0000012172 00000 n We use third party research, in addition to our own analysis, to evaluate existing and proposed compensation structures. We may also support a pill where it is the only effective method for protecting tax or other economic benefits that may be associated with limiting the ownership changes of individual shareholders. 2. On November 11, 2019, Institutional Shareholder Services (ISS) released its 2020 Proxy Voting Guidelines, which are generally effective for meetings on or after February 1, 2020. To signal our concerns, we may also vote against the chair of the nominating/governance committee, or where no chair exists, the nominating/governance committee member with the longest tenure. Similarly, SASB Standards enable robust implementation of the Integrated Reporting Framework, providing the comparability sought by investors. Comprehensive disclosures provide investors with a sense of the companys long-term risk management practices and, more broadly, the quality of the boards oversight. 0000042640 00000 n Required fields are marked *, You may use these HTML tags and attributes:

. hA vRW|d'XDsx9sx9 & endstream endobj 2037 0 obj <>/Metadata 345 0 R/Names 2038 0 R/Outlines 121 0 R/Pages 339 0 R/StructTreeRoot 347 0 R/Type/Catalog/ViewerPreferences<>>> endobj 2038 0 obj <> endobj 2039 0 obj >/PageTransformationMatrixList<0[1.0 0.0 0.0 1.0 -306.0 -396.0]>>/PageUIDList<0 544>>/PageWidthList<0 612.0>>>>>>/Resources<>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/StructParents 0/Thumb 307 0 R/TrimBox[0.0 0.0 612.0 792.0]/Type/Page>> endobj 2040 0 obj <> endobj 2041 0 obj <>stream Companies should disclose the steps they are taking to advance diversity, equity, and inclusion; job categories and workforce demographics; and their responses to the U.S. We encourage the company to explain their executive succession planning process, including where accountability lies within the boardroom for this task, without prematurely divulging sensitive information commonly associated with this exercise. In the event of a proposal for are verse split that would not proportionately reduce the companys authorized stock, we apply the same analysis we would use for a proposal to increase authorized stock. We actively engage in ongoing shareholder public debates over proxy-related issues such as Please read the prospectus and summary prospectus carefully before investing. Our publicly available commentary provides more information on our approach to HCM. 2023 Dodge & Cox. The materials on this website are for illustration and discussion purposes only and do not constitute an offering. While we will typically support proposals requesting board de-classification, we may make exceptions, should the board articulate an appropriate strategic rationale for a classified board structure. 0000013568 00000 n Our view of independence may vary from listing standards. We encourage companies to provide transparency around risk management, mitigation, and reporting to the board. The roles and responsibilities cited here are not all-encompassing and are noted for reference as to how these leadership positions may be defined. 0000004677 00000 n Nonetheless, in situations where there is a substantial or dominant shareholder, supermajority voting may be protective of minority shareholder interests, and we may support supermajority voting requirements in those situations. (go back), Your email is never published nor shared. At the board level, appropriate governance structures and responsibilities allow for effective oversight of the strategic implementation of material sustainability issues. Continue to $country-name$ Individual Investor site. We look to companies to disclose short-, medium-, and long-term targets, ideally science-based targets where these are available for their sector, for Scope 1 and 2 greenhouse gas emissions (GHG) reductions and to demonstrate how their targets are consistent with the long-term economic interests of their shareholders. Key updates for the 2020 proxy season include: Problematic Governance Structure Newly Public Companies. The integrity of financial statements depends on the auditor effectively fulfilling its role. Without a voting mechanism to immediately address concerns about a specific director, we may choose to vote against the directors up for election at the time (see Shareholder rights for additional detail). In cases where a board unilaterally adopts exclusive forum provisions that we consider unfavorable to the interests of shareholders, we will vote against the Independent Chair or Lead Independent director and members of the nominating/governance committee. In our letter on unequal voting structures, we articulate our view that one vote for one share is the preferred structure for publicly-traded companies. jxD NyA%oIL.Mr`sjk BCy +MX |. |_j l3 endstream endobj 2075 0 obj <>/Filter/FlateDecode/Index[347 1689]/Length 63/Size 2036/Type/XRef/W[1 2 1]>>stream These guidelines should