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Shareholder Proposal Developments During the 2017 Proxy Season

Ronald O. Mueller and Elizabeth Ising are partners at Gibson, Dunn & Crutcher LLP. This post is based on a Gibson Dunn publication by Mr. Mueller, Ms. Ising, and Lori Zyskowski.

This post provides an overview of shareholder proposals submitted to public companies for 2017 shareholder meetings, including statistics and notable decisions from the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC”) on no-action requests.

I. Shareholder Proposal Statistics and Voting Results

A. Shareholder Proposals Submitted

1. Overview

For 2017 shareholder meetings, shareholders have submitted approximately 827 proposals, which is significantly less than the 916 proposals submitted for 2016 shareholder meetings and the 943 proposals submitted for 2015 shareholder meetings.

For 2017, across four broad categories of shareholder proposals—governance and shareholder rights; environmental and social issues; executive compensation; and corporate civic engagement—the most frequently submitted were environmental and social proposals (with approximately 345 proposals submitted).

The number of social proposals submitted to companies increased to approximately 201 proposals during the 2017 proxy season (up from 160 in 2016). Thirty-five social proposals submitted in 2017 focused on board diversity (up from 28 in 2016), 34 proposals focused on discrimination or diversity-related issues (up from 16 in 2016), and 19 proposals focused on the gender pay gap (up from 13 in 2016).

Environmental proposals were also popular during the 2017 proxy season, with 144 proposals submitted (up from 139 in 2016). Furthermore, there was an unprecedented level of shareholder support for environmental proposals this proxy season, with three climate change proposals receiving majority support and climate change proposals averaging support of 32.6% of votes cast. This compares to one climate change proposal receiving majority support in 2016 and climate change proposals averaging support of 24.2% of votes cast. As further discussed below, the success of these proposals is at least in part due to the shift in approach towards environmental proposals by certain institutional investors, including BlackRock, Vanguard and Fidelity.

2017 Proxy Season Review

Mark Manoff is Americas Vice Chair and Stephen W. Klemash is a Partner with the EY Center for Board Matters. This post is based on a publication from the EY Center for Board Matters by Mr. Manoff and Mr. Klemash.

Amid regulatory and legislative uncertainty, investors remain committed to holding boards, and themselves, to higher levels of accountability, transparency and engagement. The 2017 proxy season is marked by the launch of a historic US stewardship code and the emergence of proxy access as standard practice across large companies.

These developments unite many leading investors behind common governance and stewardship principles and encourage other investors to take a more active approach to stewardship responsibilities. They also grant investors more influence over the companies they own.

Where’s the focus this year?

Board diversity and gender pay equity are key themes in 2017. Investors and boards recognize diversity as a critical element to enhancing board effectiveness and corporate talent agendas. Environmental sustainability is also increasingly in the spotlight, with many investors viewing companies’ approaches to climate risk management through the lens of long-term value creation. Some investors are challenging unequal voting structures and virtual shareholder meetings based on signals that those practices may be on the rise. Meanwhile, investor support for director elections and executive pay programs is holding strong as companies continue to enhance their investor communications—both in the proxy and through direct engagement.

This post is based on the EY Center for Board Matters proprietary corporate governance database and ongoing conversations with investors and directors. [1]

Ni bonnes ni mauvaises sur le plan de la performance

Montréal, le 23 juin 2017 — Les actionnariats à catégories multiples ne nuisent pas à la performance à long terme des sociétés ouvertes, mais elles ne l’améliorent pas non plus, soutient une étude publiée en mai.

Réalisée pour le Council of Institutional Investors, cette étude mentionne que les structures d’actionnariat qui contiennent à la fois des actions ordinaires et des actions privilégiées avec des droits de vote inégaux n’ont ni augmenté ni réduit le rendement du capital investi annuel des entreprises entre 2007 et 2015.

La Banque Royale abolit 450 postes

21 juin 2017
La Presse canadienne, Radio-Canada

La Banque Royale du Canada (RBC) éliminera 450 postes, principalement au sein de son siège social, à Toronto, mais aussi dans d’autres bureaux de la région - le tout afin de moderniser ses installations.

« Nous consolidons (des activités) lorsque c’est nécessaire pour nous permettre de réinvestir dans des secteurs clés, comme le numérique et les nouvelles technologies, ainsi qu’à des endroits où le potentiel de croissance est élevé », a indiqué mercredi une porte-parole, Catherine Hudon, par courriel.

FAIR Canada Submits Brief to Parliamentary Standing Committee on Finance

June 19, 2017
FAIR Canada

FAIR Canada has submitted a brief to the Parliamentary Standing Committee on Finance regarding consumer protection and oversight in Relation to Schedule I Banks. FAIR Canada has been following the CBC Go Public investigation of improper sales practices at Canada’s banks, and like many, is concerned with the allegations made by former bank employees.

FAIR Canada’s Brief highlights factors that have led to an increasing need for objective advice by Canadians as well as the increasing level of trust placed by Canadians in their financial institutions to help them (in their best interests) meet their financial goals. However, it appears that there are firm-wide practices and compensation structures that prevent Canadians from receiving adequate advice including being sold unnecessary products or unsuitable investments that are not in their best interests.

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