plan to Advocate for Retail Investors, Oppose ESG Investing
A former special assistant to the Trump Administration who served on both the National Economic Council and the National Security Council just launched the Main Street Investors Coalition, an education and advocacy group focused on organizing retail investors to oppose institutional investors' consideration of environmental, social and governance issues.
Some 2018 Failed Say-on-Pay Votes Show Rock Bottom Levels of Support
?So far this proxy season, say-on-pay proposals at 23 companies failed to receive majority support, and at several of those companies the votes were abysmally low.
CBS Court Battle with Redstones May Just Be Starting
Delaware Chancellor Andre Bouchard on May 17 denied CBS a temporary restraining order (TRO) against Shari Redstone's potential actions to interfere with the composition of the CBS board, or decisions taken at a May 17 board meeting.
Panel Examines Private vs. Public Companies at CII's NYC Event
?Panelists offered keen insights into the state of the U.S. capital markets during a lively discussion of "Public Company v. Private Company-Does it Matter?" at CII's New York event May 17.
CII Balks at House Proposals to Change Quarterly Financial Reports, Shareholder Proposal Rules and XBRL Disclosure
?CII sent a letter May 22 to the chair and ranking member of the House Financial Services Committee's Subcommittee on Capital Markets, Securities and Investment expressing concerns about three pieces legislation pending in the House.
FYI
FYI
Upcoming Events
Upcoming Events
New Member Spotlight
New Member Spotlight: IEX
Upcoming Meetings that Feature Members' Proposals
Throughout the 2018 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
What's Up with Up-C Structures?
An increasing number of companies are employing an "Up-C" corporate structure as they prepare to enter public markets through an IPO.
CBS Fight with Redstones Over Control Has Implications for Dual-Class Companies
CBS disclosed earlier this week that it planned to meet May 17 to consider declaring a dividend of Class A common shares to all Class A and Class B shareholders that would reduce the voting power of its controlling shareholder, National Amusements, Inc. (NAI), from approximately 79% to 17%.
SEC's Spring Reg Flex Agenda Bumps Up Hedging Proposal
The SEC's Spring "Reg Flex" agenda, published by the commission May 9, remains substantially the same as the regulatory agenda it published in the fall, but elevates a proposal on hedging disclosure to a higher priority.
House to Get Comprehensive Financial Reform Bill; Senators Weigh in on Proxy Advisors, Forced Arbitration
?In the House, a regulatory package that could include provisions affecting CII members is in the works. On the other side of Capitol Hill, Senators are weighing in on proxy advisors and mandatory arbitration clauses.
Upcoming Events
Upcoming Events
New Member Spotlight
Cornerstone Capital Group
Upcoming Meetings that Feature Members' Proposals
Throughout the 2018 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
Zynga Becomes "One Share, One Vote" as Founder Forfeits Control
Mark Pincus, Zynga's founder, chairman, and former CEO, relinquished control over the company May 3 by converting his super-voting Class B and C shares, carrying seven and 70 votes per share respectively, to Class A shares with one vote each.
CtW Investment Group Opposes Re-election of Three Tesla Directors
CtW Investment Group is urging Tesla shareholders to vote against all three of the company's directors who are standing for re-election at the electric car maker's June 5 annual meeting.
Company Targeted in Proxy Fight Opts to Add Dissident Directors, Use Universal Proxy
SandRidge Energy, which faced a proxy fight by billionaire investor Carl Icahn, announced May 7 that it is increasing the number of directors on its board from five to seven and will be using a universal proxy ballot in its upcoming director election.
Pressure from Investors, Banks, Asset Managers Prompts Gun Companies to Act
With public pressure for gun control mounting, investors are ramping up efforts to rein in the risks presented by investing in companies that manufacture and distribute firearms and ammunition.
Opioid Coalition's Governance Proposals, Engagements Prove Fruitful
A large coalition of investors is proving effective at pressing for improved governance at drug companies as a way to tackle the nation's opioid epidemic.
CII Encourages Implementation of SEC Pilot to Study Transaction Fees
CII sent a letter May 10 to the SEC in response to the commission's proposal to conduct a Transaction Fee Pilot for National Market System stocks.
CII Backs SEC's Efforts to Oversee Cryptocurrencies, ICOs
CII sent a letter May 8 to SEC Chair Jay Clayton supporting the commission's efforts to police cryptocurrencies and initial coin offerings (ICOs).
CII Supports MSCI's New Approach to Dual-Class Listings with Modifications
CII sent a comment letter to MSCI May 9, generally supportive of the index provider's consultation regarding the treatment of unequal voting structures. MSCI, which had never incorporated voting rights into its equity indexes, proposed in January to factor into each class's contribution to the index the proportion of each constituent's total voting power in free float.
Upcoming Events
Upcoming Events
FYI
FYI
News from CII
News from CII
Policies Committee Seeks Member Input on Proposed Preamble to CII Policies
CII's Policies Committee invites all CII members to comment on a draft Preamble to CII's member-approved corporate governance policies.
Clarification and Update
A story about Equifax that appeared in last week's Governance Alert said the CtW Investment Group is not a shareholder in the company. CtW is an adviser to union pension funds that are invested in Equifax.
Upcoming Meetings that Feature Members' Proposals
Throughout the 2018 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
Meeting Follow Ups
General Electric, Wells Fargo
Deloitte Publishes New Guide on Audit Committees
Deloitte's newly released Audit Committee Resource Guide provides guidance to help audit committees, management, investors and other stakeholders better understand the requirements, roles, responsibilities and common practices of the audit committee and its members.
Chamber Report Says Curbs on Proxy Advisors, Shareholder Proposals Will Spur IPOs
In a new report released by the Chamber of Commerce's Center for Capital Markets Competitiveness April 26, the chamber argues that more SEC oversight of proxy advisory firms and an increase in resubmission thresholds for shareholder proposals will help boost the number of IPOs.
Bill Would Limit Securities Fraud Claims to Federal Courts
H.R. 5037, the Securities Fraud Act of 2018, which was introduced in the House by Rep. Tom MacArthur (R-N.J.) and referred to the House Financial Services Committee in February, would provide for exclusive federal jurisdiction over civil securities fraud actions.
Hong Kong Exchange Decides to Permit Dual-Class Companies
The Hong Kong Stock Exchange announced April 24 that it has adopted amendments to the exchange's IPO policy to allow companies with "weighted voting rights" to be listed on the exchange's main board.
New DOL Guidance on ESG Takes Aim at Shareholder Engagement
The Labor Department's Employee Benefits Security Administration (EBSA) issued new guidance April 23 that cautions pension plan fiduciaries they "must not too readily treat ESG factors as economically relevant" to investment choices.
Upcoming Events
Upcoming Events
FYI
The US SIF Foundation invites CII members to participate in its survey, 2018 Report on US Sustainable, Responsible and Impact Investing Trends, which offers an overview of the U.S. institutions, organizations and money managers that consider environmental, social and corporate governance criteria.
New Member Spotlight
The Teacher Retirement System of Texas, the largest public retirement system in Texas, recently re-joined CII.
Upcoming Meetings that Feature Members' Proposals
Throughout the 2018 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
China's Tech Unicorns Leap toward Public Markets
Since the beginning of the year, at least a dozen Chinese companies with collective valuations of $500 billion have initiated the IPO process, reports The Wall Street Journal.
Meeting Highlights
Ameriprise Financial, Equifax.
Coalition Presses SEC to Oppose Forced Arbitration Clauses
A coalition of organizations sent a letter May 1 to SEC Chairman Jay Clayton urging the commission to safeguard investors' right to hold corporations accountable in court.
Competing Shareholder Proposals on Ownership Thresholds Garner Mixed Support
Voting results are streaming in for competing shareholder and management proposals on raising the ownership thresholds to call special meetings.
Upcoming Events
Upcoming Events
News from CII
Welcome New Members!
Upcoming Meetings that Feature Members' Proposals
Throughout the 2018 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
Support for Controversial Management Proposal at AES Declines
At AES's April 19 annual meeting, a management proposal ratifying bylaw provisions that provide shareholders who own at least 25% of outstanding shares the right to call a special meeting received 60% of the votes cast, reports John Chevedden.
Vrio and Pivotal Software Go Public with Dual-Class Structures
CII sent letters April 18 to Vrio and Pivotal Software, two companies that are launching IPOs with indefinite dual-class capital structures that provide their parent companies with super-voting rights
BlackRock Calls for Global Guidelines in Lieu of Curbing Dual-Class Shares in Main Indexes
BlackRock, rejecting moves by index providers to limit dual-class companies in broad market indexes, called for a global securities body to set a floor for corporate governance standards for companies to be eligible to list publicly on stock exchanges.
GE Meeting Agenda Highlights Accounting, Liability Concerns
Amid growing concerns about its lagging performance, undisclosed liabilities and questionable accounting practices, General Electric (GE) faces pressure to oust its long-tenured auditor as well as a bevy of shareholder proposals at its April 25 annual meeting.
Equifax Faces Vote-No Campaign Despite Engagement, Adoption of Reforms
A vote-no campaign against three directors at Equifax at its May 3 annual meeting follows the company's successful engagements with CII members that resulted in governance reforms and proposal withdrawals.
IEX Says Cost of Buybacks Inflated by Market Structure Problems, Seeks Amendment on Pricing
The Investors Exchange LLC recently petitioned the Securities and Exchange Commission to amend rule 10b-18 under the Securities Exchange Act of 1934.
Upcoming Events
Upcoming Events
News from CII
?CII welcomes Sands Capital as a new member.
Policies Committee Seeks Member Input on Proposed Preamble to CII Policies
CII's Policies Committee invites all CII members to comment on a draft Preamble to CII's member-approved corporate governance policies.
CII's Initiatives This Quarter
CII's Initiatives This Quarter
Governance News This Quarter
Governance News This Quarter
Upcoming Meetings that Feature Members' Proposals
Throughout the 2018 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
U.K. Advertising Titan Subject of Investigation
Martin Sorrell, who founded the massive global advertising firm WPP 30 years ago, is under investigation for improper behavior and misuse of company assets, reports The Wall Street Journal.
SEC Proposes Pilot Program on Impact of Stock Exchanges' Pricing Models
The SEC earlier this month unanimously proposed a pilot program to investigate how fees and rebates assessed by public stock exchanges affect order routing, trade execution and overall market quality.
ISS Opposes AES Proposal and Governance Chair
Institutional Shareholder Services (ISS) recommended a vote against an AES management proposal that would ratify bylaw provisions that provide shareholders who own at least 25% of outstanding shares the right to call a special meeting.
Starboard Presses on at Newell to Unseat Icahn's Newly Appointed Directors
Unimpressed by the deal that Newell struck recently with Carl Icahn, hedge fund Starboard is launching a proxy fight, nominating a short slate of four director candidates for election at the company's May 15 annual meeting.
Vote-No Campaigns Target Directors of Scandal-Plagued Equifax and VW
Two big companies that are struggling to put scandals behind them face vote-no campaigns against directors ahead of annual meetings in early May.
Study Group Publishes Guidance for Companies on Virtual Annual Meetings
A study group comprised of 17 executives representing retail and institutional investors, public companies, and proxy and legal service providers, on April 11 released a guide to help companies conduct virtual annual meetings.
FYI
Investors Invited to Sign On to Letter Opposing Forced Arbitration
Upcoming Events
Upcoming Events
CII Public Fund Members Elect Garland as CII Co-Chair
Members of CII's Public Fund Constituency voted on candidates for Public Fund Co-Chair over the last two weeks, with polls closing on Tuesday, April 2.
Policies Committee Seeks Member Input on Proposed Preamble to CII Policies
CII's Policies Committee invites all CII members to comment on a draft Preamble to CII's member-approved corporate governance policies.
UK Consultation Explores Director Culpability in Distressed Sales
The UK Department for Business, Energy and Industrial Strategy (BEIS) seeks comment through June 11 on whether to penalize parent company directors when the sale of an insolvent subsidiary causes foreseeable harm to creditors.
Mellanox Fight Illustrates Potential Benefit from Universal Proxy Rule
The fight between mid-cap tech company Mellanox Technologies and 10.6% holder Starboard Value highlights the disorder that can result from a lack of uniform rules establishing a process for resolving proxy contests with a universal ballot.
Study Adds to Case Against Perpetual Dual Class
A new study by Cornell's Hyunseob Kim and Roni Michaely, covering 50 years of data on U.S. companies, finds that while young dual-class companies are more valuable than counterparts as measured by a simple ratio of market value to book value, "their value deteriorates more rapidly as they mature."
SEC Staff Approves Two-thirds of Company Requests to Omit Shareholder Proposals
Between December 1 and April 2, the SEC staff approved omission of 113 shareholder proposals, and declined to provide "no-action" relief on 58 proposals.
Spotify Completes its Unconventional "IPO"
On April 2, music streaming service Spotify became the largest company to offer shares to the public through a "direct listing" on an exchange, an unconventional path to going public that bypasses the underwriting process and costs significantly less in fees than a traditional IPO.
Companies Keep Pay Ratio Disclosures Short and Sweet
As we start seeing U.S. pay ratio disclosures, key disclosure trends are emerging.
FYI
FYI
Upcoming Events
Upcoming Events
Bill Would Put Reins on Stock Buybacks
Senator Tammy Baldwin (D-Wisc.) on March 22 introduced the Reward Work Act, to "rein incorporate America's addiction to stock buybacks by giving workers a say in how their company's profits are spent."
Surge in Chinese Companies Going Public
In the week between March 23 and March 30, five Chinese companies with a collective market capitalization of $23 billion held IPOs on U.S. exchanges.
SEC No-Action Responses: Limited Change in Staff Views from Prior Years
SEC staff no-action guidance to companies on omitting shareholder proposals indicates less change this year than some observers had anticipated, according to CII review of the staff decisions.
Green Loan Principles Launched
The Loan Market Association (LMA) and the Asia Pacific Loan Market Association (APLMA) March 21 launched the Green Loan Principles.
GAO Reports on Disclosures under SEC Climate-Related Disclosure Guidance
The U.S. Government Accountability Office (GAO) March 22 released a report on climate-related risk disclosure in SEC reporting.
Qualcomm Directors Avert Proxy Fight but Face Backlash
President Trump signed an order March 12 prohibiting Broadcom's hostile takeover of Qualcomm and disqualifying all six director nominees that appeared on its dissident slate in the proxy fight at Qualcomm.
NYC Comptroller Calls for Change on Facebook Board
New York City's Comptroller Scott M. Stringer, who serves as investment adviser to five city pension funds, has called for changes on the Facebook board in reaction to the Cambridge Analytica scandal involving improper harvesting of information from Facebook users.
Supreme Court Ruling Could Result in More Securities Class Action Filings in State Courts
In a unanimous decision, the U.S. Supreme Court ruled March 20 that state courts have jurisdiction over class actions brought under the Securities Act of 1933, and that such actions cannot be shifted from state to federal court.
CII Report Reflects Frank Views on Executive Pay
A CII report on the views of a wide range of stakeholders on executive compensation reflects growing skepticism about current pay-for-performance practices.
Investors Weigh In as Asia Invites Dual-Class Listings
Singapore Exchange Limited (SGX) announced that it will soon allow "new economy" companies to list in Singapore with dual-class structures.
Upcoming Events
Upcoming Events
CII's Spring 2018 Conference Overview
From March 12-14 more than 500 CII members gathered at the Omni Shoreham Hotel in Washington, D.C., to hear speakers address issues ranging from corporate culture to emerging markets.
Chevedden Uses Exempt Solicitations to Refute Management Proposals
After the SEC permitted companies to exclude his special meeting shareholder proposals, in favor of management proposals to ratify present special meeting bylaws, proponent John Chevedden is employing a new technique to express his views.
FRC CEO Recommends Allowing 'Big Four' to Stick to Auditing Only
The chief executive of the U.K.'s Financial Reporting Council (FRC), which regulates accountants, recommended that Britain's Competition and Markets Authority (CMA) consider allowing the "Big Four" (Deloitte, EY, KPMG and PwC) to conduct only services directly related to audits, reports The Financial Times. Such a move would force these firms to spin off their U.K. audit arms into separate businesses.
Colorado PERA Weighs in On Key Accounting Issues
Last week, Colorado PERA (COPERA) issued two important letters on accounting-related topics.
CII Urges HKEX to Require Dual-Class Sunset Provisions
CII submitted a comment letter March 22 in response to a Hong Kong Stock Exchange (HKEX) proposal to allow dual-class stock structures (which HKEX refers to in the consultation as weighted voting rights or WVR).
Dual-Class Structure at Theranos Gave CEO Almost Absolute Power
The demise of Theranos offers a cautionary tale about dual-class corporate structures.
Facebook's Dual-Class Structure Protects CEO Amid Furor Over Misuse of Data
Facebook CEO and founder Mark Zuckerberg, facing intense criticism over misuse of data belonging to 50 million users of the social network, vowed to step up efforts to protect users' privacy.
Tesla Shareholders Approve CEO's Colossal Pay Plan
At a March 21 special meeting, about 73% of the shares cast by Tesla's outside shareholders voted to approve a $2.6 billion pay package for Chair and CEO Elon Musk.
Upcoming Events
Upcoming Events
CII News
CII News
Upcoming Meetings that Feature Members' Proposals
Throughout the 2018 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
U.K.-Based Asset Manager Holds Auditors' Feet to Fire
This proxy season Sarasin Asset Management, a U.K.-based money manager, will continue to focus on making auditors accountable using its proxy votes and opportunities for engagement.
Senate Clears Bank Bill, Sends to House
The Senate on March 14 passed S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, which would rewrite portions of the Dodd-Frank Act.
CII Elects New Board, Names Florida SBA Executive Director & CIO Ashbel Williams Chair
CII has elected a new board of directors for 2018-19, and named Ashbel Williams, executive director and CIO, Florida State Board of Administration (SBA), board chair.
CII News & Member Benefits
CII News & Member Benefits
Letter Asks SEC Staff to Reconsider No-Action Decision on GHG Emissions Proposal
Trillium Asset Management sent a letter to the chief counsel of the SEC's Division of Corporation Finance asking the division's staff to reconsider a February 26 no-action decision it made allowing a greenhouse gas emissions proposal to be omitted under the ordinary business exclusion of Rule 14a-8(i)(7).
Qualcomm-Broadcom Showdown Postponed as CFIUS Conducts Review
Singapore-based Broadcom's hostile takeover of San Diego-based Qualcomm hit a potentially insurmountable obstacle as the Committee on Foreign Investment in the United States (CFIUS), an interagency body with the power to derail foreign takeovers of U.S. companies, ordered Qualcomm to postpone its March 6 shareholder meeting so it can review the transaction.
Independent Shareholders Get Behind Proposals at AmerisourceBergen
Three shareholder proposals filed by members of the Investors for Opioid Accountability (IOA) received significant levels of support from independent voters at AmerisourceBergen's March 1 annual meeting.
Under Duress, Wells Fargo Agrees to Board Changes, Report on Scandals
Responding to increased pressure from shareholders, Wells Fargo is shaking up its board and issuing a report on the root causes of the unethical behavior that led to the bank's high profile scandals.
SEC Echoes CII Concerns Over NYSE Proposal to Ease SPAC Listing Rules
Instead of approving a petition submitted by the NYSE to relax its listing requirements for special purpose acquisition companies (SPACs), the SEC on March 6 requested more information and analysis to justify the proposed rule changes.
Banking Bill Wends its Way Through Senate
This week the Senate is debating S. 2155, the "Economic Growth, Regulatory Relief, and Consumer Protection Act, " which would rewrite portions of the Dodd-Frank Act.
SEC Investor Advisory Committee Recommends Requiring Dual-Class Companies to Amp Up Disclosure
The SEC's Investor Advisory Committee (IAC) on March 8 recommended that the commission's Division of Corporation Finance require public companies that have dual-class or "other entrenching governance structures" to strengthen disclosure about their ownership and voting power.
