Conversely, we note that some shareholder proposals seek to address topics that are clearly within the purview of certain stakeholders. Over time, greater diversity in the boardroom can also promote greater diversity and resilience in the leadership team, and the workforce more broadly. As such, as long-term investors, we are interested in understanding how companies may be impacted by material climate-related risks and opportunitiesjust as we seek to understand other business-relevant risks and opportunitiesand how these factors are considered within their strategy in a manner that is consistent with the companys business model and sector. 0000042408 00000 n A proxy voting advice business will be deemed to satisfy the requirements of Rule 14a-2 (b) (9) (ii) (A) if its written policies and procedures are reasonably designed to provide registrants with a copy of its proxy voting advice, at no charge, no later than the time it is disseminated to the businesss clients. In the U.S., we believe that boards should aspire to at least 30% diversity of membership, [7] and we encourage large companies, such as those in the S&P 500, to lead in achieving this standard. Governance is the core means by which boards can oversee the creation of durable, long-term value. As noted above, highly qualified, engaged directors with professional characteristics relevant to a companys business enhance the ability of the board to add value and be the voice of shareholders in board discussions. Payouts to executives should reflect both the executives contributions to the companys ongoing success, as well as exogenous factors that impacted shareholder value. It is our view that shareholders should have the opportunity to express feedback on annual incentive programs and changes to long-term compensation before multiple cycles are issued. (go back), 13The International Financial Reporting Standards (IFRS) Foundation announced in November 2021 the formation of an International Sustainability Standards Board (ISSB) to develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors information needs. In such instances, we typically look for the board to have appropriate independent leadership structures in place. In an important change for newly public companies Examples of social issues include, but are not limited to, human capital management, impacts on the communities in which a company operates, customer loyalty, and relationships with regulators. We generally do not favor programs focused on awards that require performance levels to be met and maintained for a relatively short time period for payouts to be earned, unless there are extended vesting and/or holding requirements. Nonetheless, we may support the proposal where the company: Increase in authorized common shares BIS will evaluate requests to increase authorized shares on a case-by-case basis, in conjunction with industry-specific norms and potential dilution, as well as a companys history with respect to the use of its common shares. 0000015236 00000 n Where executive compensation appears excessive relative to the performance of the company and/or compensation paid by peers, or where an equity compensation plan is not aligned with shareholders interests, we may vote against members of the compensation committee. Environmental, Social, and Governance (ESG) Integration. Where we believe a companys disclosures or practices fall short relative to the market or peers, or we are unable to ascertain the board and managements effectiveness in overseeing related risks and opportunities, we may vote against members of the appropriate committee or support relevant shareholder proposals. Companies should disclose the steps they are taking to advance diversity, equity, and inclusion; job categories and workforce demographics; and their responses to the U.S. This structure should be aligned with shareholder interests, particularly the generation of sustainable, long-term value. 0000013331 00000 n When assessing how to vote including on the election of directors and relevant shareholder proposals robust disclosures are essential for investors to understand, where appropriate, how companies are integrating material sustainability risks and opportunities across their business and strategic, long-term planning. When determining whether to support or oppose an advisory vote on a golden parachute plan, BIS may consider several factors, including: It may be difficult to anticipate the results of a plan until after it has been triggered; as a result, BIS may vote against a golden parachute proposal even if the golden parachute plan under review was approved by shareholders when it was implemented. These roles and responsibilities should be disclosed and easily accessible. 0000012287 00000 n 0000024781 00000 n Dodge & Cox investment leadership & Committee updates. We encourage companies to structure their change of control provisions to require the termination of the covered employee before acceleration or special payments are triggered (commonly referred to as double trigger change of control provisions). In addition, all members of audit, compensation, and nominating/governance committees should be independent. Common circumstances are illustrated below: Directors should generally be elected by a majority of the shares voted. (See chart above.). 