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Expert Corporate Governance Service (ECGS)

Experian, 24 July 2019

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 ...

Expert Corporate Governance Service (ECGS)

Vodafone Group, 23 July 2019

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...

Expert Corporate Governance Service (ECGS)

British Land Co, 19 July 2019

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...

Expert Corporate Governance Service (ECGS)

Linde, 26 July 2019

The Company was formed in October 2018 by the merger of Linde AG of Germany and Praxair of the United States through an all-stock merger transaction. The new holding company is listed on both the New York Stock Exchange, Frankfurt Stock Exchange and the London Stock Exchange. The new holding company is incorporated in Ireland while its principal governance activities, including board meetings, will primarily be based in the UK.  Items 1a - 1l: Re-elect the Board of Directors The Board of the company is currently comprised of twelve directors, six of whom are former Praxair directors, includin...

Expert Corporate Governance Service (ECGS)

Mediclinic, 24 July 2019

Controlling shareholderShareholders should note that, unlike most UK companies, Mediclinic has a controlling shareholder. Remgro Ltd. owns 44.56% of the share capital. There is a relationship agreement in place whereby Remgro Ltd is entitled, for every 10% of the issued share capital held, to appoint a director to Board, up to a maximum of three. The appointment of a third director is subject to the Board maintaining a majority of independent Non-Executive Directors. Item 2: Advisory vote on the Remuneration ReportThe structure is satisfactory. Remuneration is weighted more towards rewarding ...

Expert Corporate Governance Service (ECGS)

Scottish & Southern Energy, 18 July 2019

Item 2: Approve the Remuneration Report The remuneration structure is unsatisfactory. First, the remuneration committee has the discretion to determine half of the bonus. Additionally, there is lack of disclosure of pension accrual rates and an excessive pension contribution was made in this year and the previous two years. Furthermore, dividend per share is used with both the STI and the LTI. Aside from being an overlapping performance condition, the use of dividend per share is not considered appropriate as executives have a certain level of control over the dividend payout and therefore can...

Expert Corporate Governance Service (ECGS)

GB Group PLC, 25 July 2019

Contrary to UK market practice, the Company does not have annual elections of directors. Elections are staggered and only two directors are standing in the current year. There are concerns over the composition of the Board. The Chairman, Mr. Rasche, undertakes some general and operational consultancy for the business through his consultancy business Rasche Consulting Ltd, for which he is given expenses by the Company. Furthermore, 50% of the Board are executives and only 33% are independent. There is insufficient independent representation on the Board. Item 5: Approve the Remuneration Report...

Expert Corporate Governance Service (ECGS)

Babcock Group PLC, 18 July 2019

Boatman Capital Research Activism The Company has been subject to criticism in two reports by Boatman Capital Research (Boatmann). The first report in October 2018 claimed that the Company had been systematically misleading investors by burying bad news about its performance, should overhaul its leadership, and has a poor relationship with its largest customer, the UKns Ministry of Defence. The second report in May 2019 claimed that the Company should write down the value of its Defence Support Group subsidiary, should overhaul its executive team, and called the Companyns corporate structure,...

Expert Corporate Governance Service (ECGS)

Royal Mail, 18 July 2019

Profit warning Royal Mail’s pre-tax profit has more than halved during the course of the financial year. Furthermore, as a result of Royal Mail issuing their own profit warnings regarding this, they saw their share price plummet by roughly 20%. Please see the attached report for further details. Item 2: Approve the Remuneration Report The remuneration structure is not satisfactory as the structure is not weighted more towards rewarding long-term performance. Instead, it is more heavily weighted toward the short term. The maximum bonus and benefits exceed guidelines. Accelerated vesting is p...

Expert Corporate Governance Service (ECGS)

Tenaris, 29 July 2019

Under ITEM 1, it is proposed that the shares be delisted from the Buenos Aires Stock Exchange ("BYMA") through a voluntarily withdrawal from listing pursuant to the rules of the Argentine National Securities Commission which permits the Company to delist from BYMA without making a delisting public tender offer. Shareholders who either vote against the proposed delisting from BYMA or are absent from the meeting will be entitled to exercise the right to have their shares repurchased by the company under the conditions of ITEM 2.Following the proposed delisting from BYMA, the company’s shares wil...

Jehanne Leroy

Soitec, 26 Juillet 2019

GOUVERNANCELa société n’est pas contrôlée ; pourtant, son conseil ne présente un taux d’indépendance que de 25% selon Proxinvest (33,33% selon la société). Cette situation est principalement due au pacte d’actionnaires conclu entre la société et ses 3 principaux actionnaires, BPIfrance, NSIG et CEA qui ont chacun 2 sièges au conseil (soit 17% du conseil chacun). Or, ils ne détiennent chacun que 11% du capital. Ils sont donc tous les 3 en surreprésentation. C’est cette surreprésentation et le manque d’indépendance du conseil qui explique que Proxinvest ne soutienne, pour chacun de ces 3 actionn...