Former PCAOB Chief of Staff Publishes Guide on Audit Reports
Samantha Ross, chief of staff and former special counsel for James R. Doty, who is the former chairman of the Public Company Accounting Oversight Board, has published an investor friendly guide to the new disclosures contained in public company audit reports.
CII News & Member Benefits
CII News & Member Benefits
Chicago Treasurer Proposes ESG Approach for City's Fixed-Income Portfolio
Chicago Treasurer Kurt Summers is proposing that the Chicago City Council amend the city's investment policy to permit consideration of long-term risk in environmental, social and governance factors.
CII Members Continue to Focus Efforts on Increasing Board Diversity
This proxy season, CII members are continuing to work on improving diversity on the boards at the companies in which they invest.
Dropbox IPOs with Multi-Class Structure Including No-Vote Share Authority
Dropbox on February 23 filed a preliminary prospectus indicating it will go public with a three-class common share structure, including authority to issue non-voting shares. (See "Dropbox Avoids Snap's IPO Mistakes, But Only Slightly").
Spotify's Direct Listing: Good News and Bad News
Spotify, the music-streaming service valued at between $18-20 billion, will go public as a foreign private issuer through an unorthodox direct listing on the NYSE.
Hong Kong Exchange Proposes Permitting Weighted Voting Rights
As expected, the Stock Exchange of Hong Kong (HKEx) on February 23 proposed new listing rules to permit listings of companies with weighted voting rights (WVR), and other changes.
Two Top SEC Officials Push Back Hard on Forced Arbitration
In separate speeches just days apart, an SEC commissioner and the agency's investor advocate blasted the idea of barring shareholders from filing lawsuits against companies.
CII's Co-Signed Letter Outlines Proxy Advisor Bill's Worrisome Provisions
CII sent a letter co-signed by 48 institutional investors and investor organizations February 27 to the chair and ranking member of the Senate Banking Committee expressing serious concerns about H.R. 4015, the Corporate Governance Reform and Transparency Act of 2017.
Many on Wall Street Reassess Exposure to Guns in Wake of Tragedy in Florida
Public outcry resulting from the deaths of 17 high school students in Parkland, Fla., at the hands of a gunman wielding a semi-automatic weapon has prompted many on Wall Street to re-examine their investments in, and ties to, gun manufacturers and retailers.
New CII Report Details Steps Corporate Boards Can Take to Combat Sexual Harassment
A new CII report offers public company boards of directors a menu of steps to consider to mitigate the risk of sexual harassment.
Upcoming Events
Upcoming Events
CII News & Member Benefits
CII News & Member Benefits
Activist Fund Pushes Dual-Listed Company to Unify
Elliott Management is taking an interesting approach at BHP Billiton where the activist hedge fund is pushing the mining company to reorganize as a single company listed in Australia.
SEC Blocks Chinese-Led Takeover of Chicago Stock Exchange
The SEC announced February 15 it is blocking a consortium led by Chinese investors from acquiring the Chicago Stock Exchange (CHX), ending two years of regulatory review.
Recent Moves Saddle Proponents with Ownership Requirements
Three Maryland-based REITs - AvalonBay Communities, Equity Residential and CoreCivic - recently amended their bylaws to require that proponents of future binding proposals own at least 1% of the company's outstanding shares for one year.
CII Letter Generally Supports NYSE's Proposal on Direct Listings
CII sent a letter February 22 to the SEC generally supporting the New York Stock Exchange's proposed rule change to facilitate direct listings of companies on the exchange.
SEC Adjusts No-Action Responses on Special Meeting Proposal
The SEC staff appears to have changed its no-action approach to companies seeking to exclude shareholder proposals requesting lower thresholds for shareholders to call special meetings.
SEC Issues Guidance to Companies on Cybersecurity Disclosure
The SEC February 21 released guidance on the commission's views about public companies' legal obligations to disclose matters involving cybersecurity risks and incidents.
Large Asset Managers Strengthen Proxy Voting Guidelines
Some of the biggest investment managers will be holding U.S. boards to higher standards at annual meetings this year:
CII Letter Expresses Concern about SEC Staff’s Interpretation of Conflicting Proposals
CII sent a letter January 31 to William Hinman, director of the SEC’s Division of Corporation Finance, expressing serious concerns about a no-action decision his staff issued December 19 on a shareholder proposal filed at AES.
CII Encourages Members to Sign on to Letter Opposing Bill to Regulate Proxy Advisors
CII is urging members who are U.S.-based institutional investors and asset managers to sign onto a letter it plans to send to the chair and ranking member of the Senate Banking Committee.
SEC's Jackson Urges Exchanges to Consider Requiring Sunsets for Dual-Class Companies
In a February 15 speech in California, SEC Commissioner Robert Jackson Jr. urged U.S. stock exchanges to consider changing their standards to require listed companies with dual-class structures to sunset those structures.
CII News & Member Benefits
CII welcomes Barrick Gold Corporation, Impax Asset Management, Merck and New Mountain Capital this week as new members.
Upcoming Events
Upcoming Events
ICCR Members Concentrate on Climate Change in 2018
For the third year in a row, members of the Interfaith Center on Corporate Responsibility (ICCR) have filed more proposals on climate change than on any other topic, Julie Wokaty, ICCR's publications and website specialist, reported during a February13 ICCR proxy season preview teleconference .
AmerisourceBergen Shareholders Set to Vote on Proposals Addressing Hot Topics
In the wake of allegations that AmerisourceBergen helped fuel the nation's opioid crisis by not reporting suspicious drug orders, the company's shareholders will vote on four shareholder proposals aimed at improving the company's disclosure and governance at its March 1 annual meeting.
CII Letter Asks SEC to Reprioritize Items on Regulatory Agenda
CII sent a letter to the SEC February 12 requesting that three items listed in the commissions' recently issued semiannual agenda be elevated to a higher priority.
News from CII
News from CII
Pay Gap is Wider at Larger Companies, Equilar Finds
Compared to smaller companies, the largest U.S. public corporations pay their executives more money and their median employees less, finds a new study by Equilar.
Investor Advocates Urge Votes against CEO Pay at Most Companies
Four investor activists focused on executive compensation sent letters to institutional investors, proxy advisors and asset managers urging them to vote against say-on-pay proposals under most circumstances.
Tesla Files Definitive Proxy for Special Meeting on Musk Pay
Tesla on February 8 announced that the special shareholder meeting seeking approval for an unusual long-term compensation plan for Chairman and CEO Elon Musk will be on March 21, and it filed its definitive proxy statement.
Wynn Resigns as CEO, But Wynn Resorts Directors Still Feeling the Heat
Amid multiple allegations of sexual harassment leveled at him by Wynn Resorts employees, the company's CEO, Steve Wynn, resigned February 6. But according to reports, board members could come under pressure next because of their handling of the scandal and perceived lack of independence.
Federal Reserve Metes Out Severe Punishment to Wells Fargo Citing Faulty Governance
On February 2, the Federal Reserve Board announced that it was restricting Wells Fargo's growth until it improves its governance and risk controls, and that the bank would replacethree board members by April and a fourth by the end of the year.
Witnesses Debate Beneficial Ownership Disclosure in Senate Hearing
A panel of witnesses discussed their views on legislation pending in the Senate that seeks to combat illicit financing through the disclosure of beneficial ownership during a February 6 Senate Judiciary Committee hearing.
SEC, CFTC Chairs Tell Senate Panel More Authority, Personnel Needed to Oversee Crypto Currencies
The SEC and Commodity Futures Trading Commission (CFTC) are working to determine the gaps that exist in their oversight of crypto currencies, and once that determination is made, they may request legislative action by Congress to grant them more authority, SEC Chair Jay Clayton and CFTC Chair Christopher Giancarlo told the Senate Banking Committee February 6.
CII Backs IOSCO Guiding Principles for Audit-Related Standard Setters, With Improvements
CII sent a comment letter February 8 to the International Organization of Securities Commissions (IOSCO) in response to a consultation entitled: "Strengthening the Governance and Oversight of the International Audit-Related Standard-Setting Boards in the Public Interest."
News from CII
Advertise in the Spring Conference Program!
Teleconference Hosted by the IRRC Institute
Does CEO Pay Structure Incentivize Actions that Destroy Long-Term Value?
February 14, 10 AM ET
Webinar: Board Oversight of Climate Risk and Corporate Political Activity
February 22 from 12:30 – 1:15 PM ET
Registration Open: CII 2018 Spring Conference
Save the Date: CII in NYC
May 17 from 5:30 to 7:30 PM ET
EY Proxy Season Preview Finds New Issues Gaining Prominence with Investors
A new proxy season preview by EY finds that institutional investors’ top five priorities for 2018 are:
• Board composition, with a particular focus on enhanced diversity
• Board-level expertise that is more aligned with business goals
• Increased attention to climate risk and the environment
• Enhanced attention to talent and human capital management
• Compensation that is more aligned with performance and strategy
FSBA Report Finds Correlation between Overboarded Directors and Underperformance
In its new report, SBA Governance Brief—Time is Money, the Florida State Board of Administration (FSBA) found a correlation between corporate directors who sit on a large number of boards and lagging shareholder returns at the companies where these directors serve.
Media Coverage Propagates Worn Narratives on Proxy Advisors, Their Clients
Earlier this week an article written by Michelle Celarier for Institutional Investor and a reaction piece by Bloomberg commentator Matt Levine fueled misconceptions about proxy advisors, their influence and how institutional investors use them.
IPOs Off to Strong Start in 2018
Brazilian financial tech firm PagSeguro was the first IPO launched on U.S. markets in 2018, a year that could break records.
Governance Concerns at Wynn Resorts Predate Sexual Harassment Allegations
Before the salacious sexual harassment allegations against Wynn Resorts CEO Steve Wynn hit the headlines, the company’s corporate governance practices had come under significant scrutiny.
MSCI Proposes Reducing Index Users’ Exposure to Dual-Class Companies
MSCI on January 31 released an expanded consultation and accompanying discussion paper proposing to adjust multi-class MSCI equity index constituents based on free float and voting power.
CII Sends Letter to SEC Opposing Mandatory Arbitration
In the wake of a January 26 Bloomberg report that the SEC may require shareholders to settle disputes through arbitration, barring lawsuits, CII sent the SEC a letter objecting to any moves in this direction.
News from CII
News from CII
Anne Sheehan to Retire from CalSTRS in March
Anne Sheehan, director of corporate governance for CalSTRS, will retire on March 30 after 10 years directing the division.
Equilar, ISS, Willis Towers Watson Assess Effects of New Tax Code on Compensation
As a result of the Tax Cuts and Jobs Act that was signed into law in December, companies will no longer be able to deduct compensation in excess of $1 million paid to their top five executives beginning in the 2018 tax year
Delaware Supreme Court Declines to Adopt Chancellor’s Recommendation in Wal-Mart Case
The Delaware Supreme Court on January 25 declined to adopt a recommendation from the Delaware Chancellor that the court permit a case involving Wal-Mart (CalSTRS v. Alvarez) to proceed, notwithstanding a decision by an Arkansas court to dismiss claims arising from the same facts.
SEC Charges CPAs, PCAOB Staffers in Scheme to Interfere with Audits
Earlier this week, the SEC announced civil charges against six certified public accountants – including former staffers at the Public Company Accounting Oversight Board (PCAOB) and former senior officials at KPMG
CSX Board Will Adopt Health Disclosures Following CEO’s Death
The CSX board will require its CEO to submit the results of an annual physical examination, according to a letter obtained by the Wall Street Journal.
Tesla Proposes Aggressive Pay Plan for CEO Musk
Tesla announced January 23 what New York Times columnist Andrew Ross Sorkin suggested may be “the most radical” CEO pay plan in corporate history.
Companies Rely on Ordinary Business Arguments to Exclude CII Members’ Proposals
Amazon and Express Scripts are arguing that CII members’ proposals do not have to be included in their proxy statements because they pertain to their ordinary business operations and do not address significant policy issues.
Singapore Stock Exchange Moves to Permit Dual-Class Listings
The Singapore Stock Exchange (SGX) indicated January 19 that it will permit primary listings of weighted voting shares, as global stock exchanges continue to retreat from the one-share/one-vote principle.
CII Updates List of Dual-Class Companies
CII has updated its list of dual-class companies, which tracks U.S.-incorporated, Russell 3000 companies that have at least two outstanding classes of common stock with unequal voting rights.
CII Board Appoints Members of Advisory Councils
CII announced January 23 the 2018 members of its Corporate Governance Advisory Council and Markets Advisory Council.
FYI
Oregon Treasury Is Looking for Senior Investment Officer
News from CII
CII Posts IPO Voting Rights Tracker
Webinar: Rethinking Executive Pay Design: Part 2
Webinar: Blockchain Innovation in Action: Part 2
Teleconference: Buyer Beware of Chinese Companies
Registration Open: CII 2018 Spring Conference
Save the Date: CII in NYC
Colorado Pension Fund Sues Canadian Banks over Benchmark Manipulation
The Fire and Police Pension Association of Colorado filed a lawsuit January 12 accusing the six largest Canadian banks and three global banks of profiting from suppressing an interest rate benchmark over a seven-year period.
No-Action Decision Provides Insight into How SEC Staff is Now Interpreting Rule 14a(i)(9)
In a decision last month, the SEC's Division of Corporation Finance staff allowed AES to omit a proposal filed by John Chevedden asking the board to grant holders of 10% of the company's outstanding shares the right to call a special meeting.
Panasonic's Decision to Sign on to Japan's Stewardship Code Could Signal Major Shift
Panasonic's employee pension fund is set to become Japan's first major industrial company to sign up for Japan's stewardship code, reports The Financial Times. Although more than 200 Japanese asset managers and financial service companies have signed on, just one non-financial firm, Secom, has done so.
Citigroup Releases Data on Tiny Gender Pay Gap, Takes Steps to Close It
Citigroup, researched, reported and made plans to eliminate its miniscule gender pay gap. This follows a shareholder proposal that was filed and later withdrawn by Arjuna Capital asking the company to report on its policies and goals to reduce the gap.
BlackRock Chair Asks Companies to Take it Up a Notch
BlackRock Chairman and CEO Larry Fink on January 12 sent the CEOs of the major public companies in its massive portfolio a letter requesting that they clearly articulate their long-term strategies, discuss how they make a positive contribution to society, step up their engagement with their shareholders, commit to increasing the diversity on their boards and disclose how they are managing environmental, social and governance matters.
CII Members Offer Rundown of 2018 Proxy Season Plans During Teleconference
During a January 17 teleconference hosted by CII's Shareholder Advocacy Committee, the following CII members shared their plans for the upcoming proxy season.
CII Once Again Asks SEC to Change Provisions in Rules Governing Trading Plans
CII sent a letter January 18 to SEC Chairman Jay Clayton reiterating requests made to the commission in 2012 and 2013 to consider issuing interpretive guidance or amendments to Rule 10b5-1 trading plans.
News from CII
Shareholder Advocacy Committee's Proxy Season Preview Teleconference
eleconference: Financial Regulatory Update: Outlook for 2018
Webinar: Rethinking Executive Pay Design: Part 2
Webinar: Blockchain Innovation in Action: Part 2
Teleconference: Buyer Beware of Chinese Companies
Share Proxy Season Updates on Your Initiatives!
Registration Open: CII 2018 Spring Conference
Save the Date: CII in NYC
Two New PCAOB Members Sworn In
William Duhnke was sworn in as Public Company Accounting Oversight Board (PCAOB) chairman and Kathleen Hamm as a PCAOB board member on January 2.
SEC Calls for More Analysis on Nasdaq Proposal to Ease Listing Rules for SPACs
In lieu of approving Nasdaq's proposed relaxation of listing rules for special purpose acquisition companies (SPACs), the SEC on January 9 issued a decision allowing additional analysis and input on the topic through mid-February.
New York City Files Suit Against, and Lays out Plans to Divest from, Fossil Fuel Companies
New York City Comptroller Scott Stringer, New York City Mayor Bill de Blasio and other trustees of the city's pension funds announced January 10 their goal to divest city funds from fossil fuel reserve owners within five years.
Under Pressure, Companies Reverse Decisions to Hold Virtual-Only Annual Meetings
Two companies that had switched to virtual-only annual meetings will once again hold in-person meetings in 2018.
Much Work Went Into Convincing ExxonMobil to Begin Engaging with Shareholders
Exxon Mobil's December 20 announcement that it was dropping its long-standing policy that prohibited its independent directors from meeting with shareholders was the result of pressure applied over the past year by a number of different investor groups.
Intel CEO's Stock Sale Timing Draws Scrutiny
Less than six months after Intel learned of a security vulnerability in its chip circuitry, the company's CEO Brian Krzanich sold shares and exercised call options worth more than $20 million in what market watchers call an "unusual" and "indefensible" move.
CalSTRS, Activist Fund Team up to Press Apple to Help with Parental Oversight
In a groundbreaking move, CalSTRS and activist fund JANA Partners sent a letter January 6 to Apple asking the company to offer more choices and tools to help parents ensure that their children are using Apple products "in an optimal manner."
News from CII
Shareholder Advocacy Committee's Proxy Season Preview Teleconference
Teleconference: Financial Regulatory Update: Outlook for 2018
Webinar: Rethinking Executive Pay Design: Part 2
Webinar: Blockchain Innovation in Action: Part 2
Share Proxy Season Updates on Your Initiatives!
Save the Date: CII in NYC
CII's Accomplishments this Quarter
New Members
New Publication
Webinars and Teleconferences
Correspondence
Governance News this Quarter
News from the SEC
News from Capitol Hill
News from the Indexes
Governance News this Week
Large Majority of 2017 IPOs were One Share, One Vote
SEC Rejects Apple's No-Action Argument Based on Recent Legal Bulletin, But Others Continue to Use It
ExxonMobil Drops Policy Stifling Shareholders' Meetings with Directors
SEC Chair Clayton to Headline CII Spring Conference
SEC Chairman Jay Clayton will be the opening speaker when CII's 2018 spring conference starts on March 12.
FYI
Colorado PERA Seeks Director of Communications
News from CII
CII Writes Two Letters to SEC
Shareholder Advocacy Committee's Proxy Season Preview Teleconference
Teleconference: Financial Regulatory Update: Outlook for 2018
Webinar: Rethinking Executive Pay Design: Part 2
Webinar: Blockchain Innovation in Action: Part 2
Share Proxy Season Updates on Your Initiatives!
Save the Date: CII in NYC
Registration Open: CII 2018 Spring Conference
New Bitcoin Futures Contracts Elicit Mixed Reactions
Chicago-based futures exchanges CME Group and Cboe Global Markets launched Bitcoin futures contracts, bringing the volatile cryptocurrency to a new frontier of financial services.
CSX Chief's Death Renews Debate about Health Disclosures, Board Decision to Hire Him
The death December 16 of CSX CEO E. Hunter Harrison 10 months after he was hired amid health concerns has renewed questions about a board's obligation to disclose information about the health of the chief executive.
Post Proxy Fight, Peltz Gains Seat on P&G Board
In the wake of the most expensive proxy fight in U.S. history, the shareholder activist who launched the fight and according to the company was narrowly defeated, was appointed to the targeted company's board.
Delaware Supreme Court Reverses Decision on Appraisal Rights
The Delaware Supreme Court reversed a lower court ruling that had found the 2013 buyout of Dell was significantly underpriced.
SEC Commissioner Nominees Send Senator Their Views on Governance Topics
After receiving written responses to her questions, Sen. Tammy Baldwin (D-Wisc.) has dropped her block of the Senate's vote on the confirmation of Democrat Robert Jackson and Republican Hester Peirce to be SEC commissioners.