0000005166 00000 n Succession planning should cover scenarios over both the long-term, consistent with the strategic direction of the company and identified leadership needs over time, as well as the short-term, in the event of an unanticipated executive departure. This process may include internal board evaluations; however, boards may also find it useful to periodically conduct an assessment with a third party. We generally favor a simple majority voting requirement to pass proposals. Without a voting mechanism to immediately address concerns about a specific director, we may choose to vote against the directors up for election at the time (see Shareholder rights for additional detail). WebThis Renaissance Technologies website (www.renfund.com) is by invitation only. These activities can also create risks, including: the potential for allegations of corruption; certain reputational risks; and risks that arise from the complex legal, regulatory, and compliance considerations associated with corporate political spending and lobbying activity. C O M 6 of 17 Upcoming Milestones Early-Mid December: Publication of all updated ISS benchmark policies (proxy voting guidelines) for 2023 on ISS website. To signal our concerns, we may also vote against the chair of the nominating/governance committee, or where no chair exists, the nominating/governance committee member with the longest tenure. %PDF-1.5 % 0000006117 00000 n In the absence of a significant governance concern, we defer to boards to designate the most appropriate leadership structure to ensure adequate balance and independence. We acknowledge that the use of peer group evaluation by compensation committees can help calibrate competitive pay; however, we are concerned when the rationale for increases in total compensation is solely based on peer benchmarking. 1 Proxy Voting by Investment Advisers, Release No. We hold members of the compensation committee, or equivalent board members, accountable for poor compensation practices and/or structures. [4] However, BIS may vote against the most senior non-executive member of the board when appropriate independence is lacking in designated leadership roles. Boards should clearly explain the economic and strategic rationale for any proposed transactions or material changes to the business. We generally think that a right to act via written consent is not a sufficient alternative to the right to call a special meeting. 0000012172 00000 n We will evaluate these instances on a case-by-case basis. The research and benchmark policy voting recommendations from both proxy advisors are considered as part of the proxy voting decision . In this context, we encourage companies to include in their disclosures a business plan for how they intend to deliver long-term financial performance through a transition to global net zero carbon emissions, consistent with their business model and sector. We may oppose boards that appear to have an insufficient mix of short-, medium-, and long-tenured directors. Where a company is listed on multiple exchanges or incorporated in a country different from their primary listing, we will seek to apply the most relevant market guideline(s) to our analysis of the companys governance structure and specific proposals on the shareholder meeting agenda. As discussed more fully below in Section D of this Policy, depending on the proposal, an Approved Guideline may provide that Lazard should vote for or The most common form of ESPP qualifies for favorable tax treatment under Section 423of the Internal Revenue Code. Nonetheless, in situations where there is a substantial or dominant shareholder, supermajority voting may be protective of minority shareholder interests, and we may support supermajority voting requirements in those situations. WebThe Policy has been approved by the Board of Renaissance Property Securities Pty Ltd. We ask boards to disclose how diversity is considered in board composition, including professional characteristics, such as a directors industry experience, specialist areas of expertise and geographic location; as well as demographic characteristics such as gender, race/ethnicity, and age. We take particular note of cases involving significant financial restatements or material weakness disclosures, and we look for timely disclosure and remediation of accounting irregularities. Companies may engage in certain political activities, within legal and regulatory limits, in order to support public policy matters material to the companies long-term strategies. They are to be applied with discretion, taking into consideration the range of issues and facts specific to the company, as well as individual ballot items at shareholder meetings. The information provided here is neither tax nor legal advice. Majority vote standards generally assist in ensuring that directors who are not broadly supported by shareholders are not elected to serve as their representatives. Continue to $country-name$ Individual Investor site. [8] We recognize that it may take time and that companies with smaller market capitalizations and in certain sectors may face more challenges in pursuing diversity. In all instances, we will evaluate the changes to shareholder protections under the new charter/articles/bylaws to assess whether the move increases or decreases shareholder protections. Independent directors should have access to relevant management information and outside advice, as appropriate, to ensure they can properly oversee risk. (go back), 16For example, BlackRocks Capital Markets Assumptions anticipate 25 points of cumulative economic gains over a 20-year period in an orderly transition as compared to the alternative. 