The week in investor relations: Big polluters brace for shareholder rebellions, drug-makers protect vaccine IP and the ‘culture war’ invades proxy season
– Some of the world’s largest corporate emitters face the prospect of a shareholder rebellion this month, with climate-related votes poised to spike throughout the proxy season, CNBC reported. Oil and gas majors on both sides of the Atlantic are scheduled to hold their AGMs in the coming weeks, with existing climate strategies up for votes alongside a range of investor-led resolutions targeting emissions reductions. Norway’s Equinor and Britain’s BP held their respective AGMs this week. UK-based Shell will hold its annual shareholder meeting on May 24 and France’s TotalEnergies’ AGM will take place on May 25.
– Investors failed in their attempts to make Pfizer, Johnson & Johnson and Moderna share their vaccine intellectual property (IP) to accelerate the distribution of Covid-19 jabs, reported the BBC. The drug-makers said they are making doses faster than they can be used but a third of the global population have still not had a single dose, the World Health Organization said. Only 24 percent of Moderna investors supported the company undertaking a feasibility study into transferring IP and technical know-how to manufacturers in low and middle-income countries. Only 27.3 percent of Pfizer shareholders backed a similar motion. The proposal also failed at Johnson & Johnson, though no numbers have yet been released.
– The so-called ‘culture war’ has spread to the proxy season, according to USA Today. At the Wells Fargo annual meeting in April, a conservative activist presented a shareholder proposal that would force the bank to disclose more information about its charitable giving and warned company leaders against engaging in the kind of LGBTQ advocacy that prompted Florida Governor Ron DeSantis to repeal Walt Disney’s special tax privileges just days earlier. Wells Fargo shareholders rejected the measure by a wide margin, but that has not stopped conservative activists. Two groups – the National Legal and Policy Center and the National Center for Public Policy Research – are making regular appearances this proxy season.
– Nearly half of the top lawyers appointed at the 500 biggest companies in the US in 2021 were female, a sign of some diversity progress across large corporate legal departments, according to a Reuters (paywall) report on research by Russell Reynolds Associates. Fifty-nine Fortune 500 companies named new general counsel last year – and 29 of those were women. This 49 percent figure exceeded the 42 percent of total Fortune 500 general counsel appointed in 2020 who were female. Growing attention on social and racial justice, as well as increased turnover in the general counsel ranks due to Covid-19 may have spurred diversity increases since 2020, according to the report.
– Elon Musk came under investigation by US regulators over his alleged late public disclosure of his notable stake in Twitter, The Wall Street Journal (paywall) reported, citing insiders. The world’s richest man disclosed a 9.2 percent stake in the social media platform, worth nearly $3 bn, to the SEC on April 4, a delay of at least 10 days since surpassing the mandatory 5 percent threshold for revealing a shareholding. Musk’s filing also characterized his stake as passive, suggesting the multi-billionaire did not plan to take over Twitter or influence its management or business. Musk, 50, said today his $44 bn bid to take Twitter private is ‘temporarily on hold’ over the company’s spam and fake user accounts.
– An official from the UK’s finance ministry said rules may be needed to stop the risk of greenwashing arising from ‘totally unregulated’ ESG ratings used for investing in sustainable assets, Reuters reported. Adam Lyons, head of the ministry’s green finance unit, said greenwashing, or unsubstantiated claims about corporate ESG credentials, was a serious problem in financial markets. The ministry will this year work with the Financial Conduct Authority (FCA) and raters to understand the issues affecting the sector and whether it should be brought into the regulatory fold, Lyons said. The FCA said last year ESG ratings needed tighter oversight.
The Financial Times (paywall) reported that Europe’s biggest private equity group CVC Capital Partners stalled plans for a stock market listing in the first half of this year, with market turbulence standing in the way of a multi-billion-euro flotation it had hoped to carry out in June. The buyout group told analysts it expects its IPO, ‘a historic shift for a secretive firm that has been in private hands for three decades’, to take place this fall or early 2023. Less than $3 bn has been raised in traditional IPOs in Europe so far this year, compared with $32.7 bn in the same period last year, according to Dealogic.
– CEMEX expanded its executive compensation link to climate action to include more executive positions around the world, reported Agg-Net. The UK concrete producer announced that its executive variable compensation program, which includes progress on the company’s ambitious carbon-reduction goals as a variable, will be expanded to cover more than 4,500 executives worldwide. Beginning this year, the CO2 emissions component will have an impact ranging from -10 percent to +10 percent in the total cash payout of the annual executive variable compensation. The initiative is part of the company’s Future in Action program, which focuses on reducing the carbon footprint of CEMEX’s operations and products to become a net-zero CO2 company by 2050.
– AlphaSense, the New York-based market intelligence and search platform, announced its acquisition of Sentieo, a financial intelligence platform designed for the investment management industry. Sentieo will operate under its current management as a wholly owned subsidiary of AlphaSense and both companies’ customers will continue to receive the same products and services as before, AlphaSense said. ‘Over time each will be augmented with additional functionality and content based on the companies’ collective capabilities,’ said AlphaSense. ‘The acquisition allows AlphaSense to further accelerate product development based on the combined strengths of two of the industry’s most innovative development teams.’
– ‘One of the biggest challenges for corporate issuers is to acutely and strategically control their own ESG narrative,’ said Adam Frederick, global president of Morrow Sodali, when asked what the challenges are for shareholder engagement in 2022. Frederick spoke after the New York-headquartered corporate advisory firm announced on April 26 that TPG Growth, the middle market and growth equity platform of alternative asset firm TPG, had acquired a majority stake in the company. ‘Our partnership with TPG empowers us to make immense capital investments in talent, resources and technology, driving innovation and further professionalizing our real-time capital market intelligence, debt services, data-driven analytics, ESG advisory and tech-enabled solutions.’