Hong Kong Exchange Moves to Permit Dual-Class Listings
The Hong Kong Exchange on December 15 indicated its plans to propose permitting dual-class (or "weighted voting right") listings, albeit with some limitations and safeguards "to mitigate expropriation and entrenchment risks."
Steinhoff Accounting Scandal Continues to Spiral
The accounting scandal enveloping Steinhoff International Holdings is shaping up to be an international Enron.
Investors Question Ties Between Pharma Executives' Comp and Rising Drug Prices
A coalition of investors affiliated with the Interfaith Center on Corporate Responsibility's Domestic Health Working Group submitted shareholder proposals to major pharmaceutical companies asking for information about how well executive pay incentives mitigate long-term financial risks associated with mounting concerns over the affordability of prescription drugs.
Tax Bill Eliminates UBIT, CEOs' Tax Deductions
The sweeping tax overhaul passed by Congress December 20 eliminates one tax provision that CII opposed, as well as some tax deductions for corporate executives.
Proxy Advisor Bill Fails to Garner Bipartisan Support in House
The House passed H.R. 4015, the Corporate Governance Reform and Transparency Act, on December 20 in a 238-to-182 vote.
Energy Companies Continue to Respond to 2017 Majority Votes
Occidental Petroleum is joining the list of companies issuing reports on the risks that climate change poses to their businesses.
New SEC Agenda Keeps Corporate Governance Items on Back Burner
The SEC on December 14 posted its new "Reg Flex Agenda," the first under new Chairman Jay Clayton.
FYI
CalSTRS Seeks Deputy CIO
News from CII
Letter to Hong Kong Exchange on Corporate Governance Consultation
Teleconference: Blockchain Innovation in Action
Teleconference: International Governance 2018 Planning Call
Shareholder Advocacy Committee's Proxy Season Preview Teleconference
Webinar: Rethinking Executive Pay Design: Part 2
Webinar: Blockchain Innovation in Action: Part 2
Share Proxy Season Updates on Your Initiatives!
Save the Date: CII in NYC
Save the Date for CII's 2018 Spring Conference
Pending Legislation Would Expand CFIUS's Investment Review Mandate
Last month, legislation to reform the Committee on Foreign Investment in the United States (CFIUS) was introduced in the House and Senate. The Foreign Investment Risk and Review Modernization Act (FIRRMA) reportedly has bipartisan and administration support and would mark the first changes to CFIUS in more than a decade.
New Study Tracks Recent Global Trends in Governance
A new Russell Reynolds' study tracking governance trends in the United States, the European Union, Japan, India and Brazil finds investors remain exceptionally focused on boards' quality.
PCAOB Gets a Full Revamp
The SEC on December 12 announced a completely new lineup of board members for the Public Company Accounting Oversight Board (PCAOB), including William Duhnke III, currently a senior Senate staffer, as board chairman. Duhnke, who is staff director and general counsel to the Senate Rules Committee, succeeds James Doty, who has chaired the PCOAB since 2011.
NY State Comptroller's Proposal Asks Wells Fargo for Info on Employee Incentive Pay
New York State Comptroller Thomas DiNapoli filed a proposal asking Wells Fargo to disclose more details about employee incentive pay.
Global Investors Team Up to Spark Dialogue on Board Diversity
A global coalition of institutional investors sent letters to 61 S&P 500 companies to prompt a dialogue about board diversity and effectiveness.
Climate Change Set to Dominate 2018 Proxy Season
The 2018 proxy season is shaping up to be one brimming with initiatives related to climate change.
CII Urges Members to Contact Congressional Reps, Opposing Proxy Advisors Bill
The House vote that was expected on H.R. 4015, a bill to establish a new federal regulatory scheme for proxy advisory firms, on December 14 was delayed.
CII Mourns Passing of Board Co-Chair
With great sadness, CII notes the passing on December 12 of Gregory W. Smith, CII co-chair for public pension funds and Colorado Public Employees' Retirement Association (PERA) executive director.
News form CII
Teleconference: New Petition to SEC on ESG Disclosure
Teleconference: Blockchain Innovation in Action
Shareholder Advocacy Committee's Proxy Season Preview Teleconference
Share Proxy Season Updates on Your Initiatives!
Save the Date: CII in NYC
Save the Date for CII's 2018 Spring Conference
​David Smith, Long-Time Society Leader, Passes Away
David Williamson Smith, who led the Society of Corporate Secretaries and Governance Professionals for nearly 20 years, died on December 1.
​IPO News
Spotify’s Planned Direct Listing
Suit Claiming Alibaba Defrauded Investors is Resurrected
​Investors’ Push for Board Refreshment, Diversity Starts Bearing Fruit, Spencer Stuart Index Finds
Continued pressure from investors for boards to refresh membership and increase diversity is starting to prompt progress, reports the 2017 Spencer Stuart U.S. Board Index.
CtW Investment Group Urges Amazon to Increase Diversity in its Top Ranks
The CtW Investment Group sent a letter to Amazon Chair and CEO Jeffrey Bezos November 30 asking him to “take decisive action to address the lack of diversity in its [the company’s] senior executive ranks and the shortcomings of its human capital management policies.”
Senator Blocks Confirmation of SEC Commissioners, Raises Questions about Key Issues
U.S. Sen. Tammy Baldwin (D-Wisc.) sent the two SEC commissioner nominees, Hester Peirce and Robert Jackson, letters November 29 asking for their views on key issues and warning that she will block the Senate vote on their confirmations until she receives written responses.
​SEC Investor Advisory Committee Considers Gaps in Disclosures on Dual-Class Shares
Companies should step up disclosure of information about their dual-class shares, says a subcommittee discussion draft considered by the SEC Investor Advisory Committee during its December 7 meeting.
​CII and ILPA Write to Hill Conferees on New Proposed Tax on Public Funds
CII and the Institutional Limited Partners Association (ILPA) on December 7 wrote subject some alternative investments to the unrelated business income tax (UBIT).
​CII Report Underlines Risks Associated with Convoluted Chinese Corporate Structure
A new CII report highlights the risks posed to investors by a common structure called a variable interest entity (VIE), which is employed by many Chinese companies listed on U.S. stock exchanges.
News from CII
Welcome New Members!
Teleconference: Financial Regulatory Update
Teleconference: Blockchain Innovation in Action
Shareholder Advocacy Committee's Proxy Season Preview Teleconference
CII Seeks Nominations for Advisory Councils for 2018
SEC’s IAC Set to Examine Dual-Class Shares
Included on the agenda for the SEC Investor Advisory Committee’s December 7 meeting is a discussion on dual-class structures.
​New Paper Cites Flaws in Executive Compensation at Canadian Companies, Suggests Reforms
A new paper by the Canadian Institute for Governance of Private and Public Organizations says the current standardized processes for setting executive compensation at publicly listed Canadian companies is “deeply flawed” and offers recommendations on how to improve these pay practices.
​Comments Invited on Draft Changes to Canadian Financial Institutions’ Corporate Governance Guideline
The Canadian Office of the Superintendent of Financial Institutions (OSFI) posted for public comment November 7 draft changes to its corporate governance guideline, which was last updated in 2013.
Glass Lewis Updates Policy Guidelines on Gender Diversity, Climate Change
Proxy advisor Glass Lewis just released updates to the policy guidelines that it uses when making voting recommendations for its subscribers.
​Apple Relies on New SEC Legal Bulletin to Make No-Action Arguments
Apple is using the recent SEC staff legal bulletin in its no-action request to the commission.
Bid for Uber Shares at Steep Discount, Research Questions Unicorn Valuations
SoftBank and investment firms partnering with it are seeking to buy a large stake in Uber at a price that is 30% less than what the company was valued at in the previous investment round.
​Wells Fargo Remakes Board
Amid continued criticism, the Wells Fargo board announced November 29 the addition of three new independent board members, in addition to three named earlier this year.
​Tis the Season: Equifax Tops Proponents’ Naughty List
Some CII members are making their corporate target lists and checking them twice. So far, the AFL-CIO filed two proposals at companies on its naughty list, while As You Sow, the Connecticut Retirement Plans and Trust Funds, the Rhode Island State Treasurer’s Office and the UAW Retiree Medical Benefits Trust each have submitted one to misbehaving companies.
​FYI
Congratulations!
​News from CII
CII Comments on Federal Reserve Proposal
CII Seeks Nominations for Advisory Councils for 2018
Teleconference: Has the JOBS Act Led to IPO Underpricing?
Save the Date: CII in NYC
Save the Date for CII's 2018 Spring Conference
​NYC Pension Funds Adopt Policies Outlining Requirements for External Investment Managers
The trustees of the New York City Pension Funds each have adopted a “Responsible Contractor Policy” that promotes employment practices, including fair wages and benefits, for construction workers and service industry employees.
Hong Kong Exchange Issues New Consultation Focusing on Board Independence, Diversity
The Hong Kong Stock Exchange just issued a consultation paper that proposes amending its listed companies’ corporate governance practices to add new disclosures about the nomination and election processes for independent non-executive directors (INEDs) and to elevate the importance of board diversity.
​SEC Staffer Offers Insights into Recent Legal Bulletin
A special counsel in the SEC’s Division of Corporation Finance shed some light on the intricacies of Legal Bulletin No 14I, which the commission issued November 1 to give shareholders and companies guidance on no-action requests involving Rule 14a-8(i)(7) and Rule 14a-8(i)(5).
​Investors Concerned about Rise in Dual-Class Structures, but Encouraged by Sunset Provisions
CII and many institutional investors are alarmed by the recent proliferation of dual-class companies, but are encouraged by the growth in the number of firms also adopting time-based sunset provisions that phase out this stock structure.
​House Committee Clears Proxy Advisory Bill
The House Financial Services Committee on November 15 passed H.R. 4015, the Corporate Governance Reform and Transparency Act, introduced by Rep. Sean Duffy (R-Wisc.) October 11.
​News from CII
Webinar: Shareholder’s Gold Council
Teleconference: Has the JOBS Act Led to IPO Underpricing?
In Case You Missed It: Rethinking Executive Pay Design Webinar
Save the Date: CII in NYC
Save the Date for CII's 2018 Spring Conference
​CII Seeks Nominations for Advisory Councils for 2018
CII is seeking nominations from Associate (non-voting) Members to serve on either the Corporate Governance Advisory Council or the Markets Advisory Council for 2018. T
​Ackman’s Pershing Square Fails to Win Seats on ADP Board
Fewer than 25% of the votes cast at ADP’s November 7 annual meeting backed dissident candidates nominated by Pershing Square Capital Management.
​Cardinal Health Splits Chair, CEO Roles
Just two days shy of its November 8 annual meeting, Cardinal Health announced that it is splitting the roles of chair and CEO.
SINA Shows Risk to Investors of Blank Check Preferred Stock
SINA, the $7 billion Nasdaq-listed Chinese internet company, on November 7 issued new shares with super-voting rights to an entity controlled by Charles Chao, SINA’s chairman and CEO.
​MSCI Temporarily Bars New Multi-Class Companies from Key Indexes
Index provider MSCI announced November 2 that it will temporarily exclude new multi-class companies with unequal voting rights from two of its benchmark indexes.
​House Tax Bill Could Revamp Executive Compensation
The House tax bill, H.R. 1, the Tax Cuts and Jobs Act, unveiled by Republicans last week contains provisions that would revamp the tax treatment of many common forms of executive compensation and could radically alter the ways corporate executives are paid.
​SEC Chair Clayton Urges Review of Proxy Voting System
In a November 8 speech, SEC Chairman Jay Clayton called for a review of the proxy system, including shareholder proposals and the relatively low participation by retail investors, as part of the SEC’s long-term agenda.
Paper Rebuts Chamber’s Push for Rule 14a-8 Revamp
A new paper written by Ceres, the Interfaith Center on Corporate Responsibility and U.S. SIF: the Forum for Sustainable and Responsible Investment refutes the U.S Chamber of Commerce’s proposals to revamp Rule 14a-8, the shareholder proposal rule.
Co-Signed CII Letter Urges Legislators to Oppose Proxy Advisory Bills
CII and a group of CII members, other investors and investor organizations sent a letter November 9 to the leadership and members of the House Financial Services Committee strongly opposing legislation that would impose stringent regulations on proxy advisory firms.
News from CII
WE NEED YOUR FEEDBACK ON THIS NEWSLETTER!
CII to Seek Nominations for Advisory Councils for 2018
Letter to SEC on SPACs
In Case You Missed It: Webinar on Pershing Square Speaks—William Ackman, Veronica Hagen and V. Paul Unruh Discuss Their Bid for Board Seats at ADP
Teleconference: Revising Best Practices for Proxy Advisors
Webinar: Rethinking Executive Pay Design
Teleconference: Financial Regulatory Update with Jeff Mahoney and Professor Wayne Landsman
Save the Date for CII’s 2018 Spring Conference
​ASCI Report Advocates Right to Bring Shareholder Resolutions in Australia
The Australian Council of Superannuation Investors (ACSI) published a report this week highlighting investors’ limitations under Australia’s system to introduce shareholder resolutions on environmental, social and governance (ESG) issues.
​Panel Encourages Directors to Dive Deeper into Disclosures
The board plays an indispensable top-down role in setting the tone of a company’s disclosure and encouraging a culture of transparency, agreed panelists participating in an October 24 event hosted by the Center for Audit Quality and the Weinberg Center for Corporate Governance at the University of Delaware.
​Court Denies CII’s Motion to File Brief
The Delaware Chancery Court on October 23 denied CII’s motion to file a brief in in California State Teachers’ Retirement System v. Alvarez, No. 295, 2016 in the Delaware Supreme Court.
​Teamsters Urge Cardinal Health Shareholders to Support Independent Board Leadership
Cardinal Health’s current board leadership structure has proven inadequate in tackling the company’s decade-long role in fueling the opioid crisis, says a letter sent by International Brotherhood of Teamsters General Secretary-Treasurer to the pharmaceutical wholesaler’s shareholders.
SEC Nominees Discuss Key Topics at Senate Banking Committee Hearing
The nominees for the two vacant seats on the SEC shared views on the shareholder proposal rule, unimplemented Dodd-Frank Act provisions and cybersecurity during an October 24 Senate Banking Committee hearing.
​MiFID II to Shine Light on Research Costs and Trade Executions in Europe
MiFID II, a European regulation that becomes effective in January, aims to reduce conflicts of interest between brokers and clients, opacity in research pricing and the potential for overconsumption of research services.
​Time-Based Sunsets for Dual-Class IPOs Gradually Gain Traction
Last week, Stitch Fix announced a dual-class IPO that provides for conversion to one-share, one-vote in 10 years.
​SEC Approves PCAOB’s New Auditor Reporting Standard
The SEC on October 23 approved enhancing the auditor’s report to shareholders.
News from CII
Teleconference: What is MiFID II and what are the potential implications for U.S. investors?
Teleconference: Revising Best Practices for Proxy Advisors
Webinar: Rethinking Executive Pay Design
Save the Date for CII’s 2018 Spring Conference
​CII’s Accomplishments this Quarter
Governance News This Quarter
Regulatory Agenda
Interpretive Guidance on Pay Ratio Disclosure
Proposal Eliminating Examples of Risk Factors
Governance News This Week
Three entrepreneurs and three central bank officials examined the future of fintech innovation and regulatory challenges during an October 12 panel discussion at the International Monetary Fund (IMF).
News from CII
CII Weighs in on Proposal Affecting Sovereign-Controlled Companies
Teleconference: Financial Regulatory Update with Jeff Mahoney and the Treasury Department's Craig Phillips
Teleconference: What is MiFID II and what are the potential implications for U.S. investors?
Teleconference: Revising Best Practices for Proxy Advisors
Webinar: Rethinking Executive Pay Design
Save the Date for CII’s 2018 Spring Conference
​Steering Committee Seeks Feedback on Effectiveness of Principles
A steering group launched a consultation October 11 to seek views from investors and companies on whether the Best Practice Principles for Shareholder Voting Research and Analysis have been effective in ensuring the integrity and efficiency of the services provided by proxy advisors.
​Survey Tracks How Asset Managers Voted on Climate Risk Proposals in 2017
The 50/50 Climate Project published its annual report containing results on how asset managers voted on climate risk disclosure shareholder resolutions and management proposals during the 2017 proxy season.
​Preliminary Results Show Trian’s Peltz Did Not Gain a Seat on P&G Board
Procter and Gamble announced that preliminary voting results show all of its directors were re-elected and Trian Partners CEO Nelson Peltz did not win a seat on the company’s board at the October 10 annual meeting.
Treasury Department Makes Recommendations on Financial Regulatory Reform
The Treasury Department on October 6 issued a report, “A Financial System That Creates Economic Opportunities” based on “Core Principles” set forth in an executive order by President Trump in February.
​SEC Proposes to Eliminate Examples of Risk Factors
Despite calls from CalPERS and other commenters to expand or revise the disclosure of companies’ examples of risk factors, the SEC on October 11 proposed eliminating examples of these factors from the commission’s rules.
​Investor Coalition Discusses Rule 14a-8 with SEC Chairman
CII General Counsel Jeff Mahoney led a coalition of CII members and other investor groups to the SEC on October 11 for a discussion with Chairman Jay Clayton and Director of the Division for Corporation Finance William Hinman about the shareholder proposal rule, Rule 14a-8.
CII Urges SEC to Explore Human Capital Management Disclosure
CII, in an October 10 letter to SEC Chairman Jay Clayton, urged the commission to consider the need for enhanced corporate disclosure of human capital management.
News from CII
Welcome New Member
Teleconference: Financial Regulatory Update with Jeff Mahoney
Teleconference: Revising Best Practices for Proxy Advisors
​CFIUS Steps Up its Scrutiny of Foreign FDI
The Committee on Foreign Investment in the United States (CFIUS) is an interagency committee charged with reviewing inbound M&A to safeguard national security while promoting foreign investment.
​Next Week’s SEC Meeting Will Include Consideration of Reg S-K
At an October 11 meeting at SEC headquarters in Washington, D.C., the commission will consider whether to propose amendments based on the recommendations in the staff’s Report on Modernization and Simplification of Regulation S-K .
​SEC Investor Advisory Committee to Discuss Blockchain Technology at October 12 Meeting
Blockchain technology and its implications for securities markets will be the first topic of discussion when the SEC’s Investor Advisory Committee (IAC) meets on October 12 in Washington, D.C.
​Two Canadian Banks Petition to Adopt U.S.-Style Proxy Access
A statute governing banks in Canada is obstructing two prominent Canadian banks from adopting U.S.-style proxy access, but the existing law may actually be more shareholder-friendly.
​New MSCI Study Tracks Misalignment between Realized Pay and Long-Term Performance
CEOs’ realized pay is out of whack with their companies’ long-term performance, finds a new study by Rick Bennett of MSCI.
NACD Focuses on Corporate Culture
A National Association of Corporate Directors blue-ribbon panel on October 2 recommended 10 steps to strengthen corporate culture.
​In Testimony on Capitol Hill, Wells Fargo CEO Outlines Changes Since Scandal
In his testimony before the Senate Banking Committee on October 3, Wells Fargo CEO Timothy Sloan apologized for letting down the bank’s customers and explained the changes that the company has put in place in the past year.
​Equifax CEO Testifies before Multiple Committees about Data Breach, Stock Sales, Pay
The former Equifax CEO Richard Smith was grilled by three Congressional committees this week on the company’s massive data breach, the timing of Equifax executives’ stock sales and the compensation he received despite the massive lapse in cybersecurity at the company.
​Uber Board Reportedly Revokes Super-Voting Rights and Makes Other Governance Changes
Uber is the latest poster child for the dangers inherent in dual-class corporate capital structures with unequal voting rights.
​FYI
Moody’s Seeks Corporate Governance Specialist
​News from CII
CII Letter Urges SEC Not to Grant No-Action Relief from MiFIDII
​Studies Examine Successful Engagement
Two studies commissioned by PRI find that engagement benefits both the investors and the companies involved.
