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Jan 13, 2023

The week in investor relations: Vanguard’s ESG pushback, shareholder vote cuts Apple CEO pay and investors worry over China’s ESG score

Our pick of the IR stories from around the web you might have missed this

– Vanguard Group’s decision last month to quit a key climate change coalition underscores how the retail investors who dominate its client base focus less on ESG priorities than institutional investors, Reuters (paywall) reported in an analysis piece. Vanguard said last month it would drop out of the Net Zero Asset Managers initiative, whose members commit to making their investment portfolios emission-neutral by 2050. It said 80 percent of its close to $8 tn in assets are in its index funds, which primarily attract retail investors.

– Apple CEO Tim Cook will receive a pay cut in 2023 to $49 mn in total compensation, the company said in a filing with the SEC. CNBC reported that Cook requested the change, following a shareholder vote on his pay package. The company also reduced the number of restricted stock units Cook would receive if he retires before 2026. In 2022, Cook made just under $83 mn in stock awards, $12 mn in incentives and $3 mn in salary. He also received benefits including retirement plan contributions, security, personal air travel and more than $46,000 in vacation cash-out.

– According to Al Jazeera, the SEC charged former McDonald’s chief executive Stephen Easterbrook with making false and misleading statements to investors about the circumstances of his 2019 termination. The SEC hit Easterbrook with a five-year officer and director bar and a $400,000 civil penalty. McDonald’s fired Easterbrook in November 2019 for exercising ‘poor judgment’ by engaging in a relationship with a McDonald’s employee, the SEC said.

– The collapsed cryptocurrency exchange FTX has located more than $5 bn (£4.1 bn) of assets, the BBC reported. But a US bankruptcy court was told earlier this week that the extent of losses to customers is still not known. Prosecutors have accused FTX’s former chief executive Sam Bankman-Fried of orchestrating an ‘epic’ fraud that may have cost investors, customers and lenders billions of dollars. Bankman-Fried has pleaded not guilty to charges he cheated investors.

– China’s ESG scores are among the lowest in the world, which could become a concern for investors wishing to increase their exposure to the country’s economic revival after the Covid-19 pandemic, reported The Print via AsianInvestor. As per the news report, China’s ESG rating and its obfuscation on ethnic repression and forced labor in the western regions of the country are the issues faced by the country.

– In more news from the region, CNN reported that stocks in Asia started 2023 in a bull market. Investors have been cheered by China’s move away from its zero-Covid policy, the ending of its crackdown on tech companies and Beijing’s renewed commitment to growing the world’s second-biggest economy. The MSCI Asia Pacific index, which excludes Japanese companies, jumped 2.5 percent during Tuesday trading. That’s up 24.6 percent since its most recent low on October 24, 2022. The rally has been driven by a rebound in investor sentiment toward Chinese stocks.

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