Proxinvest Corporate Governance Rating ® helps investors integrate governance into their investment decision and identify governance risks and opportunities within their portfolio.
Proxinvest Corporate Governance Rating ® Service rates European issuers through the analysis of four main themes :
Each theme is rated taking into account several comprehensive sub-categories.
Our unique two-step process to achieve each rating includes a first step quantitative valuation and a second step qualitative filter. Indeed, our process is supported by a network of local experts that have a deep knowledge of each local market best practices (from both customs and regulatory points of views).
If you are interested in the Proxinvest Corporate Governance Rating ®, please contact directly Proxinvest ( or +33(0)1 45 51 50 43).
Nordea Bank is a financial services group based in Sweden. Co. has three business areas: retail banking, wholesale banking, and wealth management. Retail banking conducts a full service banking operation and serves household and corporate customers in the Nordic markets as well as the Baltic countries. Wholesale banking provides banking and other financial solutions to large Nordic and international corporate, institutional and public companies. Wealth management provides investment, savings and risk management products. It also manages customers' assets and provides financial advice to individuals and institutional investors.
Founded in 1995, Proxinvest is an independent proxy firm supporting the engagement and proxy analysis processes of investors. Proxinvest mission is to analyse corporate governance practices and resolutions proposed at general meetings of listed firms.
Proxinvest main services are :
Proxinvest has been a pioneer and champion of good corporate governance and has grown into a recognised expert in the field.
Proxinvest is independently-owned and only works for investors : Proxinvest does not provide consulting services to the companies it covers, mitigating related risks to its clients and ensuring the independence of our analysis. As a result Proxinvest is able to take a robust, independent, engaged and unconflicted view of the companies in which our clients invest.
As Managing Partner of Expert Corprate Governance Service Ltd (ECGS), Proxinvest has built a large network of corporate governance experts to support clients in corporate governance analysis worldwide.
We have tweaked our 2019–2021e earnings, but we have cut 2019–2021e DPS for all banks bar SEB. We see downside risk to 2020–2021 consensus earnings in particular for SHB and Swedbank, due to ongoing pressure on mortgage margins and a likely slowdown in commercial real estate lending. Our sector top pick over the Q2 results and the next 12 months is SEB (BUY).
We have trimmed our EPS estimates by 1% and reiterate our BUY and SEK99 target price, attracted by SEB’s delivery of high and stable ROE, good loan growth trend, and strong capital position. While SEB would also be affected by softer loan demand from the real estate sector, we find it relatively well-positioned for continued good loan demand from its large corporate and industrial sector customers.
Ahead of the Swedish banks’ Q1 reporting season, we have made fairly limited earnings revisions, but trimmed our target prices for all the banks due to recent dividend payments. We see downside risk to 2019-2021e consensus earnings expectations in particular for SHB and Swedbank as we expect further pressure on mortgage margins. We reiterate our BUYs on SEB and Nordea, HOLD on Swedbank and SELL on SHB.
Item 2: Approve the Remuneration ReportThe remuneration structure is unsatisfactory. The main concern at the Company is that the potential maximum incentive pay including the bonus, matching shares on the deferred portion of the bonus and the LTI amounts to 1000% of base salary, which is considered grossly excessive. Actual incentive pay during the year was1.6 times the ECGS limit. Furthermore, variable remuneration is overly reliant on a single performance metric, benchmark profit before tax. A second performance criteria will be used in the coming year. We note that the Company has adjusted ...
Leadership changes Vittorio Colao was succeeded by Nick Read who was appointed Chief Executive Designate on 27 July 2018 and became Chief Executive on 1 October 2018. Margherita Della Valle joined the Board as Chief Financial Officer on 27 July 2018. Item 15: Advisory vote on the Remuneration ReportThe structure is unsatisfactory. The maximum bonus and total incentive pay exceed guidelines. The quantum for the year was excessive. Pay weighted more towards rewarding long-term performance, but there are overlapping performance conditions as free cash flow was used for both the STI and LTI. A b...
Item 2: Approve the Remuneration ReportThe structure is unsatisfactory as the use of qualitative criteria exceeds guidelines and the pension is excessive. Qualitative criteria slightly exceeds ECGS guidelines. There is no disclosure of targets of the metrics for the STI and a bonus was paid though the Company made a loss for the year. A recruitment award was paid during the year. We recommend shareholders oppose. Item 3: Approve the Remuneration PolicyGiven that the pension contribution will be reduced to within ECGS guidelines, the main concern at the Company is the use of qualitative criter...
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