Report, Benchmarking Initiative Focus on Sustainability
Sustainability continues to be a major focus for investors. A new report from Ceres looks at the attributes boards need to have, as well as the actions they need to take, to adequately consider sustainability in their decision making. In addition, a group of diverse interests is exploring the idea of creating corporate sustainability benchmarks.
​Annual ISS Survey Results Uncover Investors’, Corporates’ Views on Hot Topics
Results from ISS’s annual global benchmark voting policy survey reveal that investors favor a ban on, or sunsetting of, unequal voting rights and view critically boards without any female directors.
​Gillibrand, Durbin Introduce Bill to Amend Tax Code to Cap Executive Comp
Senators Kirsten Gillibrand (D-N.Y.) and Dick Durbin (D-Ill.) on September 20 introduced S. 1843, the Stop CEO Excessive Pay Act, which would close the tax loophole that allows companies to deduct part of the amount they spend on executive compensation.
​Clayton Discusses Shareholder Proposals, Corporate Disclosure on Capitol Hill
In testimony before the Senate Banking Committee September 26, SEC Chairman Jay Clayton said the commission needs to examine continually the balance between shareholder access to management and time spent by management responding to shareholders.
​New Blank Check Company Offers Alternative to Traditional IPOs
Venture capital firm Social Capital plans to appeal to private tech unicorns (start-ups valued at more than $1 billion) to go public through a blank check vehicle, as an alternative to the usual IPO approach.
Hong Kong Exchange Curbs SFC’s Oversight of Listing Standards
The Hong Kong Exchange just announced in a ‘joint consultation conclusion’ that it does not plan to enhance the decision-making ability or the governance structure of Hong Kong’s Securities and Futures Commission (SFC) over listing standards in any meaningful way.
​PCAOB Seeks Additional Comments on Lead Auditor Proposal
The PCAOB on September 26 issued a supplemental request for comments on its proposal to set new requirements on the lead auditor’s use of other auditors.
Facebook Drops Plan for Non-Voting Shares
Facebook announced September 22 that it is dropping its plan to issue non-voting shares.
​P&G Makes Case for Forging Ahead on Transformative Plan Without Trian
During a September 27 CII teleconference, Procter & Gamble directors and management laid out their case against giving a board seat to Trian Partners CEO Nelson Peltz, who has launched a high profile proxy battle at the corporate giant.
FYI
News from CII
CII Research and Education Fund Receives Two Cy Pres Awards
Teleconference: A Preview of the Supreme Court's 2018 Term
Procter and Gamble Speaks: P&G Leadership on the Company’s Progress and the Proxy Contest with Trian Fund Management
​Recap of CII’s 2017 Winter Meeting
Approximately 500 CII members gathered in San Diego, September 13-15, for the Council’s spring meeting, which featured a compelling lineup of speakers who discussed topics ranging from the SEC’s regulatory agenda to investors’ actions addressing the opioid crisis.
​Chamber Group Evaluates 2017 Proxy Season and Looks to Future
Speakers discussed the data and trends that emerged from the 2017 proxy season and made some predictions about what the 2018 season may hold during a September 19 event hosted by the Chamber of Commerce’s Center for Capital Markets Competitiveness.
SEC Releases Guidance for Companies on Complying with Pay Ratio Disclosure Requirements
The SEC September 21 issued interpretive guidance to help companies comply with the pay ratio disclosure requirement in the Dodd-Frank Act.
​Soft Dollars: Pending EU Regulation Re-Opens Public Debate in United States Too
A soon-to-be-implemented European regulation on soft dollar payments for research clashes with the existing U.S. safe harbor, posing a quandary for the SEC and asset managers.
News from CII
CII is delighted to welcome six new members.
Letter to PCAOB on Estimates and Specialists Proposals
Teleconference: No-Vote Stock and Shareowner Litigation
Teleconference: Financial Regulatory Updates
Teleconference: A Preview of the Supreme Court's 2018 Term
​Samsung’s Adoption of New Governance Disclosure System Could Signal Major Change
Samsung, the largest company in South Korea, is voluntarily adopting a new corporate governance disclosure system designed and launched by the Korea Exchange in March.
​Critics Say New U.K Reforms Scale Back Original Promises
The guidelines on executive pay and worker representation that the U.K. government unveiled August 29 are coming under fire for not going far enough.
CII Letter to SEC Challenges Request for Reforms to Shareholder Proposal Rules
The Council delivered a letter August 21 to the SEC opposing a July 17 request for rulemaking to amend Rule 14a-8 that was submitted by the Corporate Governance Coalition for Investor Value.
FYI
Investors Invited to Weigh In on Proxy Statements
News from CII
CII Outlines Views on Numerous Issues in Letter to U.S. Treasury
Stay On Top of Comment Opportunities Through NEW Free Tracker
Teleconference: No-Vote Stock and Shareowner Litigation
Teleconference: Financial Regulatory Updates
Teleconference: A Preview of the Supreme Court's 2018 Term
Register for CII's Fall Conference
​Activist Investors Make Boards Whiter and More Male, ISS Study Shows
Hedge fund activism at U.S. companies results in board members who are younger and more independent—but less diverse, according to a new ISS report, “The Impact of Shareholder Activism on Board Refreshment Trends at S&P 1500 Firms.”
​Eye on International: Malaysian Exchange “Presently” Not Considering Dual Class
Shortly after a media report noting that Bursa Malaysia was launching a study to examine the possibility of allowing dual-class listings raised concern among investors, the Asian exchange issued a statement clarifying that it “has no plan to facilitate listing of dual class shares.”
​Pension Funds Sue on Share Lending Market
Three pension funds (two of which are CII members) have sued leading prime brokerage banks alleging conspiracy to stifle competition in the stock lending market. The plaintiffs are the Iowa Public Employees’ Retirement System and the Sonoma County Employees’ Retirement Association (both CII members) and the Orange County Employees Retirement System.
Four Reasons Not to Miss the 2017 Fall CII Meeting
Dynamic Speaker Lineup, Exciting Venue
Attendance
Sharing and Connecting with the CII Network
Educational Opportunities
​News from CII
CII Seeks Research Analyst
Teleconference: Integrated Reporting: Is it Time to Make it Mainstreamed in the U.S.?
Teleconference: Financial Regulatory Updates
Registration for Fall Conference Open
Fall Conference Update: Conference Hotel is Sold Out
​Proposal to Declassify Filed at Vista Outdoor Receives Almost Unanimous Support
A proposal filed by the Connecticut Retirement Plans and Trust Fund, which asks Vista Outdoor, a gun and ammunition manufacturer, to declassify its board, received an impressive 94% of the votes cast at the company’s August 1 annual meeting.
​SEC Says Cardinal Health Can Omit Proposal on Use of Drugs for Executions
Last week, the SEC granted no-action relief to Cardinal Health, giving the company permission to omit a proposal asking the pharmaceutical giant to issue a report describing the controlled distribution systems it implements on behalf of manufacturers to prevent the use of restricted medicines in prisons for executions.
Eye on International: HK Exchange Revisits Permitting Multi-Class Structures
Investors and other market participants have until August 18 to express their views to the Hong Kong Exchange on a preliminary “straw man” proposal under which the exchange would create a third trading board that would list companies with “non-standard governance features,” including multi-class stock structures.
​Teamsters Urge Senator Not to Introduce Bill on Regulating Proxy Advisors
International Brotherhood of Teamsters General President James Hoffa sent a letter to Sen. Dean Heller (R-Nev.) August 3 urging him not to introduce legislation that would establish a new regulatory regime for proxy advisors.
​CII Sends Letter Supporting PCAOB’s Proposed Rules on Auditor’s Report, Chamber Pushes Back
CII sent a letter to the SEC August 8 urging the commission to promptly approve the PCAOB’s proposed rules on the auditor’s report on audits of financial statements when the auditor expresses an unqualified opinion.
​News from CII
Welcome New Member!
New Podcast: No-Vote Shares and the Business Judgment Rule
CII Seeks Research Analyst
Teleconference: Integrated Reporting: Is it Time to Make it Mainstreamed in the U.S.?
Teleconference: Financial Regulatory Updates
Registration for Fall Conference Open
Fall Conference Update: Conference Hotel is Sold Out
​CII Queries Netflix on Majority-Supported Shareholder Proposals in Its Queue
CII sent a letter July 28 to Jay Hoag, lead independent director at Netflix, asking how the company’s board plans to respond to the multiple shareowner resolutions that received majority support at the company’s June 6 annual meeting.
​Big Push by Investors to Ramp Up Board Diversity Proved Effective this Proxy Season
This past proxy season, the nation’s top money managers and institutional investors made major inroads into increasing diversity on corporate boards.
​Possibility of SEC OKing Mandatory Arbitration Clauses for IPOs Rankles Investors
SEC Commissioner Michael Piwowar’s recent suggestion that the SEC should allow IPOs to include mandatory arbitration provisions in their governing documents has touched off a wave of concern among investors.
Updated CII Publication Examines New Proxy Access Provisions
Proxy access was just beginning to take off in 2015 when CII published "Proxy Access: Best Practices," an overview of the Council's position on common access bylaw provisions.
​CII Welcomes S&P Dow Jones’ Move to Ban New Multi-Class Listings from Key Indexes
CII welcomes S&P Dow Jones’ decision to ban new multi-class companies from its key U.S. stock indexes. The move means that Snap Inc. and other new public companies with share classes that have differential or no voting rights for certain investors will be barred from inclusion in the S&P 500, S&P MidCap 400 and S&P SmallCap 600.
FYI
EY Disruption Study: Institutional Investor Interview Opportunity
Investor Survey on Corporate Governance in China
​News from CII
CII Seeks Research Analyst
Registration for Fall Conference Open
Fall Conference Update: Conference Hotel is Sold Out
​New SEC Chair Invites Input on Commission Agenda
SEC Chairman Jay Clayton emphasized his eagerness to engage with stakeholders as he formulates an agenda for the agency and the need for the SEC to view all regulations through the lense of ‘Mr. and Mrs. 401K’ during a July 26 discussion hosted by the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness (CCMC).
​SEC’s Recent Regulatory Agenda Places Number of Key Governance Reforms on Hold
A number of regulatory reforms that CII has long supported are missing from the list of rules in the active “Proposed Rule Stage” in the SEC’s regulatory agenda released by the Office of Management and Budget July 20.
U.S. Chamber of Commerce Proposes Tight Restrictions on Shareholder Proposals
The U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness (CCMC) on July 26 published recommendations for overhauling the shareholder proposal system.
​FTSE Russell Sets Limit on Percentage of Shares with No Votes for Public Shareholders
CII applauds FTSE Russell’s July 26 preliminary decision to bar Snap and companies with virtually zero voting rights in the hands of public shareholders from inclusion in the Russell 3000 and other FTSE Russell indexes.
​McKesson Shareholders Reject Say on Pay, Company Agrees to Separate CEO, Chair Roles
A majority of McKesson shareholders voted to reject the company’s say-on-pay proposal at the company’s July 26 annual meeting, and responding to pressure from shareholders, the company agreed to separate the roles of chair and CEO when the current CEO departs.
​FYI
AllianceBernstein Seeks a Proxy Voting and ESG Associate
News from CII
Podcast on CII’s Majority Voting Campaign
Teleconference: Shareholders’ Ability to Amend Bylaws: Understanding the Value and Addressing Limitations
Register for CII’s Fall Conference
​Connecticut Fund Presses Vista Outdoor to Declassify its Board
The Connecticut Retirement Plans and Trust Funds filed a shareholder proposal at Vista Outdoor urging the company to declassify its board and require all directors to stand for election annually.
Proxy Season 2017 Shareholder Proposal and Engagement Wrap Up
Investors apparently filed fewer proposals at Russell 3000 companies in the first seven months of 2017 than they did in 2016, according to analysis by CII.
​House Appropriations Bill Takes Aim at Universal Proxies
On July 13, the House Appropriations Committee passed a spending bill that would prohibit the SEC from acting on its proposal to require public companies to use universal ballots for contested elections.
President Nominates Hester Peirce to be SEC Commissioner
On July 19, President Trump nominated Hester Peirce, a critic of Obama-era initiatives to tighten financial market regulation, to fill a vacant Republican seat on the SEC.
​News from CII
In Case You Missed It: Teleconference Featuring a Proxy Season Wrap Up
Teleconference: Financial Regulatory Updates
Registration for Fall Conference Open
​CII’s Accomplishments this Quarter
Initiative on Dual-Class and No-Vote Shares
NEW Member Toolkit
CII’s May 24 NYC Panel Discussion Honoring Ira Millstein
New Members
Correspondence
New Publications
Podcasts
Teleconferences and Webinars
​Governance News This Quarter
News from Capitol Hill
Spending Bill
News from the PCAOB
News from the Supreme Court
Governance News Now
Investors Petition SEC for Better Disclosure of Human Capital Management
Clayton’s Remarks Point to Support for Scaling Back Disclosure Rules
FTSE Russell CEO Says Index May Restrict Inclusion of Firms with Unequal Voting Rights
Teamsters Urge McKesson Shareholders to Vote Against Pay and For Independent Board Chair
CII Members Appointed to ICGN Board
News from CII
Teleconference: Proxy Season Wrap Up
CII Opens Registration for Fall Conference
Correction
n article in last week’s Governance Alert incorrectly identified as CalPERS the proponent of a board diversity proposal that passed with an impressive vote of 85% of the votes cast.
​100+ Business Leaders Back Recommendations of Task Force on Climate-Related Financial Disclosures
Heads of more than 100 companies and institutional investors committed to support the final recommendations published today of the Financial Stability Board's Task Force on Climate-related Financial Disclosures (TCFD).
​Addition of Chinese Stocks to Index Puts Focus on Improving Governance
MSCI’s June 20 announcement that it will add domestic Chinese stocks to its emerging markets benchmark could compel international money managers to pay more attention to corporate governance in China and demand improvements.
​Supreme Court Ruling Sets Tight Limits on Time Period for Filing Class-Action Suits
In a June 26 Supreme Court ruling on California Public Employees’ Retirement System v. ANZ Securities, the court said investors can no longer rely on class actions to hold their individual claims beyond the three-year period after a security was offered to the public.
​Treasury Department Invites Suggestions for Upcoming Report on Capital Markets
President Trump issued an executive order in February instructing the Treasury Secretary to report to the president on the extent to which the existing financial regulatory system promotes the administration’s “Core Principles” of financial regulation.
​Support Levels for S&P 500 Directors Dropped in 2017
Significantly more S&P 500 directors received lower levels of shareholder support in 2017 than in 2016, reveals data from ISS.
​CII Members Demand Major Governance Reforms at Mylan Following Vote
CalSTRS and the Comptrollers of both New York City and New York State sent a strongly worded letter June 28 to Mylan Laboratories’ independent directors urging them to take swift action in response to the failure of both the say-on-pay proposal and the chair of the compensation committee to receive majority shareholder support.
​New HKEX Board Could Allow Dual-Class Listings
The Hong Kong Exchange (HKEX) June 16 launched a consultation on whether it should create a new board with a softer stance on governance issues such as the inclusion of dual-class shares.
​IAC Nixes Plan for Non-Voting Shares after CalPERS Sues
IAC Interactive on June 21 decided not to pursue its plan to create a new class of non-voting shares.
​CII Letter to Nasdaq Asks for More Shareholder Review of Private Placements
CII submitted a letter June 26 to the Nasdaq Listing Council responding to a June 14 proposal to amend the exchange’s listing rules.
FYI
Ceres Seeks Candidates for Two Positions
News from CII
?Teleconference: Financial Regulatory Updates
Teleconference: Proxy Season Wrap Up
In Case You Missed It: Webinar on Benefit Corporations
CII's Online Director of Member Proxy Voting Guidelines/Histories Updated
CII Opens Registration for Fall Conference
Upcoming Meetings that Feature Members' Proposals
?Throughout the 2017 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
Meeting Follow Ups
Noteworthy governance news from the 2017 annual meetings at Hospitality Properties Trust, Mylan Laboratories, Abercrombie & Fitch and Hudson Pacific Properties
Anne Sheehan Elected to Chair SEC's Investor Advisory Committee

CalSTRS Director of Corporate Governance Anne Sheehan, who served as CII chair in 2012 and 2013, was elected chairman of the SEC's Investor Advisory Committee (IAC) on June 22.
Update to Japanese Stewardship Code Spotlights Leverage of Asset Owners
?Japan's Financial Services agency recently revised the comply-or-explain Japanese Stewardship Code, which was first adopted in 2014.
Dutch Government to Debate Foreign Anti-Takeover Rules
The Dutch parliament on June 28 will debate proposals to curb takeover bids by foreign companies. The Netherlands' government is urging parliament to consider requiring a one-year "time out" for foreign companies that submit hostile bids for Dutch companies.
CII Continues to Advocate for Good Governance Practices in Canada
CII sent a letter June 19 to the Canadian Minister of Innovation, Science and Economic Development, supporting amendments to the Canada Business Corporations Act (CBCA) in Bill C-25 that would add majority voting for directors as well as the annual and individual election of directors.
CII Continues to Advocate for Good Governance Practices in Canada
?CII sent a letter June 19 to the Canadian Minister of Innovation, Science and Economic Development, supporting amendments to the Canada Business Corporations Act (CBCA) in Bill C-25 that would add majority voting for directors as well as the annual and individual election of directors.
Resubmission Thresholds Pique SEC Interest at 14a-8 Stakeholder Meeting
At a June 16 SEC roundtable, commission staff solicited views from investor and company representatives on how resubmission requirements under Rule 14a-8 (i)(12) operate in practice.
CII Asks Blue Apron to Ditch Triple-Class Share Structure
CII urged Blue Apron Holdings not to issue shares that give investors no voting rights, and to adopt a single class of shares with equal voting rights.
​FYI
Minnesota Teachers Retirement Association Seeks Executive Director
​News from CII
Teleconference on Benefit Corporations: Governance and Shareholder Rights
Teleconference: Financial Regulatory Updates
Proxy Season Wrap Up Teleconference
Registration Now Open for CII Fall 2017 Conference
​Upcoming Meetings that Feature Members’ Proposals
Throughout the 2017 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
​SEC’s Investor Advisory Committee Set to Discuss IPOs, CHOICE Act Provisions
The June 22 meeting of the Investor Advisory Committee will include discussions on “Capital Formation, Smaller Companies, and the Declining Number of Initial Public Offerings” and on certain provisions of the Financial CHOICE Act of 2017 relating to the SEC.
​BlackRock Sets Important Precedent in Reason for Vote against ExxonMobil Directors
In a groundbreaking move, BlackRock put out a comment that indicates the money manager voted against ExxonMobil’s lead director and governance committee chair, and explains that a key reason for its opposition was the directors’ refusal to meet with shareholders.
​Forest City Shareholders Approve Dual-Class Collapse
On June 9, shareholders of Forest City Realty Trust voted overwhelmingly to eliminate the trust’s dual-class structure, which had given a Ratner family partnership known as RMS the right to separately elect up to 75 percent of the board and 10 votes per share on other matters.
​FTSE Russell Accepting Input on Voting Rights Through June 16
Investors have until the end of day tomorrow, barring a last-minute extension, to participate in FTSE Russell’s consultation on whether and how to incorporate voting rights into index-eligibility criteria.
​At Nabors Industries, Sixth Time is the Charm for Proxy Access
Immediately following Nabors Industries June 6 annual meeting, at which a majority of shareholders voted for a proxy access proposal for the sixth year running, the company’s board announced that it adopted an access policy.
​Stand-Alone Bills on Investment Advisors and Proxy Advisors Could be Forthcoming
The Investment Advisor Modernization Act, to which CII has expressed opposition, could progress in Congress, warned Christopher Hayes, director of industry affairs for the Institutional Limited Partners Association, during a June 8 CII financial regulatory update teleconference.