Jehanne Leroy

Oeneo, 25 Juillet 2019

RémunérationsAu titre de l’exercice 2018-2019, une rémunération exceptionnelle sous forme d’actions gratuites a été attribuée au Directeur Général. S’il est compréhensible que le conseil ait souhaité récompenser son DG pour avoir su gérer au mieux la crise du prix du liège, il semble cependant, très généreux de lui octroyer une rémunération exceptionnelle supérieure à son bonus (111% du bonus annuel précisément). De plus, cette rémunération exceptionnelle représente 35% de son fixe, alors que la politique approuvée par les actionnaires lors de la précédente assemblée générale prévoyait un plaf...

Florian Béchaz

Wavestone, 25 Juillet 2019

Tout d'abord Proxinvest attire l'attention sur la nouvelle composition du conseil de Surveillance. En effet, à la suite de l'assemblée Générale, le conseil comportera d'après Proxinvest 4 membres indépendant sur 7 membres soit un taux d'indépendance de 57,14%. Ensuite, concernant les rémunérations des membres du Directoire, au regard des montants raisonnables et de la transparence, Proxinvest recommande de soutenir l'ensembles des résolutions concernant les rémunérations.

Expert Corporate Governance Service (ECGS)

Lundin Petroleum, 31 July 2019

In general, Lundin Petroleum is in compliance with the Swedish regulations relating to the organisation and procedures of the Extraordinary General Meeting. Under ITEMS7a-c and 8 approval is sought of a share swap transaction with Norway-based Equinor ASA. In ECGS view, the board of directors of Lundin Petroleum takes an advance on the Company’s future by increasing the level of indebtedness (by 15% up to approximately USD 3.9 billion proforma after the transaction) in exchange for (at this time) uncertain benefits (oil prices ever fluctuate, and production of the Johan Sverdrup field has no...

Expert Corporate Governance Service (ECGS)

Johnson Matthey, 17 July 2019

Item 2: Approve the Remuneration Report The structure is satisfactory, though the maximum bonus exceeds guidelines and accelerated vesting is possible. While the quantum is not excessive, the payout is not adequately aligned with performance as two metrics used for the STI paid out in full despite having been at or below target performance. The LTI is overly reliant on a single performance criterion, EPS. Over-reliance on EPS could result in management making decisions to maximize profits for the short term, often at the expense of long term shareholder value. EPS can be positively influenced ...

Expert Corporate Governance Service (ECGS)

Burberry, 17 July 2019

Leadership changesDuring the year, Mr. Gerard Murphy was appointed as Chairman following the retirement of Mr. Peace from the Board after sixteen years. Item 2: Approve the remuneration report The structure is weighted more towards rewarding long-term performance. However, potential incentive pay and benefits are excessive. Adjusted profit before tax determines 100% of the STI and 50% of the LTI, making incentive pay overly reliant on a single performance metric. (The recruitment award, made in the previous year, is not conditional on performance.) The quantum was excessive. We recommend share...

Expert Corporate Governance Service (ECGS)

Severn Trent PLC, 17 July 2019

Item 2: Approve the Remuneration ReportThe structure is satisfactory. Pay is weighted more towards rewarding long-term performance and it is not excessive. The use of qualitative metrics is within guidelines and the payout is adequately aligned with performance. The quantum is not excessive. We recommend shareholders vote in favor. Item 4: Approve the sharesave schemeThe details of the sharesave scheme, including the maximum amounts involved and the maximum discount, have not been disclosed in the notice of meeting. Instead the Company has made them available at their registered office and wi...

Florian Béchaz

Bastide le Confort Medical, 18 July 2019

Le sujet de cette Assemblée Générale est les changements au sein du conseil d’Administration. En effet, les sociétés Bpifrance et Irdi Soridec Gestion sont rentrées au capital de SIB, la holding familiale qui contrôle le Groupe Bastide.Dans un communiqué la société Bastide indique que « Bpifrance Investissement et Irdi Soridec Gestion participeront au Conseil d'Administration du Groupe Bastide ».Ainsi cette assemble voit la nomination de 4 nouveaux membrs. Cependant la société ne communique aucune information concernant ces candidats. Elle ne semblerait donc pas se conformer aux dispositions...

Expert Corporate Governance Service (ECGS)

DCC, 12 July 2019

Item 3: Approve the Remuneration Report The structure is unsatisfactory. Pay is not sufficiently weighted toward the long-term in ordinary circumstances. The ROCE targets for the LTI do not appear challenging given recent performance. The bonus is overly reliant on qualitative criteria. Both the bonus and the LTI are overly reliant on EPS. Over-reliance on EPS could result in management making decisions to maximize profits for the short term, often at the expense of long term shareholder value. EPS can be positively influenced through share buybacks, fluctuations in foreign exchange, or amendm...

Expert Corporate Governance Service (ECGS)

Banco Santander, 23 July 2019

The EGM is called to authorize the Board of Directors to increase the share capital to acquire all the shares of Santander México not held by the Santander Group (equal to 25% of the share capital) in an exchange offer. Santander México's shares are traded on the Bolsa Mexicana de Valores ("BMV"), and, by means of American Depositary Shares ("ADS") each representing 5 shares, on the New York Stock Exchange ("NYSE").The shareholders of Santander México will receive (a) 0.337 Banco Santander shares for each share held, or (b) 1.685 Banco Santander ADSs for each ADS. After the transaction, new Ba...

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