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Expert Corporate Governance Service (ECGS)

BHP Billiton October 17th 2018

The Company operates as a Dual Listed Company (DLC). BHP Billiton plc is incorporated and listed in the UK while BHP Billiton Ltd is incorporated and listed in Australia. Samarco Incident Update  On 5 November 2015, one of Samarco’s tailings dams (Fundao) failed unexpectedly,releasing muddy tailings downstream, reaching and flooding certain communities andcausing 19 deceases, 700 people lost their homes and important damages to thesurrounded area. The Company holds 50% interest in this entity. BHP Billiton Brasil is among the defendants named in a number of legal proceedings initiated by in...

Expert Corporate Governance Service (ECGS)

Hargreaves Lansdown - Proxy Report - 11/10/2018

Item 3: Approve the Remuneration Report Although the quantum is not considered excessive, the structure is not satisfactory and alignment with performance has not been demonstrated. Performance pay does not have a long term orientation. Item 18: Approve political donations The amount requested exceeds the standard market authority and ECGS guidelines.

Expert Corporate Governance Service (ECGS)

KBC - proxy report- 04/10/2018

In general, KBC is in compliance with the Belgian regulations relating to the organisation and procedures of an Extraordinary General Meeting. Under ITEM 2.1, the board of directors seeks authorisation to increase the Company's share capital (without pre-emptive rights) up to a maximum nominal value of EUR 291 million. Under the authorisation, the board of directors is entitled to waive shareholders' pre-emptive rights and the authority will remain in effect for 5 years following the date of decision (i.e. until 2023). In aggregate, the authorisation requested is limited to 19.99% of the Comp...

Expert Corporate Governance Service (ECGS)

Koninklijke Philips - Proxy Report - 19/10/2018

Under agenda item 1 it is proposed to newly appoint Dr Harrison as a member of the Supervisory Board for a 4-year term. Dr Harrison is considered independent. We have no concerns over the proposed appointment of Dr Harrison and recommend approval. On 29 August 2018, the Company announced that it intended to increase the remuneration of the Supervisory Board members. An earlier proposal was withdrawn at the 2017 AGM due to objections from its shareholders. After holding discussions with many of its shareholders, the Company request its shareholders under agenda item 2 to approve a changed prop...

Expert Corporate Governance Service (ECGS)

Ashtead Group PLC - Proxy report-11/09/2019

Leadership Changes Paul Walker was appointed as Chairman Designate on July 2, 2018. He will assume therole of Chairman. The current Chairman, Christopher Cole, will retire from the Board on September 10, 2018, the day before the AGM. He is currently Chairman of the Nomination Committeeand we note that there is insufficient gender diversity on the Board. Item 2: Approve the Remuneration Report The structure is unacceptable. Although it is more weighted toward the long term, theweighting difference is minor. Furthermore, the maximum bonus exceeds guidelines andthe quantum is excessive. Accel...

Expert Corporate Governance Service (ECGS)

Berkeley Group Holdings PLC - Proxy report- 05/09/2018

The Company has paid a dividend in respect of the financial year, however no resolution to approve the distribution has been proposed at the general meeting. Item 2: Approve the Remuneration Report The remuneration structure is not considered acceptable, primarily as the maximum variable remuneration is excessive. The LTIP is fully determined by shareholder returns which are under the control of executives. Performance metrics are not considered sufficiently challenging and we note that the ROE target has been lowered for the coming year. Alignment with performance has not been definitively ...

Charles Pinel

Covivio - Proxy report -06/09/2018

This general meeting is mainly called in the context of the project of merger by incorporation of Beni Stabili by Foncière des Régions (resolutions 1 to 4). It will also be proposed to adopt “Covivio” as new corporate name of the company (resolution 5).

Charles Pinel

Covivio - Proxy report- 06/09/2018

Cette assemblée générale a pour principal objet l'approbation du projet de fusion par voie d’absorption de la société cotée Beni Stabili dont FDR détient actuellement 59,87% du capital. Cette opération apparait stratégiquement pertinente car elle permettra au groupe de renforcer son exposition géographique sur un marché italien prometteur et de simplifier sa structure. Les conditions financières sont raisonnables et l’impact en terme de gouvernance neutre. Par conséquent, nous recommandons l’approbation de l’opération (résolutions 1 à 4). Il est également proposé deux modifications statutaire...

Expert Corporate Governance Service (ECGS)

Fiat Chrysler Automobiles NV - Proxy report - 07/09/2018

The EGM (item 2) is called to ratify the appointment of Mr. Michael Manley as Group CEO, in place of Mr. Sergio Marchionne, who died on July 25. Mr. Manley joined DaimlerChrysler in 2000 as Head of Network Development in the UK. He was Head of Jeep brand since June 2009, after the acquisition of Chrysler by Fiat Group, and Head of Ram brand since October 2015. Mr. Manley was appointed as Group CEO on 21 July 2018, and COO of EMEA division on July 23. He does not currently hold any external position. As we have not identified any specific concerns on the appointment of Mr. Manley as CEO of FC...

Expert Corporate Governance Service (ECGS)

Ashtead Group PLC - Proxy Report - 11/09/2018

Leadership Changes Paul Walker was appointed as Chairman Designate on July 2, 2018. He will assume the role of Chairman. The current Chairman, Christopher Cole, will retire from the Board on September 10, 2018, the day before the AGM. He is currently Chairman of the Nomination Committee and we note that there is insufficient gender diversity on the Board. Item 2: Approve the Remuneration Report The structure is unacceptable. Although it is more weighted toward the long term, the weighting difference is minor. Furthermore, the maximum bonus exceeds guidelines and the quantum is excessive. A...