While Larger Companies Push to Declassify, Smaller Firms Struggle to Keep Up
New analysis from CII shows that while S&P 500 companies are surging ahead and declassifying their boards, smaller firms are dragging their feet on board declassification.
​News from CII
In Case You Missed It: Webinar: Proxy Season Preview for India
Teleconference on Benefit Corporations: Governance and Shareholder Rights
Teleconference: Financial Regulatory Updates
Save the Date: CII Fall 2017 Conference
Upcoming Meetings that Feature Members’ Proposals
Throughout the 2017 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
​Meeting Follow Ups
Updates on some of the most recent hot meetings in the 2017 proxy season.
​Lawmakers’ Letter to Clayton Calls for Improved Disclosure on Board Diversity
Reps. Carolyn Maloney (D-N.Y.) and Donald Beyer (D-Va.) sent a letter to SEC Chairman Jay Clayton May 30 asking him to work on implementing former SEC Chair Mary Jo White’s plans to step up the SEC’s proxy disclosure rules on diversity of board nominees.
​FBI Pick Wray Has Deep Background in Corporate Scandal Investigations
Trump FBI nominee Christopher Wray has deep experience in white collar crime and corporate scandals, both in defense and prosecution.
​LSE Considers Bending Rules for Massive IPO as Saudi Aramco Decision Nears
Media reports indicate that the London Stock Exchange (LSE) may bend its rules to enable Saudi Aramco to gain a “Premium Listing” without meeting that segment’s 25% public float requirement.
​Interest in Dual-Class Structures Continues to Grow, Much to Investors’ Dismay
Recent news points to a troubling trend toward the spread of dual-class stock.
​Mylan Board Attempts to Intercept ISS Voting Recommendations
Four nonexecutive directors at Mylan Laboratories, which has come under heavy fire recently for its compensation practices, sent a June 6 letter to Institutional Shareholder Services (ISS), indicating that it was denied a request to review the proxy advisor’s voting recommendations before they are made available to ISS subscribers.
​CII, State Treasurers and Comptrollers Endorse Right to File Shareholder Proposals
In a joint statement issued June 5, CII, eight state treasurers and five state comptrollers, including New York State Comptroller Thomas DiNapoli and New York City Comptroller Scott Stringer, said that the right to file shareholder proposals at companies in their investment portfolios is a fundamental right of shareowners.
​CII Letter Recommends Changes to Shareholder Meeting Practices
CII sent a letter June 8 to members of a key stakeholder committee focused on developing a new set of best practices for annual shareholder meetings.
House Passes Financial CHOICE Act with Troublesome Provisions
As expected, the U.S. House of Representatives on June 8 approved the Financial CHOICE Act in a largely party-line vote of 233-186, with no Democratic support and one Republican dissenter.
CII Executive Director’s Letter in WSJ Asserts Red Tape is Not to Blame for Drop in IPOs
A letter to the editor penned by CII Executive Director Ken Bertsch and published in the June 1 Wall Street Journal refutes an argument made in a previous Journal OpEd that a decline in IPOs is related to overregulation, shareholder proposals and pressure to eliminate dual-class stock.
Exxon Shareholders Approve Climate Change Proposal by Large Margin
ExxonMobil shareholders on May 31 cast 62% of votes for a shareholder proposal from dozens of proponents led by the New York State Comptroller on behalf of the Common Retirement Fund asking the company to publish an annual climate change risk assessment.
PCAOB Adopts New Standard for Improved Auditors’ Report
The PCAOB on June 1 adopted a new standard for the auditor’s report to investors, after more than six years of policy development.
FTSE Russell Opens Consultation on Non-Voting Shares
CII encourages members to submit comments in response to a public consultation that FTSE Russell has opened on whether non-voting share classes should be included in its indexes.
Investors Oppose Directors at Mylan Laboratories
New York City pension funds, CalSTRS, the New York State Comptroller and Dutch pension giant PGGM are asking shareholders to oppose six incumbent directors and the say-on-pay proposal at Mylan Laboratories’ June 22 annual meeting.
CSX Shareholders to Vote on Dissident’s Reimbursement Arrangement with New CEO
CSX shareholders are set to vote June 5 on a proposal to reimburse a dissident group that paid a fee to ensure that former Canadian Pacific CEO Hunter Harrison would move to become CEO of CSX.
GM Shareholders Set to Vote on Dissident’s Slate, Proposal to Split Stock
General Motors shareholders will vote June 6 on three dissident candidates nominated by Greenlight Capital along with a shareholder proposal filed by the activist fund, which is a 5 percent shareholder in the company.
Forest City Seeks to End Dual-class Share Structure
In a rare reversal, Forest City Realty Trust is seeking shareholder approval at its June 9 annual meeting to amend its charter to convert its dual-class structure into a single class of common stock with equal voting rights.
Management Nominees Re-Elected at Taubman Despite Governance Concerns
A proxy battle at Taubman Centers ended June 1 with all of management’s candidates being re-elected.
Upcoming Meetings that Feature Members’ Proposals
Throughout the 2017 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
News from CII
Deadline for Member-Hosted Meetings Extended
Webinar: Proxy Season Preview for India
Teleconference: Financial Regulatory Updates
Teleconference on Benefit Corporations: Governance and Shareholder Rights
Save the Date: CII Fall 2017 Conference
​CII’s NYC Panel Discussion Honoring Ira Millstein Explored Board Dynamics
A panel led by Ira Millstein discussed the intricacies of quality board leadership at a May 24 event hosted by CII at the Time Warner Center in New York City.
​New Podcast Offers Insights into CII Study on Multi-Class Stock
Does multi-class equity really help increase value? CII staff has recorded a podcast explaining the findings and methods of CII's new report that finds no meaningful relationship between multi-class common stock with differential voting rights and long-term value as measured by return on invested capital.
​Portnoy REITs Continue to Ignore Will of Shareholders
REITs affiliated with the Portnoy family, notorious for their unsavory governance practices, are living up to their reputation these days. Recently, three Portnoy REITS ignored numerous clear messages from shareholders and adopted contradictory governance practices.
Data Shows Dual-Class IPOs are More Frequent, but Not Booming
Investors often hear that dual-class initial public offerings (IPOs) are booming, proving that market participants are eager to invest in companies with such controlled structures. However, a CII analysis of Dealogic data shows that the number of dual-class IPOs is not exploding, but instead has risen only slightly from 2010 to 2016.
​So Far, U.S. Say-on-Pay Votes are Up in 2017
The current Say on Pay failure rate of 0.6% is the lowest since these votes were required in 2011, Semler Brossy reported May 24.
​New Proposal on Common Ownership Registers Almost 5% at Twitter
An unusual proposal that came to a vote at Twitter’s May 22 annual meeting managed to eek out the support of 4.7% of the votes cast.
​Upcoming Meetings that Feature Members’ Proposals
Throughout the 2017 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
​News from CII
Webinar: Proxy Season Preview for India
Teleconference: Financial Regulatory Updates
Save the Date: CII Fall 2017 Conference
FYI
?May 24 Webinar on Large Data Breaches
News from CII
Teleconference: Financial Regulatory Updates
CII Comes to NYC: Honoring Ira Millstein
Save the Date: CII Fall 2017 Conference
​Upcoming Meetings that Feature Members’ Proposals
Throughout the 2017 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
​Proposed Changes to Shareholder Proposal Rule would Have Unintended Consequences
Provisions in the CHOICE Act that would implement onerous requirements for shareholders who wish to file shareholder proposals would shut down the productive dialogue that results from these proposals, says a Columbia Law School Blue Sky Blog by J. Robert Brown.
AFT Study: Fees Paid to Alternative Investment Managers Lead to Underfunded Pensions
Excessive fees paid to alternative investment managers are a significant contributor to pension funds’ shortfalls, says a new study by the American Federation of Teachers (AFT).
​Fed Up, Netflix Shareholders Press for Majority Voting, Proxy Access, ESG Disclosure
Since 2013 the Netflix board has declined three times to implement a majority-supported shareholder proposal asking the board to amend the bylaws to require uncontested directors to obtain a majority of votes cast in order to be elected to the board.
​Conoco Phillips Reveals Say-on-Pay Failure at Virtual-Only Meeting
At the Conoco Phillips May 16 annual meeting, Chair and CEO Ryan Lance announced the company’s say-on-pay vote had failed by a significant margin.
Shareholder Proposals on Climate Change Register Strong Votes
A number of shareholder proposals centered on climate change have received notably high votes so far this proxy season.
​Debate over Dual-Class Stock Continues to Make News
Quite a few new developments emerged recently on the dual-class stock front.
​CII and 50+ Investors Tell House CHOICE Act Weakens Investor Rights
CII and more than 50 institutional investors with $4 trillion in combined assets sent a letter May 17 to all members of the House of Representatives opposing provisions of the Financial CHOICE Act that undercut fundamental shareholder rights.
​News from CII
New Member!
Teleconference: Financial Regulatory Updates
CII Comes to NYC: Honoring Ira Millstein
Save the Date: CII Fall 2017 Conference
​Sad Farewell
CII grieves the passing of long-time member and governance advocate Rich Ferlauto.
​Upcoming Meetings that Feature Members’ Proposals
Throughout the 2017 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
​SEC Event on IPO Decline Opens Broader Questions about Capital Raising
During a May 10 half-day session on reigniting the IPO market hosted by the SEC and New York University, dialogue expanded to debate about what is driving young companies toward private capital fundraising for early growth.
Protest at Bombardier, Strong Support for Proxy Access Highlight Canada’s Proxy Season
Amid strong investor criticism on poor performance and executive pay hikes, Bombardier announced May 11 that Executive Chairman Pierre Beaudoin will step down as an executive, but remain as non-executive chair.
​Generation Investment Management Targets Pay at JLL
London-based Generation Investment Management (GIM), founded by Al Gore and others, on May 8 said it would write to inform its clients, which include large asset owners, that at Jones Lang LaSalle’s (JLL) May 31 annual meeting it intends to vote against re-election of the company’s compensation committee members and the board chair, as well as its say-on-pay proposal.
​Corporate Feud Paints Dutch Governance in Negative Light
The months-long standoff between Akzo Nobel and its U.S. rival and suitor PPG has sparked an investor backlash against the Dutch paint maker.
​SEC Appoints Hinman Director of Corporation Finance
New SEC Chair Jay Clayton announced May 9 that William Hinman will serve as the director of the SEC’s Division of Corporation Finance.
​New CII Study Examines Economic Impact of Multi-Class Common Stock
Multi-class common stock with differentiated voting rights has no meaningful effect on long-term performance, as measured by return on invested capital (ROIC), finds a new CII research paper.
​CII Extends Deadline for Investors to Co-Sign CHOICE Act Letter to House Members
CII is extending to 3 PM ET Monday, May 15, the deadline for signing on to a CII letter to all members of the U.S. House of Representatives strongly opposing certain provisions of the Financial CHOICE Act.
FYI
CII Member discount for US SIF Conference and course on the Fundamentals of Sustainable and Impact Investment
News from CII
Members-only Listserv
Teleconference: Financial Regulatory Updates
CII Comes to NYC: Honoring Ira Millstein
Upcoming Meetings that Feature Members’ Proposals
In addition to these write ups, members can share information about their initiatives on CII’s Activism Committee Bulletin Board.
Cooperation between Money Managers and Activist Funds Exemplified at Whole Foods
The scenario playing out at Whole Foods is indicative of how the relationship between traditional money managers and activist funds is shifting.
Mylan Discloses Large Payments to Chair
Mylan Laboratories on May 2 disclosed compensation for Chairman Robert J. Coury of $98 million, as valued in the preliminary proxy statement summary compensation table.
AICPA Releases Framework to Help Companies Report on Efforts to Oversee Cybersecurity Risks
The American Institute of Certified Public Accountants (AICPA) just created a voluntary framework to help companies inform investors about their efforts to guard against cybersecurity risks and the effectiveness of those efforts.
Proxy Access Proposal Receives Majority Support, Say on Pay Almost Sinks at IBM Annual Meeting
At IBM’s April 25 annual meeting, the say-on-pay proposal came close to defeat and a proxy access proposal garnered majority support.
Spending Bill Holds SEC Funding Steady, Puts Brakes on Political Disclosure
The omnibus spending bill that Congress finally agreed on to keep the government running through September keeps funding for the SEC fairly steady but puts on hold an important rule and axes a special reserve fund.
House Committee Clears Financial CHOICE Act, CII Continues to Fight Back
The Financial CHOICE Act was voted out of the House Financial Services Committee May 4 in a straight party-line vote of 34 to 26.
FYI
CII Member discount for US SIF Conference and course on the Fundamentals of Sustainable and Impact Investment
News from CII
Welcome New Member!
Teleconference: Financial Regulatory Updates
CII Comes to NYC: Honoring Ira Millstein
​Upcoming Meetings that Feature Members’ Proposals
Throughout the 2017 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
New Study Examines How Investors are Integrating ESG Factors into Investment Decisions
Investors are using a wide variety of approaches to integrate environmental, social and governance (ESG) factors into their investment decisions, finds a new study by the IRRC Institute and Sustainalytics.
​Research Paper Recommends Sunset Provisions in Dual-Class Structures
A new discussion paper written by Lucian Benchuk and Kobi Kastiel as part of the Harvard John M. Olin Discussion Paper Series finds any benefits that companies launching IPOs derive from dual-class structures diminish significantly over time.
​Issues with Southern’s Plant Projects Prompt Shareholders to Oppose Directors, Say on Pay
Study Links Overly Generous CEO Pay to Lagging Financial Performance
Overpaid CEOs appear to be a fundamental leading indicator of future corporate risk and lagging shareholder return, says the third annual 100 Most Overpaid CEOs: Are Fund Managers Asleep at the Wheel? report from As You Sow.
​Teamsters Oppose Tenet’s Say-on-Pay Proposal after CEO Pay Rebounds
The International Brotherhood of Teamsters General Fund sent a letter to Tenet Healthcare shareholders urging them to vote against the say-on-pay proposal at the company’s May 4 annual meeting.
Wells Fargo’s Shareholders Vent Frustrations through Director Election
Shareholders’ ire over Wells Fargo’s scandalous sales practices was evident in the board election held at the bank’s April 25 annual meeting.
CII Targets Russell 2000 Companies in Latest Phase of Campaign
On January 30, CII completed the third round of letters in its majority vote campaign, sending letters and majority-voting FAQ's to 178 Russell 2000 companies.
​CII Submits Comments to S&P on No-Vote Shares in Indexes
CII on April 27 submitted responses to an S&P Dow Jones survey on potential exclusion of no-vote shares from indexes, including the S&P 500.
Eye on International: U.K. House of Commons Committee Calls for Sweeping Reforms
At the same time Congress is debating comprehensive legislation to scale back major corporate governance reforms, the U.K. government is proposing far-reaching changes that would broadly expand that nation’s existing framework for ESG and stewardship matters.
Congress Considers CHOICE Act, CII Fights to Block Bill’s Harmful Provisions
The day before the House Financial Services Committee held an April 26 hearing on the Financial CHOICE Act, CII issued a press release and sent a strongly worded letter to Committee Chairman Jeb Hensarling (R-Texas) and Ranking Member Maxine Waters (D-Calif.) outlining the troubling ways that the legislation threatens fundamental shareholder protections.
News from CII
New Spreadsheet Spotlights Comp Committee Members at Firms with Failed Say-on-Pay Votes
Welcome New Member!
Letter Responds to Senate Banking Committee’s Request for Proposals
Letter on New CII Policy to IFRS Advisory Council
Teleconference: Financial Regulatory Updates
Upcoming Meetings that Feature Members’ Proposals
Throughout the 2017 proxy season, the Governance Alert will note upcoming annual meetings at which proposals filed by CII members will come to votes.
HFT Industry Hits More than a Speed Bump
As high-frequency trading strategies have matured and become commoditized, HFT trading firms have fallen on harder times, reports The Wall Street Journal and other publications.
​ New York City Comptroller, Funds Make Inroads on Disclosure of Pay Equity
New York City Comptroller Scott Stringer and the New York City Pension Funds reached agreements with six major healthcare and insurance companies — two industries that have the highest adjusted gender pay gaps in the nation – to disclose information on how they address gender pay equity.
​Wells Fargo Annual Meeting Features High Profile Votes
Following from the scandal over fake accounts, the Wells Fargo April 25 annual meeting is likely to be one of the most highly visible of the year.
CII and CII Members Launch Offensive Opposing Virtual-Only Annual Meetings
With the number of companies holding virtual-only annual meetings continuing to spike, CII and CII members are expressing their opposition to this growing practice.
​Stock Indexes Agree to Launch Consultations on Inclusion of No-Vote Shares
On the heels of discussions with, and correspondence from, CII, two major stock indexes announced earlier this week that they are launching consultations to gather feedback from investors about the inclusion on their indexes of no-vote shares.
News from CII
New Members!
Teleconference: Financial Regulatory Updates
​New York State Fund Outlines Plans for Integrating ESG into Investments
The New York State Common Retirement Fund just published a new report detailing the process it is following to implement its ESG investment philosophy and strategies.
​Canadian Study Finds Extraordinary CEO Pay is Becoming Ordinary
Outside-of-plan awards, such as sign-on bonuses, severance payments and retention awards, are becoming a widespread and common component of executive pay, finds a new study by the Ontario Teacher’ Pension Plan and the Canada Pension Plan (CPP) Investment Board.
​New FASB Rule Requires Sears to Disclose Info on its Future Prospects
A new accounting rule that recently went into effect requiring companies to evaluate and disclose whether there is significant doubt about their ability to stay in business just shed some light on Sears Holdings’ current status.
​Two Largest Shareholders Fight for Control of Tronc
The two largest shareholders in Tronc, the company that owns The Chicago Tribune, The Los Angeles Times and other newspapers, are battling it out for control of the company.
​GM Fights Activist’s Plan to Create Dual-Class Common Stock
General Motors issued a statement March 28 rejecting a proposal filed by Greenlight Capital as well as a slate of four board candidates nominated by Greenlight.
​Toronto Stock Exchange Recommends Tightening Majority Vote Requirements
In the latest step toward enhanced shareholder rights in Canada, the Toronto Stock Exchange (TSX) March 9 released guidelines on majority voting requirements (MVR) and other governance practices. These provisions are in Bill C-25, which would amend the Canada Business Corporations Act (CBCA).
​Texas Legislator Introduces New Version of Governance Bill
As reported in last week’s Alert, the Texas House Committee on Investments and Financial Services introduced in the Texas legislature H.B. 2382, entitled the "Bring Business to Texas and Fairness in Disclosure Act."
FTSE/Russell to Consult on No-Vote Shares; CII Presses SGX, MSCI to Align Economic Interests with Voting Rights
After meeting with CII staff and receiving input from investors and a letter from CII, FTSE/Russell staff has indicated they will undertake a consultation seeking feedback on the potential inclusion of SNAP in FTSE and Russell indexes.
​News from CII
In Case You Missed It: Teleconferences Last Week
Teleconference TOMORROW on Maker-Taker Rebates: How they Impact Investors and What to do About It
Teleconference: Financial Regulatory Updates
​EY Study Offers Insights on Nominating and Governance Committees
A new EY study of Fortune 100 companies reveals nominating and governance committees’ primary roles.
EU Directive on Shareholder Rights Extended to Regulation of Institutional Investors, Proxy Advisors
Pending adoption by the EU Council, a revised version (link: http://data.consilium.europa.eu/doc/document/ST-7269-2017-INIT/en/pdf ) of the European Union’s Shareholders Rights Directive will usher significant regulatory requirements for institutional investors and their proxy advisors.
​Study: Disclosure on Corporate State Lobbying Expenditures Remains Murky
A new study released this week by the Sustainable Investment Institute and the Investor Responsibility Research Center Institute looking at corporate disclosure of state lobbying expenditures finds that although half of the states mandate some sort of disclosure on this, key questions remain for investors on what their portfolio companies actually spend.