0000005611 00000 n See Appendix A of Calverts Proxy Voting Policies and Procedures for a general discussion of the proxy voting guidelines to which these ETFs will be subject. Securing the right of shareholders to nominate directors without engaging in a control contest can enhance shareholders ability to meaningfully participate in the director election process, encourage board attention to shareholder interests, and provide shareholders an effective means of directing that attention where it is lacking. Compensation committees should guard against contractual arrangements that would entitle executives to material compensation for early termination of their contract. We actively engage in ongoing shareholder public debates over proxy-related issues such as There is growing consensus that companies can benefit from the more favorable macroeconomic environment under an orderly, timely, and equitable global energy transition. Shareholders should have the right to vote on key corporate governance matters, including changes to governance mechanisms and amendments to the charter/articles/bylaws. 0000042640 00000 n We acknowledge that these factors may also play into the various elements of diversity that a board may attract. A growing number of companies, financial institutions, as well as governments, have committed to advancing decarbonization in line with the Paris Agreement. We frequently oppose proposals requesting authorization of a class of preferred stock with unspecified voting, conversion, dividend distribution, and other rights (blank check preferred stock) because they may serve as a transfer of authority from shareholders to the board and as a possible entrenchment device. We look to public disclosures for insight into the scope of the audit committee responsibilities, including an over view of audit committee processes, issues on the audit committee agenda, and key decisions taken by the audit committee. In addition, to the extent that an auditor fails to reasonably identify and address issues that eventually lead to a significant financial restatement, or the audit firm has violated standards of practice, we may also vote against ratification. Voting guidelines. On November 11, 2019, Institutional Shareholder Services (ISS) released its 2020 Proxy Voting Guidelines, which are generally effective for meetings on or after February 1, 2020. The views and strategies described may not be suitable for all investors. window.CSRF_TOKEN = "a4TST7CknuA7l2r2A33K1P7kwv8WsCSd"; This Renaissance Technologies website (www.renfund.com) is by invitation only. In general, we support market-standardized proxy access proposals, which allow a shareholder (or group of up to 20 shareholders) holding three percent of a companys outstanding shares for at least three years the right to nominate the greater of up to two directors or 20% of the board. We recognize that some companies may report using different standards, which may be required by regulation, or one of a number of private standards. The proposal should give unaffiliated shareholders the opportunity to affirm the current structure or establish mechanisms to end or phase out controlling structures at the appropriate time, while minimizing costs to shareholders. We will typically support amendments to the charter/articles/bylaws where the benefits to shareholders outweigh the costs of failing to make such changes. 0000050955 00000 n Corporate form shareholder proposals are evaluated on a case-by-case basis. Many companies have an opportunity to use and contribute to the development of low carbon energy sources and technologies that will be essential to decarbonizing the global economy over time. This includes, but is not limited to, settlement agreements arising from such behavior and paid for directly by the company. While we will typically support proposals requesting board de-classification, we may make exceptions, should the board articulate an appropriate strategic rationale for a classified board structure. Scope The guiding principle of this Policy is that voting rights should be exercised and We encourage companies to ensure that their compensation plans incorporate appropriate and rigorous performance metrics, consistent with corporate strategy and market practice. These guidelines provide an overview of how ISS approaches proxy voting issues for subscribers of the Sustainability Policy. In our view, shareholders should be entitled to voting rights in proportion to their economic interests. Clear and consistent disclosures on these matters are critical for investors to make an informed assessment of a companys HCM practices. (go back), 19BlackRock is subject to certain regulations and laws in the United States that place restrictions and limitations on how BlackRock can interact with the companies in which we invest on behalf of our clients, including our ability to submit shareholder proposals or elect directors to the board. While BlackRock is supportive of the shareholder rights to act by written consent and call a special meeting, BlackRock is subject to certain regulations and laws that place restrictions and limitations on how BlackRock can interact with the companies in which we invest on behalf of our clients, including our ability to participate in consent solicitations. 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