Expert Corporate Governance Service (ECGS)

Colruyt - Proxy report - 26/09/2018

In general, Colruyt is in compliance with the Belgian regulations relating to the organisation and procedures of the Annual General Meeting. Under ITEM 1, approval is sought for the report of the board of directors. Since ECGS has serious concerns over (executive) compensation and corporate governance at Colruyt, it recommends to vote OPPOSE. Under ITEM 2, the board of directors seeks approval for the Company's remuneration report. In light of insufficient disclosure and other concerns with regard to the executive compensation package, ECGS recommends to vote OPPOSE. Under ITEM 5, approval ...

Expert Corporate Governance Service (ECGS)

Investec PLC - Proxy report - 08/08/2018

The Company operates a dual listed company structure. Standard UK shareholder rights apply to Investec plc shareholders. Investec Ltd is incorporated and listed in South Africa. A Special Voting Share enables the shareholders of Investec plc to vote on the resolutions proposed at meetings of Investec Ltd, and has the equivalent number of votes as the number of ordinary shares in issue of Investec Ltd as at the meeting date. For this reason, we have provided voting recommendations for those resolutions proposed to Investec Plc shareholders and Investec Ltd shareholders. Leadership Changes As ...

Expert Corporate Governance Service (ECGS)

National Grid - Proxy report - 30/07/2018

Leadership changes On July 29, 2018, Andrew Bonfield, Finance Director, resigned. Item 15: Approve the Remuneration Report The structure is weighted more towards rewarding long-term performance. Thoughslightly mitigated by the salary rate, actual and potential incentive pay is excessive, accelerated vesting in the event of a change of control is possible and there are overlapping performance metrics. Both the STI and LTI use ROE as a performance metric. Additionally, the Value Growth metric used to determine half of the LTI may incentivize acquisitions as it includes goodwill.

Expert Corporate Governance Service (ECGS)

United Utilities Group - Proxy report- 27/07/2018

Item 3: Approve the Remuneration Report Structure is weighted more heavily towards short-term performance. Furthermore, the LTI is linked with dividend payments, which is not considered appropriate as executives can potentially influence the payout level. However, the quantum is not excessive and even maximum potential amounts are moderate. The LTI includes relative TSR as a performance metric. Items 14 and 15: Re-appoint KPMG and authorise the Board to approve their remuneration Non-audit fees are considered excessive on a three year aggregate basis and may undermine auditor independence.

Expert Corporate Governance Service (ECGS)

Vodafone Group PLC - Proxy report - 27/07/2018

Leadership Changes The current CEO, Vittorio Colao, has resigned, though he will continue with the Companyuntil September 30, 2018. On October first, Nick Read, current Chief Financial Officer,will assume the role of CEO while Margherita Della Valle, currently Deputy Chief Financial Officer, will suceed Mr. Read as CFO. Item 15: Approve the Remuneration Report The structure is weighted more towards rewarding long-term performance. However,both potential and actual incentive pay was excessive. Furthermore, there are overlapping performance conditions as FCF was used for both the STI and LTI.

Jehanne Leroy

Johnson Matthey PLC - Proxy report 26/07/2018

Item 2: Approve the Remuneration Report The structure is satisfactory, though the maximum bonus exceeds guidelines and accellerated vesting is possible. While the quantum is not excessive, the payout is not adequately aligned with performance as the STI targets are not challenging. The LTI is overly reliant on a single performance criterion. Furthermore, EPS is not considered an appropriate metric given that it can potentially be influenced by executives. Item 13: Appoint the auditors It is proposed to rotate the auditors and appoint PricewaterhouseCoopers. KPMG (and its predecessor entitie...

Expert Corporate Governance Service (ECGS)

Royal Mail - Proxy report 19/07/2018

Leadership Changes Moya Greene resigned as CEO and Rico Back was appointed as the new CEO on June 1, 2018. Item 2: Approve the Remuneration Report Though the STI appears to link pay with performance and the quantum is not excessive, the structure is not weighted more towards rewarding long-term performance. Instead, it is more heavily weighted toward the short term. The maximum bonus, pension and benefits exceed guidelines. Accelerated vesting is possible. 50% of the LTI vests at threshold performance, which exceeds market practice. Item 9: Re-elect the Chairman His potential aggregate ti...

Expert Corporate Governance Service (ECGS)

Halma PLC - Proxy report 19/07/2018

While there are no major concerns over the structure of pay, the level of disclosure is concerning. In order to fully evaluate the alignment of pay with performance, whether targets are challenging and the fairness of pay at different levels and groups in the Company, clear disclosure is important. Furthermore, it is not in the shareholders' interest if the Company's disclosures are not fully compliant with legal requirements. The Company has not explianed the reason why it does not want to disclose ex-ante STI targets. Item 6: Re-elect the CEO The CEO is a member of the Nomination Committee...

Expert Corporate Governance Service (ECGS)

Experian Group - Proxy report 18/07/2018

Item 2: Approve the Remuneration Report 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. Actualy incentive pay during the year was more than double the ECGS limit. Furthermore, variable remuneration is overly reliant on a single performance metric, benchmark profit before tax. Item 9: Re-elect the Chairman Mr. Robert was not considered independent upon appointment as he formerly served as CEO of the Company. ...

Expert Corporate Governance Service (ECGS)

Severn Trent PLC - Proxy report 18/07/2018

Item 3: Approve the Remuneration Policy The structure is satisfactory. The maximum bonus, though increased, is still within ECGS guidelines as is the use of qualitative criteria. Incentive pay is more weighted toward the long term and total incentive pay is not excessive given the market. The increased holding period for the LTIP and the increased shareholding requirements will serve to further align executives' interests with the long-term shareholder interests. Item 4: Amend the LTI While the use of only one performance metric does not meet market practice and the peer group to which RoRE...

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