​Texas Bill Targets Proxy Advisory Firms, Activist Shareholders, Shareholder Resolution Proponents
Representative Tan Parker, chair of the Texas House Committee on Investments and Financial Services, recently introduced in the Texas legislature H.B. 2382, entitled the “Bring Business to Texas and Fairness in Disclosure Act.”
​Throng of Investors Press Acting SEC Chair to Implement Pay Ratio Rule
One hundred and sixteen investment funds, led by the AFL-CIO’s Office of Investment, sent a co-signed letter March 22 to Acting SEC Chair Michael Piwowar urging him to have the commission follow through on implementing the pay ratio disclosure rule.
​Trump’s Nominee to Chair SEC Expresses Views on Wide Range of Investment Issues
President Trump’s nominee to be SEC chair, Jay Clayton, expressed some telling views on multiple topics during his March 23 nomination hearing before the Senate Banking Committee.
News from CII
Welcome New Member
Correspondence
Teleconference: Statutes of Repose for Federal Securities Claims - Key Issues and Emerging Developments
Teleconference on Maker-Taker Rebates: How they Impact Investors and What to do About It
Eye on International
Safran, a French manufacturer of plane engines, is trying to buy Zodiac Aerospace, which makes plane seats and electrical aerosystems, for 8.5 billion Euros through a tender offer, which requires the support of at least 50 percent of outstanding shares.
​Panel Convened by SEC Expresses Skepticism about Current Disclosure Regime
The SEC on March 10 hosted a day-long Evidence Summit on Disclosure Effectiveness, the first event in the commission’s new Policy-Oriented Stakeholder and Investor Testing for Innovative and Effective Regulation initiative.
​Former SEC CorpFin Director Higgins Backs Universal Proxies, Opposes Tougher Rules for Proxy Advisors
In a wide-ranging March 9 speech, former SEC Director of Corporation Finance Keith Higgins expressed shareholder-friendly views on a number of issues pending at the agency and on Capitol Hill.
New Senate Bill Stresses Importance of Cybersecurity Expertise on Boards
A bipartisan bill introduced in the Senate March 7 would require companies to disclose whether they have board members with cybersecurity expertise, and if they do not, to explain why they considered the expertise unnecessary.
Hensarling Memo Provides Preview of Likely New CHOICE Act Provisions
A memo from House Financial Services Committee Chair Jeb Hensarling (R-Texas) to the committee’s leadership indicates the new areas that are likely to be addressed in the latest version of the Financial CHOICE Act, which is slated to be re-introduced any day.
​SEC Finalizes Rules Requiring Hyperlinks
The SEC on March 1 adopted a rule requiring use of hyperlinks for each exhibit listed in the exhibit index of 10-Ks, registration statements and certain other filings.
​BlackRock Explains How it will Engage and Vote on Climate-Risk
Earlier this month, BlackRock issued a statement explaining how it is engaging with and voting at companies on the issue of climate risk.
How Much Is Too Much? CSX Asks Shareholders to Decide on Would-Be CEO’s Pay Demands
The CSX board announced February 14 that it is naming former Canadian Pacific CEO Hunter Harrison to be CEO, under pressure from activist investor Paul Hilal and his hedge fund, Mantle Ridge.
​Trump Names Giancarlo to Chair CFTC
President Trump on March 14 named Commodity Futures Trading Commission Acting Chairman J. Christopher Giancarlo to chair the CFTC longer-term. Giancarlo, a Republican member of the CFTC since 2014, has criticized aspects of Dodd Frank rules put in place by the commission, which he believes are flawed and strayed from the legislation.
Statistics on Institutional Ownership Seem to be Key in No-Action Requests
Recent SEC no-action decisions on proxy access proposals provide a road map to the commission’s interpretation of Rule 14a-8(i)(10), which allows companies to exclude proposals that ask them to adopt provisions they already have “substantially implemented.”
CII, Members Discuss No-Vote Shares with Indexers, New Dual-Class IPOs Add to Concern
CII will be formally asking MSCI, S&P and FTSE/Russell to conduct consultations seeking feedback from investors on the inclusion of new non-voting equity offerings in their core indexes.
​News from CII
Webinar: Return on Equality
Teleconference: Corporate Disclosure and Materiality
CII Members Urge Mexican Regulators to Adopt Governance Reforms
Cartica Capital is leading an effort to press the Mexican Banking and Securities Commission (CNBV) and the Mexican Stock Exchange (BMV) to adopt governance practices that are more shareholder-friendly.
Group of Institutional Investors Press Texas Lawmakers to Oppose ‘Bathroom Bill’
Led by New York City Comptroller Scott Stringer and Trillium Asset Management, a group of institutional investors with combined assets under management of $11 trillion sent a letter to Texas legislators opposing a bill that would prevent transgender people from using restrooms consistent with their gender identity in public schools, universities, and government buildings.
​Many Institutional Investors Opt to Engage Rather than Divest
A group of more than 100 institutional shareholders and religious orders, collectively representing $653 billion in assets under management, sent a statement February 16 to 17 banks urging them to use their influence as project lenders to support rerouting the Dakota Access Pipeline around the Standing Rock Sioux Tribe’s treaty territory.
CII Executive Director, CII Members Testify in MD House of Delegates to Support Majority Voting
CII Executive Director Ken Bertsch and two CII members testified February 22 in the Maryland House of Delegates in support of a bill HB 0589 that would make majority voting for directors in uncontested elections the default vote standard at companies incorporated in Maryland.
s Dual-Class Race to Bottom Accelerating? Singapore Considers Permitting Dual Class and Hong Kong May Revive Issue
The Singapore Exchange (SGX) on February 16 launched a consultation on permitting public company listings with dual-class share structures.
FYI
ICGN Winter Events in DC Open to CII Members
News from CII
Welcome New Members!
CII Sends Two Comment Letters
In Case You Missed It Teleconference: CII Congressional Advocacy Initiatives for 2017
Registration Deadline for 2017 Winter Conference Approaching
Master Class: Executive Compensation 201
Pension Fund Trustee Training
Share Proxy Season Updates on Your Initiatives!
​Governance Round Up
A compilation of recent governance news.
​Elliott’s Proxy Fight at Arconic Heats Up
While proxy fight threats to relatively large companies receded in 2016, Arconic faces what appears to be an intense challenge.
Banc of California Adopts Reforms in Response to Looming Proxy Fight
Responding to an announcement from CalSTRS and Legion Partners Asset Management that they are launching a proxy fight at Banc of California, the bank appointed a new director and adopted several governance reforms.
​FYI
Washington State Looking for Corporate Governance Officer
News from CII
2017 Winter Conference Registration Open
Master Class: Executive Compensation 201
Share Proxy Season Updates on Your Initiatives!
​Staples, Exxon Mobil Respond to Shareholders with Governance Reforms
Two big U.S.companies just announced they are adopting the governance reforms requested in shareholder proposals.
​NYC Funds Announce Carbon Footprint Analysis
Trustees of five New York City pension funds on February 2 announced they will undertake “the first-ever carbon footprint analysis of their portfolios and determine how to best manage their investments with an eye toward climate change.” In a press release, New York City Comptroller Scott Stringer’s office says “a failure to adapt to the realities of global warming could present potential investment risks.”
​Trump’s Supreme Court Nominee Represented CII before High Court in 1999
President Donald Trump’s nominee to the Supreme Court, Neil Gorsuch, has a connection to CII.
​U.S. Chamber Focuses on Updating Corporate Disclosures in New Administration
The Chamber of Commerce’s Center for Capital Markets Competitiveness on January 31 hosted a conference and released a publication on modernizing the corporate disclosure system.
​Stewardship Group Urges Investors to Sign onto Framework Setting Governance Standards
A group of investors is calling on every institutional investor and asset management firm investing in the United States to sign onto its Framework for U.S. Stewardship and Governance.
​CII Report on Proxy Access Bylaws at U.S. Companies Finds Convergence on Key Provisions
CII published a report February 2 on proxy access bylaw provisions adopted by 347 U.S. public companies.
CII Organizes Members to Co-Sign Letter to Snap on IPO with No Voting Rights for Public Investors
CII is urging its members to co-sign a letter to the co-founders of Snap urging them to reconsider their plans to go public with a share structure that offers public investors no voice in the company’s corporate governance.
News from CII
Share Proxy Season Updates on Your Initiatives!
In Case You Missed It: Teleconference Offering 2017 Proxy Season Preview
2017 Winter Conference Registration Open
Master Class: Executive Compensation 201
​Study by IRRCi and ISS Tracks Progress and Stagnation on Corporate Boards
A comprehensive study released January 24 reveals that although boards at S&P 1,500 companies are adding a substantial number of new directors, directors with at least 10 years of board service still occupy 38 percent of board seats.
​U.K. Coalition Backs Similar Regime for Large Public and Private Companies
Four U.K.-based organizations January 24 sent a letter to U.K. Prime Minister Theresa May urging her to streamline the governance expectations for companies with more than 1,000 employees, whether publicly traded or privately held.
CEOs of BlackRock, State Street Advise Companies on Long-term Strategies
The heads of two huge U.S. money managers wrote to the CEOs and boards of the firms in which they invest and advised them on the factors they should take into account when drafting their long-term strategies.
CII Members Offer Rundown of 2017 Proxy Season Plans During Teleconference
CII Members shared their 2017 proxy season initiatives during a January 25 teleconference.
News from CII
New Members
In Case You Missed It: Teleconference Offering Update on Delaware Case Law
Teleconference: 2017 Proxy Season Preview
2017 Winter Conference Registration Open
Master Class: Executive Compensation 201
​Japanese Exchange Issues Report on Governance Code Compliance
The Tokyo Stock Exchange released January 16 a report on listed companies’ progress toward compliance with the comply-or-explain Japanese Corporate Governance Code adopted in June 2015.
Surveys Provide Insights into Proxy Advisory Firms’ Practices and Influence
With so much attention on Capitol Hill being focused on proxy advisory firms, two new surveys shed some light onto how these firms are viewed by companies and how they are used by investors.
​NASDAQ Lists its Priorities in the New Administration
NASDAQ has laid out its priorities for the new Trump Administration.
​Investors’ Voting Power Vanishes in Snap IPO
Snap, the technology company that owns the disappearing message app Snapchat, is taking dual-class stock to an extreme level.
​House Passes Bill Requiring SEC to Conduct Extensive Cost-Benefit Analysis
The House, late in the afternoon on January 12, passed along party lines H.R. 78, the SEC Regulatory Accountability Act, which would require the SEC to engage in a rigorous cost-benefit analysis each time it issues a new rule. CII has expressed strong opposition to the legislation.
Management’s Access to Preliminary Vote Results Receives Renewed Attention
A recent study and group of SEC no-action decisions have brought the issue of preliminary vote tallies back into the spotlight.
News from CII
In Case You Missed It: Teleconference on End-to-End Vote Confirmation
Teleconference: Delaware Case Law Update
Teleconference: 2017 Proxy Season Preview
2017 Winter Conference Registration Open
Master Class: Executive Compensation 201
​NYC Funds Report Progress on Proxy Access and Political Spending Disclosure
The New York City Pension Funds’ 2016 Post-Season Report released January 12 by New York City Comptroller Scott M. Stringer highlights progress on corporate adoptions of proxy access bylaws and political spending disclosure.
​Apple’s Upcoming Annual Meeting Features Five Shareholder Proposals
Apple just issued the proxy statement for its February 28 annual meeting, and the agenda shows the following five shareholder proposals will be coming to votes:
​Bill Would Cut Tax Exemption for Performance-Based Pay
Democratic lawmakers on Capitol Hill have introduced legislation to end a tax exemption for CEO bonuses and prevent publicly traded companies from deducting the costs of these bonuses from their corporate tax bills.
​CII Members Cite Council’s Universal Proxy Letter in Comments to SEC
The SEC received 30 comment letters on its universal proxy proposal before the January 9 deadline for submission. Of that total, 12 were from institutional investors, five from asset managers and three from law firms.
​FYI
ICGN Winter Events in DC Open to CII Members

Amicus Brief on Delaware Law and Appraisal Rights
​News from CII
In Case You Missed It
Teleconference on End-to-End Vote Confirmation
Teleconference: Delaware Case Law Update
Teleconference: 2017 Proxy Season Preview
2017 Winter Conference Registration Open
Master Class: Executive Compensation 201
Pension Fund Trustee Training
​Highlights of CII’s Accomplishments this Quarter
CII Urges Hill Leaders to Leave Anti-Shareholder Riders Out of Spending Bill
CII Executive Director Outlined Priorities, Concerns for SEC Advisory Council
Publication
New Members
Correspondence and Testimony
Teleconferences and Webinars
​Governance News this Quarter
Proxy Access Trial Run Halted
​Governance News this Week
CII Letter Supports SEC Proposal on Universal Proxies and Clear Disclosure of Vote Standards
CII Publishes Guide to Majority Voting for Directors
DOL Issues Guidance on Proxy Voting by Employee Benefit Plan Fiduciaries
Appeals Court Rules SEC’s Use of In-House Judges is Unconstitutional
Trump Nominates Wall Street Lawyer to Chair SEC
SEC Chair White: Investors Should Not Be Myopic on High-Quality Global Accounting Standards
Delaware Court Upholds Law Prohibiting Fee-Shifting Bylaws
FYI
ICGN Winter Event in DC Open to CII Members
News from CII
Teleconference: Say-on-Pay Frequency
Teleconference on End-to-End Vote Confirmation
Teleconference: Delaware Case Law Update
Teleconference: 2017 Proxy Season Preview
2017 Winter Conference Registration Open
Master Class: Executive Compensation 201
Study Tracks Growing Norms in Governance Practices Worldwide
Farient Advisors, in conjunction with its partners in the Global Governance and Executive Compensation Network (GECN), conducted a survey covering 17 countries across six continents to gather insights into corporate governance practices and trends.
​SASB Benchmarks Sustainability Disclosures
The Sustainability Accounting Standards Board (SASB) earlier this month published its inaugural Annual State of Disclosure Report.
​Task Force Offers Suggestions on Climate-Related Disclosure
To provide advice to investors trying to assess and price climate-related risks and opportunities, the Task Force on Climate-Related Financial Disclosure released December 14 comprehensive recommendations.
Trump Seeks Icahn’s Advice on SEC Chair; Speculation Swirls on other Agency Chairs
President-Elect Donald Trump consulted with activist shareholder Carl Icahn on the search for a new SEC chair.
​Say-on-Pay Frequency Moves to Forefront as Investors Prepare to Vote in 2017
In 2017, for the first time since 2011, shareholders will vote on the frequency of say on pay at a large number of companies.
​News from CII
Teleconference on End-to-End Vote Confirmation
Teleconference: Delaware Case Law Update
Teleconference: 2017 Proxy Season Preview
2017 Winter Conference Registration Open
Master Class: Executive Compensation 201
Annual Board Index Finds Decline in Turnover, Increase in Female Directors
Spencer Stuart just published the 31st edition of its Board Index, which examines the latest data in board composition, board practices and director compensation among S&P 500 companies.
​New Equilar Study Tracks Corporate Disclosure on Pay and Governance
Equilar’s recently released Executive Compensation & Governance Outlook 2017 highlights noteworthy trends in corporate governance and executive compensation disclosure at S&P 500 companies.
​SEC Grants Apple No-Action Relief from GHG Proposal
Apple was granted no-action relief from a proposal filed by responsible investment firm Jantz Management asking the company’s board to draft a plan for Apple to reach a net-zero greenhouse gas emissions status by 2030.
​Portland Passes Tax on Firms with Large Gaps Between CEO and Worker Pay
Portland’s City Council on December 7 passed a measure to tax companies at which the CEOs make more than 100 times the median employee pay.
​Netherlands Updates Governance Code
On December 8 a Dutch monitoring committee chaired by corporate governance professor Jaap van Manen released an updated version of the Netherlands’ comply-or-explain corporate governance code.
​Companies Raise Investors’ Ire by Creating Non-Voting Stock Classes
Efforts by the boards at two prominent companies to add non-voting classes of shares while allowing board chairs to keep disproportionate voting power are raising investors’ hackles.
​News from CII
Policies Committee Seeks Comments
Welcome New Members!
Teleconference on End-to-End Vote Confirmation
Teleconference: 2017 Proxy Season Preview
In Case You Missed It: Webinar on U.S. Sustainable, Responsible and Impact Investing Trends 2016
2017 Winter Conference Registration Open
​IRRCi Awards Research on Dangers of Short-Term Investing
Two research papers that have the potential to reshape investor thinking on the detrimental impacts of short-term investing won the Investor Responsibility Research Center Institute (IRRCi) annual investor research competition.
​Division of Corporation Finance Director to Leave SEC
The Director of the SEC’s Division of Corporation Finance Keith Higgins plans to leave the commission in early January after heading the division for more than three years, the SEC announced December 6.
Supreme Court Upholds Insider Trading Conviction
In the first major insider trading case in two decades, the U.S. Supreme Court on December 6 ruled that a man could be sent to prison for making trades even if the insider who provided him with a tip was not trying to make money.
​Concern Rises Over Potential Antitrust Implications of Common Ownership
Does “common ownership” by institutional investors of companies in an industry cause prices in that industry to rise?
​Wells Fargo Responds to Investors, Alters Bylaws to Ensure Independent Chair
In response to a shareholder proposal filed by Connecticut State Treasurer Denise Nappier, Illinois Treasurer Michael Frerichs, Hermes EOS, the UAW Retiree Medical Benefits Trust and the Needmor Fund, Wells Fargo announced December 1 that it is changing its bylaws to require its chair and vice chair be independent members of the board. The proponents withdrew their proposal.
CII Executive Director Outlines Priorities for SEC Advisory Council
Speaking before the SEC’s Investor Advisory Council (IAC) December 8, CII Director Ken Bertsch outlined both the Council’s priorities and concerns and acknowledged the commission’s recent accomplishments in several key areas.
News from CII
Teleconference
End-to-End Vote Confirmation
2017 Winter Conference Registration Open
Group of CII Members Offers Advice on Talking with Firms about Stock Buybacks
A coalition of CII members published a guide November 29 for institutional investors who are engaging with companies on capital allocation/stock buyback decisions.
Proxy Access Trial Run Halted
The first trial run for proxy access appears to have hit a roadblock.
​SEC: No Immunity for Exchanges from Pension Fund Suit Alleging Market Manipulation
The SEC on November 28 filed an amicus brief arguing that national securities exchanges should not have “absolute immunity,” as the defendants claimed, in a case involving high-frequency trading.
​State Treasurers, Hermes Demand Independent Board Leadership at Wells Fargo
Connecticut State Treasurer Denise Nappier, Illinois Treasurer Michael Frerichs, Hermes EOS and the Needmor Fund filed a proposal asking Wells Fargo’s board to change its bylaws to require the chair to be an independent member of the board.
​U.K. Government Proposes Major Corporate Governance Reforms in New Paper
Post Brexit, the U.K. government is making plans to bolster corporate governance as part of its strategy to continue to attract investment. The government’s Department for Business, Energy & Industrial Strategy issued and invited comments on a Green Paper on corporate governance reform November 29.
FYI
Regions Seeks Corporate Social Responsibility Analyst
​News from CII
In Case You Missed It
Teleconference: Strategies, Engagements, and Responses to Majority Vote Standard Advocacy
Teamsters Urge McKesson Board to Take Action to Address AG’s Charges
The International Brotherhood of Teamsters sent a letter November 15 to McKesson’s board urging it to take steps to investigate and address company practices that have resulted in West Virginia’s Attorney General charging McKesson with “illegal and reckless and malicious action” in “flooding” a state of fewer than 2 million people with 100 million opiate doses over a five-year period.
