The week in investor relations: Coinbase direct listing, record UK payout and call to end ‘box checking’ on ESG
– Cryptocurrency exchange Coinbase Global is planning a direct listing on Nasdaq, according to Investors’ Chronicle. The company is the largest US cryptocurrency exchange, where users can buy, sell and hold the cryptocurrencies Bitcoin and Ethereum. ‘It’s fair to say the listing document is not short on eyebrow-raising information,’ noted the publication: the company has no address and several legal cases ‘on the go’. Still, with around 46 mn users, Coinbase is a company ‘many will want to own stock in,’ Investors’ Chronicle stated.
– Billionaire hedge fund boss Sir Chris Hohn paid himself a UK record of £343 mn ($473), reported The Guardian, as his Children’s Investment (TCI) fund reported a 66 percent jump in profits. The paper said the ‘staggering amount’ is believed to be the highest annual amount ever paid to one person in Britain and equates to £940,000 a day. Last year TCI launched a campaign for ‘say on climate’ votes.
– Cevian Capital, Europe’s largest activist investor, said it will punish companies that fail to set ESG targets when deciding executive pay, in a move the Financial Times (paywall) reported Cevian believes will deter ‘ESG box checking’. The Swedish activist group, which oversees more than €10 bn, said it would use its vote at AGMs to call out groups that did not include ESG metrics in executive pay packages by 2022.
– Nasdaq wiped out its 2021 gains this week, reported MarketWatch. Markets are worried that President Joe Biden’s $1.9 bn fiscal stimulus plan will overheat the economy and cause inflation, reported the site, adding that ‘closely watched’ comments made by Federal Reserve chairman Jerome Powell ‘didn’t seem to satisfy anyone’. On a Wall Street Journal webinar, Powell said: ‘I would be concerned by disorderly conditions in markets or persistent tightening in financial conditions that threatens the achievement of our goals.’ MarketWatch noted that this was a change from last week where Powell said he welcomed rising long-term bond yields.
– CNBC reported that Senator Elizabeth Warren criticized share buybacks as market manipulation made to inflate executive pay, calling them a bad use of excess companies’ profits that could instead be reinvested in a business or its workers. In an interview she described buybacks as ‘nothing but paper manipulation’ and argued that they are a convenient way to pump residual corporate profits into the market to increase the wealth of the company’s top shareholders, which often include executives and corporate management.
– The UK’s pensions minister argued that pension funds should not divest from fossil fuel holdings, according to the FT, despite growing pressure to do so. In an interview with the paper, Guy Opperman described selling stocks ‘that make you look bad’ as ‘reverse greenwashing’ that does not ‘actually fix the problem’. Instead, he said there should be a partnership between pension funds and companies with a high-carbon footprint ‘as these companies transform themselves into clean-energy companies and find the solutions that we all need for net-zero.’
– Fix Price went public in London and Moscow, raising $1.7 bn, reported Bloomberg, and putting it on track to be the biggest listing from a Russian company in more than a decade, and the biggest ever for a Russian retailer. The country’s largest dollar-store chain priced 178 mn global DRs (GDRs) representing one ordinary share each, at the top end of an initial $8.75 to $9.75 range, according to the news agency. The retailer opened at $9.75 per GDR in London, matching the IPO price. Trading starts in Moscow on March 10.
– CNN reported that Rio Tinto chair Simon Thompson is stepping down over the company’s destruction of an ancient sacred Indigenous site in Australia. Thompson has told Rio Tinto’s board that he will not seek re-election in 2022, according to the company. ‘As chairman, I am ultimately accountable for the failings that led to this tragic event,’ Thompson said in a statement. Rio Tinto apologized for the demolition in June and cut bonuses for its former CEO Jean-Sébastien Jacques and two other senior executives. Months later and under pressure from investors, Jacques was forced to resign. Thompson said in his statement on Wednesday that the company has engaged with investors, the government and Indigenous communities to learn from the demolition of the caves.