​New GAO Study Examines Proxy Advisory Firms’ Influence
new GAO study, Corporate Shareholder Meetings: Proxy Advisory Firms’ Role in Voting and Corporate Governance Practices, finds that the level of influence that proxy advisory firms have on voting and corporate governance is minimal because large institutional investors cast the majority of proxy votes and do not exclusively rely on the research and vote recommendations offered by proxy advisory firms to help decide how to vote proxies.
​Former SEC Commissioner Atkins Leads Trump’s Transition Efforts at Agency
President-elect Donald Trump tapped former SEC Commissioner Paul Atkins to help oversee the new administration’s transition efforts at the SEC and other financial agencies and to recommend policies on financial regulation.
​International Investment Funds Urge Revamp of Executive Pay Practices
Three prominent international investment funds that are CII members are calling for a major overhaul of executive compensation.
​GAMCO Uses National Fuel Gas’s Proxy Access Bylaw
FYI
Globe Tax Reports: Pension Funds Eligible for Recovery of Foreign Withholding Tax
News from CII
Teleconference: Strategies, Engagements, and Responses to Majority Vote Standard Advocacy
​Coalitions Drive Progress on Board Diversity
Board diversity continues to be a pressing issue for investors and two groups are taking an active role in the issue.
​Proxy Advisors Split on Voting Recommendations for Tesla-SolarCity Deal
Shareholders will vote November 17 on whether to approve Tesla Motors’ purchase of SolarCity, and the two major U.S. proxy advisory firms are split on their voting recommendations on this deal.
​CII Urges Hill Leaders to Leave Anti-Shareholder Riders Out of Upcoming Spending Bill
Under the new Trump administration and Republican-controlled Congress, CII will continue to fight to stop efforts to roll back or eliminate many of the critical investor protections put in place by the Dodd-Frank Act as well as other reforms that were enacted in the wake of the 2008 financial crisis.
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News from CII
Teleconference: Strategies, Engagements, and Responses to Majority Vote Standard Advocacy
Highlights of CII Accomplishments this Quarter
Fall Meeting
Two New Policies
Majority-Vote-Standard Campaign
Correspondence and Testimony
Teleconferences and Webinars
New Members
Governance News This Quarter
News from the Department of Justice
News from Capitol Hill
News from the SEC
Governance News this Week
CII’s New FAQ Explains Benefits of SEC’s Proposed Universal Proxy Rules
New Report by CEO Group Calls for Litany of Changes to Shareholder Proposal Process
Does the Financial System Work? University of Delaware Panel Offers its Two Cents
UNITE-HERE Highlights Frightful Governance Practices
​News from CII
Teleconference: Strategies, Engagements, and Responses to Majority Vote Standard Advocacy
In Case You Missed It: Teleconference on Cybersecurity - Confronting the Challenge from an Investor's Perspective
CII Files Third Comment Letter on SEC Disclosure Effectiveness Project
​Conference Board Hosts Corporate Political Spending Event
The Conference Board hosted its annual corporate political spending conference on October 20 in Washington, D.C.
​U.K. Government Launches Inquiry into Major Governance Overhaul
In the U.K., the House of Commons’ Business, Innovation and Skills Committee at the beginning of the month launched a corporate governance inquiry in anticipation of instituting reforms.
Federal Regulators Propose Cybersecurity Standards for Financial Institutions
The Federal Reserve, Office of the Comptroller of Currency and the Federal Deposit Insurance Corporation on October 19 issued an advanced notice of proposed rulemaking (ANPR) that would strengthen cybersecurity standards for many large financial institutions.
​CII Study Finds IPO Companies’ Governance Practices Lacking
Last month, CII staff completed a study of the corporate governance practices implemented at newly public companies. The results were not encouraging.
​CII Targets Russell 2000 Companies in Majority-Vote-Standard Campaign
On October 25, CII stepped into the next phase of its majority-vote-standard campaign by sending 194 letters to Russell 2000 companies, encouraging them to replace their plurality vote requirements for uncontested director elections with a true majority vote standard.
​SEC Proposes Universal Proxy Card for Contested Elections
In a groundbreaking move, the SEC on October 26 voted 2-to-1 to propose rules that would require companies to provide universal proxy cards in contested director elections.
News from CII
Teleconference: Cybersecurity - Confronting the Challenge from an Investor's Perspective
Teleconference: Strategies, Engagements, and Responses to Majority Vote Standard Advocacy
Comment Letter to SEC on Exhibit Hyperlinks
​New Study Finds Progress on 10-K Disclosures
A new report from EY and the Financial Executives Research Foundation highlights some of the current trends in companies’ disclosure effectiveness efforts.
​Report Aims at Increasing Diversity at Asset Managers
A new joint report from The ReFund America Project, Roosevelt Institute and Service Employees International Union finds opportunities for investment consultants to both promote minority asset managers and create long-term financial value for institutional investors.
​SEC Seeks Feedback on Pay Ratio Disclosure
As part of its comprehensive disclosure effectiveness review, the SEC released on October 18 compliance and disclosure interpretations that include questions related to the pay ratio disclosure rules.
​Delaware Vice Chancellor’s Paper on Proxy Plumbing Now Available
Delaware Vice Chancellor J. Travis Laster told CII Fall Conference participants that the complex proxy plumbing system continues to cause problems related to voting, and that solutions may be near through distributed ledger technology, the best known versions of which are called “blockchain.”
Proxy Access News
Although the 2017 proxy season has not launched, the scene is being set for how proxy access will play out then.
Canadian Parliament Considers Amendments to Require Majority Voting
A bill amending the Canadian Business Corporations Act (CBCA) to allow for majority voting in director elections is currently wending its way through the Canadian Parliament.
​SEC to Propose Rules on Universal Proxy Card Next Week
The SEC is set to consider at an October 26 open meeting a proposal on universal proxy cards, an issue that CII has pressed for two years.
FYI
OSERS Seeks Executive Director
News from CII
Teleconference: Cybersecurity - Confronting the Challenge from an Investor's Perspective
​CAQ Survey Finds High Levels of Retail Investor Confidence in Markets
Results from the Center for Audit Quality’s recent "Main Street Investor Survey"
​50/50 Project’s Survey Highlights Key 2016 Climate Change Votes
The 50/50 Climate Project released its “Key Climate Vote Survey” highlighting 27 votes at 18 companies in the oil and gas utility sectors that the project believes are representative of the initiatives proposed by long-term shareholders “to promote better risk management and preserve company value at these firms.”
​Nobel Prize Winner’s Work Includes Focus on Executive Compensation
The Royal Swedish Academy of Sciences on October 10 awarded Bengt Holmstrom the Nobel Economics Prize for work on contract theory.
Weinberg Center Roundtable Elevates Climate Competence at the Board Level
Twelve roundtable participants from various sides of the market discussed how boards should adapt to growing business risks and opportunities posed by climate change at an October 6 event at the University of Delaware’s Weinberg Center.
​SEC’s Enforcement Division Sets Records in Fiscal 2016
The SEC’s enforcement division set a few records in 2016, the agency reported October 11.
​State Street Paper Warns Against Activist Settlements Favoring Short-Term Views
State Street Global Advisors published a paper October 10, “Protecting Long-Term Shareholder Interests in Activist Engagements,” explaining how it will decide to vote in director elections at companies that have reached settlements for board representation with activists.
​Carpenters’ Fund Continues to Make Progress on Auditor Disclosure
For the fifth year in a row, the United Brotherhood of Carpenters' Pension Fund will embark on a letter-writing campaign this proxy season to convince companies to step up the auditor independence disclosures in their proxy statements.
FYI
Results Available from Annual ISS Survey
Sad Good Bye
News from CII
Teleconference: Cybersecurity - Confronting the Challenge from an Investor's Perspective
​CII 2016 Fall Meeting Recap
More than 400 CII members gathered at the historic Palmer House Hilton in Chicago, September 28-30, to hear from a host of dynamic speakers discussing topics ranging from executive compensation to climate change.
FYI
LACERA Seeks CIO
MSCI Publishes Primer on Fossil Fuel Divestment
News from CII
Last Day to Register for CII's 2016 Fall Conference in Chicago!
​Policies on Long-Termism, Shareholder Voting Rights on Ballot at CII Meeting
At the fall meeting in Chicago, CII General Members are encouraged to vote on two new policies on long-termism and shareholders’ voting rights:
Corporate Debacles Raise Serious Concerns about Executive Pay
Recent headlines concerning scandals at Wells Fargo and Mylan point to serious governance problems associated with executive compensation.
Groups Join CII in Opposing Proxy Advisory Legislation
More organizations are weighing in on the proxy advisor legislation that prompted CII to send a September 6 letter to Capitol Hill lawmakers expressing serious concerns.
​House Subcommittee Hearing Focuses on Corporate Governance
CalPERS Investment Director, Sustainability, and CII Board Member Anne Simpson testified at, and CII submitted a letter for, a September 21 House Financial Services Committee’s Capital Markets Subcommittee hearing entitled “Corporate Governance: Fostering a System that Promotes Capital Formation and Maximizes Shareholder Value.”
News from CII
Registration for Fall Conference Ends Friday, September 23, at 5 PM ET!
Webinar: IEX and the Future of Trading--Tomorrow!
Two Educational Offerings at the 2016 Fall Conference
​Paper Examines Sources of Activist Funds’ Successes
Activist hedge funds that acquire a reputation for “clout and expertise” are more successful, according to Randall Thomas of Vanderbilt, Frank Partnoy of the University of San Diego and C.N.V. Krishnan of Case Western Reserve, in a paper published in the October 2016 Journal of Corporate Finance.
Three Bills Pending on Capitol Hill Could Harm Investors
Three pieces of legislation that contain worrisome provisions for investors are now wending their way through the halls of Capitol Hill.
​News from CII
Webinar: IEX and the Future of Trading
Two Educational Offerings at the 2016 Fall Conference
Register Now for CII's 2016 Fall Conference in Chicago!
​Disclosure on Proxy Voting Varies Widely at Non-U.S. Funds, Study Finds
As You Sow just published a study looking at disclosure of non-U.S. funds’ proxy voting practices and data.
​Study Finds Directors View Stock Buybacks Favorably, but Support More Disclosure
Corporate directors disagree with widespread criticism of corporate stock buybacks, but admit they should do a better job of disclosing the reasons they undertake these buybacks, finds a new study by Investor Responsibility Research Center Institute and Tapestry Networks.
​Teamsters Urge FedEx Shareholders to Vote Against Executive Pay Plan
The International Brotherhood of Teamsters sent a letter September 1 to FedEx shareholders urging them to vote against the company’s executive compensation plan at the September 26 annual meeting.
​Singapore Exchange’s Move to Permit Dual-Class Shares Raises Fear of Race to Bottom
The Singapore Exchange’s Listing Advisory Committee (LAC) voted in favor of permitting dual-class share structures on the exchange, the SGX announced last week, albeit with some protections. Implementation remains subject to the exchange's approval, which will be preceded by an opportunity for the public to comment.
​CII Letters Urge Hill Lawmakers to Oppose Bills on Proxy Advisors and Private Equity Funds
This week, CII weighed in on two pieces of legislation with serious implications for investors by sending letters to lawmakers on Capitol Hill.
News from CII
Teleconference on Proxy Advisory Firm Bill and Other Legislative Developments
Webinar: IEX and the Future of Trading
Two Educational Offerings at the 2016 Fall Conference
Register Now for CII's 2016 Fall Conference in Chicago!
​Task Force Aims to Streamline Guidance on Climate-Related Disclosure
Members of the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (TCFD) will hold a key plenary meeting in two weeks in Paris to decide on new voluntary reporting guidance.
Meeting to Watch
​SEC Seeks Comments on Disclosure of Governance Matters
As part of its comprehensive Disclosure Effectiveness Project, the SEC is seeking comments on disclosure requirements in Regulation S-K, Subpart 400, related to management, certain security holders and corporate governance matters.
​CII’s 2016 Letter Writing Campaign Finds Firms Still Hesitant to Respond
A review of CII’s letter writing campaign targeting majority-supported shareholder proposals and “zombie” directors finds that companies remain slow to respond to shareholders’ expressed wishes.
​FYI
Securities Lending by the Numbers
​News from CII
CII Has New Look
Webinar: IEX and the Future of Trading
Two Educational Offerings at the 2016 Fall Conference
Register Now for CII's 2016 Fall Conference in Chicago!
Last Call for Sponsorship Opportunities!
​Director Election Defaults by State
Last month, CII began a letter-writing campaign urging Russell 3000 companies to adopt majority voting in their director elections. Director election standards can be rooted in bylaws, articles of incorporation or corporate governance principles. However, state law also governs director election standards by setting a default that companies must use if their bylaws or articles do not explicitly set another standard.
Johnson Controls’ Shareholders Soundly Defeat Pay Package Linked to Merger
Although 98 percent of Johnson Controls’ shareholders who cast votes at the company’s August 17 special meeting supported the company’s merger with Tyco International and the combined firm’s move to Ireland, just 12 percent of the votes cast favored Johnson Controls’ executive compensation plan, the lowest say-on-pay vote of the year.
​Corvex Launches Unprecedented Proxy Fight at Williams
Corvex Management is venturing into uncharted territory with its proxy battle at Williams. The activist fund is seeking to elect 10 of its employees to the company’s board where they will stand as placeholders until Corvex solicits permanent independent directors and presents them to shareholders for a vote.
​SEC Seeks Comments on Governance Disclosure
At press time, the SEC announced that it is seeking public comments on disclosure requirements in Subpart 400 of Regulation S-K, including those related to management, certain security holders and corporate governance matters.
News from CII
Webinar: IEX and the Future of Trading
Two Educational Offerings at the 2016 Fall Conference
Register Now for CII's 2016 Fall Conference in Chicago!
​U.K. Group Criticizes Complexity in Executive Pay
The U.K. Executive Remuneration Working Group on July 26 issued a final report recommending steps to simplify pay structures and improve alignment with shareholders.
New Study Using Proxy Access Data Suggests Increased Valuations from Increased Shareholder Control
Evidence from Congressional and SEC proposals to provide proxy access rights suggests increased valuation follows from a perceived increase in shareholder control.
CII Continues to Press Companies to Adopt Majority Voting
CII continued its majority vote election campaign this week by sending letters to eight additional Russell 1000 companies that use plurality voting requirements within a dual-class system.
​CII Pilots “Engagement Exchange”
Engagement has become the new normal in relations between many public companies and their shareholders, so much so that finding time to talk can be a problem. That is the motivation behind CII’s Engagement Exchange, a pilot initiative that CII will host at the fall conference in Chicago.
​CII Urges Members to Sign Letter to Senate Banking Committee
CII is encouraging members to sign a letter it will be sending to leaders of the Senate Banking Committee strongly opposing legislation in the House of Representatives that would tighten regulation of proxy advisory firms to the detriment of institutional investors.
FYI
News from CII
Two Educational Offerings at the 2016 Fall Conference

Register Now for CII's 2016 Fall conference in Chicago!
​Study Finds No-Actioned Proposals Garner High Levels of Shareholder Support
During the period from 2003 to 2013 companies sought no-action relief from 40 percent of the shareholder proposals that they received, finds a study conducted by researchers at Harvard Business School.
​Business Roundtable Releases New Edition of Governance Principles
On the heels of the of the “Common Sense Corporate Governance Principles” unveiled by a group of 13 large companies July 21, the Business Roundtable just issued a new edition of its Principles of Corporate Governance.
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​Number of M&A Suit Filings Dropped, Finds Study
The rate of M&A litigation has declined substantially and so has the share of such litigation being filed in the Delaware Court of Chancery following last year’s ruling on Trulia Inc. Stockholder Litigation, finds a new study by Cornerstone Research.
​Shareholders Once Again Show Strong Support for Political Disclosure at McKesson
For the fourth consecutive year, a shareholder proposal asking McKesson to ramp up its disclosure of political contributions received strong support.
New No-Action Decision Sheds More Light on SEC’s Interpretation of Rule 14a-8(i)(10)
The staff of the SEC’s Division of Corporation Finance July 21 issued a no-action decision on a proxy access proposal that signals what the SEC staff considers “substantially implemented.”
New CII Campaign Targets Russell 1000 Holdouts on Majority Voting
CII mailed letters to 186 Russell 1000 companies August 1, urging them to adopt majority voting standards for elections of uncontested directors.
News from CII
Technical Glitches

Two Educational Offerings at the 2016 Fall Conference

Register Now for CII's 2016 Fall conference in Chicago!
Meetings to Watch
Throughout the 2016 proxy season, the Governance Alert provides brief write ups of upcoming annual meetings at which proposals filed by CII members will come to votes.
Eye on International U.K. Group Outlines Recommendations for New Approach to Executive Compensation
Lamenting a “complicated system with many examples of poor correlation between company performance and remuneration outcomes,” an ad hoc working group created in 2015 by the U.K.’s Investment Association on July 26 released its final report.
​New CalSTRS’ Governance Principles Hold Boards Accountable
On July 14, CalSTRS approved significant changes to its corporate governance principles that focus on the governance and composition of public company boards, climate change risk management and executive compensation.
​Council Asks PCAOB to Broaden Definition of Critical Audit Matters
CII sent a letter to the Public Company Accounting Oversight Board (PCAOB) July 27 commenting on the board’s proposed auditing standard entitled “The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion and Related Amendments to PCAOB Standards.”
News from CII
Welcome New Members!
A Note of Thanks!
Registration for CII's 2016 fall conference in Chicago is open!
​Meetings to Watch
Throughout the 2016 proxy season, the Governance Alert provides brief write ups of upcoming annual meetings at which proposals filed by CII members will come to votes.
​Two CII Members Re-Appointed to SEC Investor Advisory Committee
The SEC announced July 12 the appointment of three new members to its Investor Advisory Committee, and the reappointment of five members whose terms recently expired.
​CII Teleconferences Featuring Members Offer Overview of 2016 Proxy Season
CII members offered insights into the 2016 proxy season during two teleconferences hosted by CII’s Activism Committee this week.
New NASDAQ Rule Casts Light on Payments to Directors
Earlier this month, NASDAQ approved new rules requiring listed companies to publicly disclose on their website or in their proxy statements (or, if they do not file proxy statements, in Form 10-Ks or Form 20-Fs), all agreements and arrangements between any director or nominee and any person or entity (other than the company) that provide for compensation or other payment in connection with that person’s candidacy or service as a director.
​House Passes Appropriations Bill with Worrisome Provisions
In a 239-185 vote on July 7, the U.S. House of Representatives passed H.R. 5485, the Financial Services and General Government Appropriations bill.
​SEC’s Corp Fin Division Discusses Timely Issues at Annual Stakeholder Meeting
The SEC’s Division of Corporation Finance’s June 30 annual Rule 14a stakeholder meeting focused on six topics: the 2016 no-action request season, Staff Legal Bulletin (SLB) 14H, proxy access no-action requests, the use of images in shareholder proposals and staff requests.
CII Sends Letter to SEC on Regulation S-K Disclosures
On July 8, CII submitted a comment letter to the Securities and Exchange Commission (SEC) on the SEC's concept release, "Business and Financial Disclosure Required by Regulation S-K."
​SEC Proposes another Component of Its Disclosure Effectiveness Project
As part of its comprehensive disclosure effectiveness project, the SEC voted July 13 to propose amendments to eliminate redundant, overlapping and outdated provisions. This proposal supplements the concept releases already issued by the commission on Regulation S-X and Regulation S-K (see below).
​SEC Staff Posts New Guidance on HSR Act Exemption and SEC 13G Eligibility
The SEC July 14 posted a new Compliance and Disclosure Interpretation affirming that a shareholder may file on Schedule 13G notwithstanding disqualification from reliance on the investment exemption of Hart-Scott-Rodino Act.
​DOJ Reaches Record Settlement with ValueAct
ValueAct Capital Management agreed to pay a record fine of $11 million to settle allegations that certain of its entities violated the reporting and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act).
News from CII
Teleconference: 2016 Proxy Season Wrap Up
Teleconference Offering Proxy Season Wrap Up: Focus on Environmental Issues
Registration for CII's 2016 Fall conference in Chicago is now open!
​CII’s Accomplishments this Quarter
Publication
New Member
Correspondence and Testimony
Teleconferences and Webinars
New Staff Member

​2016 Proxy Season
Proposals on proxy access, environmental issues and political contributions dominated this proxy season.
​News from Capitol Hill
House Passes Three Worrisome Bills
Appropriations Bill Funding SEC
Proposed Dodd-Frank Overhaul
Extension of SOX Exemption for Emerging Growth Companies
​News from the SEC
Comprehensive Study of S-K Reporting Requirements
Revised Guidance on Non-GAAP Measures
Upcoming Amendments to Rule on Disclosure of Board Diversity
​News from the Department of Justice
Recent Ruling with Potential to Chill Engagement
News from CII
CII Welcomes New Staff Member!
Teleconferences
Meetings to Watch
Throughout the 2016 proxy season, the Governance Alert provides brief write ups of upcoming annual meetings at which proposals filed by CII members will come to votes.
Soap Opera Involving Bad Succession Planning at Viacom Plays out in Court
Chancellor of the Delaware Court of Chancery Andre Bouchard said June 22 that he will hold off on ruling whether to affirm Viacom founder and Chairman Emeritus Sumner Redstone’s removal of five directors from the media giant’s board.
House Set to Vote after Recess on Appropriations Bill Funding SEC
Upon returning from recess July 5, the House of Representatives is expected to consider SEC and other financial services appropriations for fiscal 2017.
SEC Expected to Approve Launch of New Stock Exchange
On June 17, the SEC is expected to vote to approve IEX’s plan to launch a new stock exchange designed with a “speed bump” on orders to ensure that no trader has a faster view of the market than any other trader.
Votes of Note
Despite receiving less-than-majority support from shareholders, directors at three U.S. companies were ‘re-elected,’ recently according to the companies’ 8-Ks.
Meetings to Watch
Throughout the 2016 proxy season, the Governance Alert provides brief write ups of upcoming annual meetings at which proposals filed by CII members will come to votes.
House Committee Clears Worrisome Bills for Investors
The House Financial Service Committee June 16 passed three bills that could undermine critical U.S. investor protections.
News from CII
Registration Open
Welcome New Member
Proxy Access Once Again Most Popular
Governance Roundup
Governance happenings at the House Appropriations Committee, D.C. Retirement Board and Hose Financial Services Committee
Carpenters’ Fund Urges SEC to Require More Corporate Clarity on Voting Standards
d Durkin, director of the United Brotherhood of Carpenters’ Corporate Affairs Department, sent a letter June 7 to Keith Higgins, director of the SEC’s Division of Corporation Finance, urging the commission to address inaccurate and misleading director election vote standard descriptions in corporate proxy statements and incorrect election vote options on proxy cards.
CII Members Make Serious Headway on Majority Voting in 2016
CII members continue to make significant progress convincing companies to adopt majority voting in uncontested director elections.
House Puts Three Investor-Unfriendly Bills on Fast Track
The House Financial Services Committee is reportedly set to mark up (debate, potentially amend and report to the full House) on June 15 three bills that could undermine shareholder rights at U.S. public companies.
Meetings to Watch
Throughout the 2016 proxy season, the Governance Alert provides brief write ups of upcoming annual meetings at which proposals filed by CII members will come to votes.
FYI
Minnesota State Retirement System Seeks Executive Director

CII Executive Director to Interview Microsoft Chair at ICGN Conference
News from CII
In Case You Missed It:
2016 Proxy Season Preview for India and Japan
Executive Pay Proposal at BlackRock Garners Tepid Support
A much publicized proposal submitted by the Stephen M. Silberstein Revocable Trust to BlackRock received approximately 4 percent of the votes cast at the company’s May 25 annual meeting, preliminary voting results indicate.
Gannett Vote- No Effort at Tribune Publishing Gets Mixed Reception
Gannett, which launched an unsolicited bid for Tribune Publishing after the advance notice deadline for shareholder nominations, is asking Tribune Publishing investors to withhold support from eight director nominees at Tribune’s June 2 annual meeting.
U.S. Court Dismisses Toshiba Securities Fraud Suit by ADS Holders
he U.S. District Court for the Central District of California May 20 dismissed a class securities fraud suit related to the accounting scandal at Toshiba.
Court Enjoins Ashford Proxy Fight in Unusual Ruling
The U.S. District Court for the Northern District of Texas May 20 enjoined activist shareholder Sessa Capital from pursuing a proxy fight at Ashford Hospitality Prime (AHP).
House Passes Bill Extending SOX Exemption for Emerging Growth Companies
The U.S. House of Representatives May 23 approved by voice vote the “Fostering Innovation Act of 2015” (H.R.4139) that would extend a “temporary” auditing exemption for certain emerging growth companies to 10 years.
Proposals on Proxy Access, Majority Voting Stand Tall in 2016 Proxy Season
With dozens of new vote tallies from annual meetings streaming in every day, results to date show that two types of shareholder proposals—those asking companies to adopt proxy access and those requesting a majority vote standard in director elections—are registering the highest levels of support.
Meetings to Watch
Throughout the 2016 proxy season, the Governance Alert provides brief write ups of upcoming annual meetings at which proposals filed by CII members will come to votes.
FYI
CII Executive Director to Interview Microsoft Chair at ICGN Conference
News from CII
Webinar: 2016 Proxy Season Preview for India and Japan

Teleconference: North Sound Capital v. Merck Amicus Curiae Brief
Steering Committee Takes First Steps Toward Vote Confirmation
The Securities Industry End to End Vote Confirmation Steering Committee announced last week that after conducting projects and pilots for the past four years it concluded that vote confirmation in the proxy voting process is viable.
PwC Report Highlights Boards’ Composition
A new report on board composition, from PwC’s Governance Insights Center, summarizes key issues on what has become a hot topic for boards and shareholders.
BlackRock Study Touts Benefits of Engagement
A paper by BlackRock’s Matthew J. Mallow and Jasmin Sethi, published recently in the NYU Journal of Law and Business, discusses the value of shareholder engagement.
Meetings to Watch
SEC Revises Guidance on Non-GAAP Measures
EC Corporation Finance staff on May 17 released revised Compliance and Disclosure Interpretations (CD&Is) on non-GAAP financial measures.
CII Raises Concerns about Proxy Adviser and SEC Reform Bills
In written testimony prepared for a May 17 House Capital Markets Subcommittee hearing, CII said a bill that would tighten regulation of proxy advisory firms was “a solution in search of a problem.”
FYI
International Corporate Governance Network (ICGN) Conference in San Francisco
News from CII
Webinar: 2016 Proxy Season Preview for India and Japan
Five CII General Members Endorse Code of Conduct for Asset Managers
A number of CII General Members are endorsing a new Asset Manager Code of Professional Conduct, a voluntary code that the CFA Institute is offering to help asset managers practice ethical principles.
PCAOB Seeks More Comments on Revised Auditor Reporting Standard
The Public Company Accounting Oversight Board (PCAOB) May 11 re-proposed for public comment its auditor reporting standard, The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion.
Meetings to Watch
Throughout the 2016 proxy season, the Governance Alert will provide brief write ups of upcoming annual meetings at which proposals filed by CII members will come to votes.
Votes of Note
Significant vote tallies are emerging from some noteworthy annual meetings.
FYI
International Corporate Governance Network (ICGN) Conference in San Francisco
News from CII
Webinar: 2016 Proxy Season Preview for India and Japan
Latest CII Publication Helps Shareholders Engage on Cybersecurity
Last week CII released a brief guide highlighting how shareholders without technical backgrounds can bring their concerns about cybersecurity to the fore by asking straightforward questions about strategy, governance and transparency.
eBay Shareholder Proposal on Gender Pay Gap Receives Majority Support
A proposal asking eBay to report on its policies and goals to reduce the gender pay gap received 51 percent of the votes cast at the company’s April 27 meeting, an unusually high level of support for this type of resolution.
Meetings to Watch
Throughout the 2016 proxy season, the Governance Alert will provide brief write ups of upcoming annual meetings at which proposals filed by CII members will come to votes.
FYI
International Corporate Governance Network (ICGN) Conference in San Francisco
News from CII
Webinar: 2016 Proxy Season Preview for India and Japan
In Case You Missed It: Webinar - Long-Termisim and Public Policy
Upcoming Annual Meetings
Throughout the 2016 proxy season, the Governance Alert will provide brief write ups of upcoming annual meetings at which proposals filed by CII members will come to votes.
Federal Agencies Propose Rules Restricting Wall Street Firm’s Incentive Pay
The National Credit Union Administration, along with five other federal agencies including the SEC, April 21 released a proposed rule that would place much tighter restrictions on financial firm executives’ incentive pay.
Pause in IPOs Ends with Prominent Dual-Class Listings
After an unusually long four-month pause in overall IPO activity, SecureWorks, the cybersecurity arm of Dell, listed shares on NASDAQ on April 21
Proposals Meant to Spark Nuanced Conversation about Stock Buybacks
hile several CII members are filing shareholder proposals at, and engaging with, companies to limit or control stock buybacks, one individual proponent has submitted 15 proposals requesting that companies adopt payout policies that give preference to share repurchases (relative to cash dividends) as a method to return capital to shareholders.
CII Expresses Concerns about DOJ Chilling Shareholder Communications
CII sent a letter April 26 to the Assistant Attorney General for the Department of Justice’s (DOJ) Antitrust Division William Baer expressing concern that recent DOJ comments and actions may chill engagement by asset managers and asset owners on corporate governance, executive compensation and shareholder rights.
FYI
International Corporate Governance Network (ICGN) Conference in San Francisco
News from CII

Webinar: Long-Termisim and Public Policy
Webinar: 2016 Proxy Season Preview for India and Japan
Upcoming Annual Meetings
Throughout the 2016 proxy season, the Governance Alert will provide brief write ups of upcoming annual meetings at which proposals filed by CII members will come to votes.
U.K. Asset Managers Get Tough on Board Tenure
The trend toward voting against, or withholding support for, directors with exceptionally long tenures seems to be spreading overseas.
CtW Investment Group Launches Vote-No Campaigns to Push for Board Independence
CtW Investment Group is launching vote-no campaigns at four companies where it says a lack of independence on the boards has led to serious business risks.
News from CII
Staff Promotions, CII Seeks Research Analyst, Webinar: Long-Termisim and Public Policy, Webinar: 2016 Proxy Season Preview for India and Japan, Comment Letter
Upcoming Annual Meetings
Throughout the 2016 proxy season, the Governance Alert will be providing brief write ups of upcoming annual meetings at which proposals filed by CII members will come to votes.
Governance Roundup
News and trends from recently released proxy statements.
SEC Launches Comprehensive Study of S-K Reporting Requirements
The SEC issued a 341-page concept release on April 13 as part of a comprehensive evaluation of the commission’s disclosure requirements in Regulation S-K.
PCAOB Seeks Public Comments on Proposed New Requirements for Lead Auditors
The Public Company Accounting Oversight Board (PCAOB) April 12 released amendments to existing standards to strengthen current requirements and impose a more uniform approach to the lead auditor's supervision of other auditors.
After Epic Lag, Vornado Moves on Majority Votes
Some companies take longer than others to receive the messages that their shareholders are sending. Vornado Realty Trust just announced that it is adopting major governance reforms.
Recent DOJ Move Could Have Implications for Institutional Investors
The Department of Justice’s (DOJ) recent suit against ValueAct Capital may give institutional investors who interact with their portfolio companies pause.
News from CII
Webinar: Understanding the Voting Chain
Teleconference: Long-Termism and Public Policy
Nominations for Chairs/Co-Chairs of Activism and Governance Committees Being Accepted Until April 12
CII’s Accomplishments this Quarter
Spring Meeting
New Policy on Newly Public Companies
New Board Elected
Teleconferences and Webinars
Correspondence
Proxy Season 2016
Proxy Access
Stock Buybacks
Executive Compensation
News from the SEC
Staff Guidance on Proposal Descriptions
Opposition to FASB Plan on Materiality

Clarification of Exclusions Based on Rule 14a-8(i)(10
News from CII
Webinar: Understanding the Voting Chain
Teleconference: Long-Termism and Public Policy
Nominations for Chairs/Co-Chairs of Activism and Governance Committees Being Accepted Until April 12
Recap of CII’s 2016 Spring Meeting
Approximately 450 CII members gathered in Washington, D.C., March 21-23 for the Council’s spring meeting, which featured a dynamic lineup of speakers who discussed topics ranging from private equity to board composition.
News from CII
Members Invited to Share Policy Ideas
Chamber Event Explores Future of Finance
A host of high profile speakers discussed the future of finance at a one-day summit held by the Chamber of Commerce’s Center for Capital Markets Competitiveness in Washington, D.C., March 16.
CII Members Focus on Issues Related to Board Tenure/Refreshment
The approval March 14 by CalPERS’ board to revisions to the pension giant’s Global Governance Principles is indicative of a larger trend by institutional investors.
News from CII
Shipping Address for Member Handouts
Time Running Out to Register for Spring Meeting
Spring Meeting Features Variety of Member-Hosted Events
CII members are encouraged to attend the member-hosted meetings taking place during breaks in the schedule on Monday, March 21, and Tuesday, March 22.
Governance Roundup
Hill Democrats push for board diversity, Amalgamated proposal registers high support, T. Rowe Price announces changes to director voting policy, CalPERS settles major suit against Moody's.
Governance Alert Interview:
The SEC’s Investor Advocate Rick Fleming sat down with Governance Alert Editor Rosemary Lally at the SEC’s headquarters March 8 and discussed his office’s priorities and how CII can help with its mission.
News from CII
n Case You Missed It
Webinar: IPOs - Taking Stock and Looking Ahead
Educational Opportunity at Spring Conference, Master Class: Analyzing Proxy Contests
Registration Open for Spring Conference
VW Governance Structure Draws Scrutiny in Article
A recent article identifies three governance-related factors as key contributors to the oversight failures that led to Volkswagen’s recent emissions regulation evasion scandal: unequal voting rights, government as a major shareholder and Germany’s co-determination model of corporate governance.
Pending IPO Demonstrates Need for CII Statement
Red Rock Resorts, a Las Vegas casino company pursuing an IPO, provides a perfect example of why CII’s Policies Committee and board of directors approved a statement (login required) that calls on young companies with corporate governance structures that insulate management from shareholders to sunset these structures within a limited time period.
State Street Presents Companies with Clear Expectations for Board Leaders
Last week, State Street Global Advisers sent guidelines for effective board leadership to lead directors and chairs at S&P 500 and large European countries.
FYI
SURS Seeks Proxy Adviser
CalPERS Launches Search for New CEO
News from CII
Welcome New Members!
CII Affirms Support for Disclosure of Payments by Dissidents to Nominees

Webinar: IPOs—Taking Stock and Looking Ahead
Educational Opportunity at Spring Conference, Master Class: Analyzing Proxy Contests
Registration Open for Spring Conference
Early Annual Meetings Feature Votes on Notable Governance Proposals
As proxy season 2016 gets set to launch, a few companies with early meeting dates have significant shareholder proposals on their proxy ballots.
News from CII
Welcome New Members!
In Case You Missed It--Teleconference on Volkswagen Fallout: Implications for Investors
Educational Opportunity at Spring Conference, Master Class: Analyzing Proxy Contests
Registration Open for Spring Conference
CalPERS’ Committee Approves Tougher Stance on Board Tenure
CalPERS’ Investment Committee February 16 approved revisions to the pension giant’s Global Governance Principles to require that companies take a comply-or-explain approach to the issue of long-tenured directors.
SEC Staff Bases ‘Substantial Implementation’ of Access Proposals on Ownership Threshold
On February 12, SEC staff drew a line in the sand to indicate when companies may omit shareholders’ proxy access proposals from their proxy statements based on Rule 14a-8(i)(10), which allows exclusion if a proposal already has been substantially implemented by a company.
News from CII
Comment Letter
Webinar
Educational Opportunity at Spring Conference, Master Class: Analyzing Proxy Contests
Registration Open for Spring Conference
Limited Partners’ Association Issues New Fee-Reporting Template
The Institutional Limited Partners Association (ILPA) January 29 released a new fee-reporting template to codify the presentation of fees, expenses and carried interest information by fund managers to limited partners.
CII Members Continue Focus on Executive Compensation in 2016 Proxy Season
A number of CII members plan to focus on reforming executive compensation practices at target companies this proxy season.
Companies Still Adopting and Tweaking Access Bylaws
Proxy access remains in the headlines thanks to companies adopting access bylaws, changing the parameters of the bylaws they already have in place and putting shareholder access proposals up for votes.
FYI
Job Opening
News from CII
Educational Opportunity at Spring Conference, Master Class: Analyzing Proxy Contests
Webinar
Volkswagen Fallout: Implications for Investors
Registration Open for Spring Conference
Speakers Cite Unfinished Business at Event Marking Anniversary of FCIC Report
At a February 3 event commemorating the fifth anniversary of the Financial Crisis Inquiry Commission’s (FCIC) final report, Sen. Elizabeth Warren (D-Mass.) said while the Dodd-Frank Act improved financial regulation by raising big banks’ capital requirements and ensuring orderly liquidation when they fail, the problem of “Too Big to Fail” persists.
Ashford Hospitality Prime Follows Parent Company’s Poor Governance Lead
Ashford Hospitality Prime (AHP), a spinoff of Ashford Hospitality Trust (AHT), is following in its former parent’s footsteps and restricting shareholders’ rights ahead of a showdown with an investor.
Companies Now Turning to Rule 14a-8(i)(10) to Omit Access Proposals
Ever since the SEC issued a staff bulletin that significantly limits when companies can use Rule 14a-8(i)(9) to exclude shareholders’ proxy access proposals from their proxy statements, firms are moving on and trying their luck using Rule 14a-8(i)(10).
CII Proposes Statement on Investor Expectations for Newly Public Companies
Alarmed by the trend of companies going public with corporate governance structures that insulate management from shareholders, CII’s Policies Committee and the board of directors last week approved a statement that calls on young companies with these provisions to sunset them within a limited time period.
FYI
Job Opening
News from CII
Registration Open for Spring Conference
UNITE HERE Questions the Benefits of Buybacks at Lodging REITs
As the debate over corporate stock buybacks continues, UNITE HERE is about to publish a report questioning if lodging REITs’ buybacks have worked for investors.
Not All Mutual Funds Support Proxy Access, Finds Nathan Cummings
A deep division exists in the mutual fund industry’s approach to proxy access, finds a new analysis issued by the Nathan Cummings Foundation.
SEC Investor Advisory Panel Joins CII in Opposing FASB’s Plan on Materiality
The SEC’s Investor Advisory Committee joined CII in strongly opposing plans by the Financial Accounting Standards Board (FASB) to adopt proposals that could significantly reduce valuable information currently available to investors.
FYI
Job Opening
News from CII
In Case You Missed It
Webinar: Delaware Case Law Review

Registration Open for Spring Conference
Early Vote on Access Proposal at Johnson Controls Could be Indicator of Support
In what could be a good gauge for proxy access proposals in 2016, Johnson Controls shareholders will vote January 27 on an access resolution filed by the Amalgamated Bank’s LongView Fund.
Marco Consulting Group Continues to Target Companies with Failed Say on Pay
For the fifth proxy season in a row, the Marco Consulting Group is coordinating an engagement effort focusing on companies where say-on-pay votes failed.
CII Members Focus 2016 Efforts on Curbing Stock Buybacks
Concern over the increasing number of companies repurchasing their shares is leading CII members to file shareholder proposals at, and engage with, companies over stock buybacks.