be read in conjunction with the BlackRock Investment Stewardship Global Principles. We may oppose plans that provide for the acceleration of vesting of equity awards even in situations where an actual change of control may not occur. Nicholas J. As a best practice, companies with either a majority vote standard or a plurality vote standard should adopt a resignation policy for directors who do not receive support from at least a majority of votes cast. Further, if a company qualifies as an emerging growth company (an EGC) under the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), we will give consideration to the NYSE and NASDAQ governance exemptions granted under the JOBS Act for the duration such a company is categorized as an EGC. 0000024781 00000 n Our publicly available commentary provides more information on our approach to corporate political activities. 0000042951 00000 n Where a poison pill is put to a shareholder vote by management, our policy is to examine these plans individually. Environmental, Social, and Governance (ESG) Integration. The board should exercise appropriate oversight of management and the business activities of the company. (go back), 9Special situations are broadly defined as events that are non-routine and differ from the normal course of business for a companys shareholder meeting, involving a solicitation other than by management with respect to the exercise of voting rights in a manner inconsistent with managements recommendation. SASBs [14] industry-specific metrics are beneficial in helping companies identify key performance indicators (KPIs) across various dimensions of sustainability that are considered to be financially material. WebIn the first half of 2022, we updated our proxy voting guidelines to enhance our commitments in three key areas: Board diversity, climate-related accountability, and cross-shareholding. We also generally oppose plans that allow for repricing without shareholder approval. 0000012767 00000 n Relevant shareholder proposals are assessed on a case-by-case basis. BIS will generally not support these proposals. Introducing the possibility of such reimbursement may incentivize disruptive and unnecessary shareholder campaigns. Companies should have an established process for identifying, monitoring, and managing business and material risks. Finally, pension contributions and other deferred compensation arrangements should be reasonable in light of market practices. 0000015446 00000 n We generally support such proposals unless the agenda contains items that we judge to be detrimental to shareholders best long-term economic interests. Shareholders should have the opportunity to participate in the annual and special meetings for the companies in which they are invested, as these meetings facilitate an opportunity for shareholders to provide feedback and hear from the board and management. These may include instances where shareholders nominate director candidates, oppose the view of management and/or the board on mergers, acquisitions, or other transactions, etc. Clear and consistent disclosures on these matters are critical for investors to make an informed assessment of a companys HCM practices. We will also evaluate whether there is general consistency between a companys stated positions on policy matters material to their strategy and the material positions taken by significant industry groups of which they are a member. 0000004157 00000 n We generally do not support shareholder proposals seeking the reimbursement of proxy contest expenses, even in situations where we support the shareholder campaign. 2023 Renaissance Technologies LLC. Examples of social issues include, but are not limited to, human capital management, impacts on the communities in which a company operates, customer loyalty, and relationships with regulators. Institutional Shareholder Services (ISS) and Glass Lewis, the leading proxy advisors in the United States, have announced updates and clarifications for their voting guidelines for the 2022 proxy season. We recognize that some companies may report using different standards, which may be required by regulation, or one of a number of private standards. This better macro environment will support better economic growth, financial stability, job growth, productivity, as well as ecosystem stability and health outcomes. Board Management for Education and Government, Internal Controls Over Financial Reporting (SOX), statement in 2018 by Keith Johnson and Cynthia Williams. These guidelines are divided into eight key themes, which group together the issues that frequently appear on the agenda of shareholder meetings: An effective and well-functioning board is critical to the economic success of the company and the protection of shareholders interests, inducting the establishment of appropriate governance structures that facilitate oversight of management and the companys strategic initiatives. 0000050955 00000 n We evaluate a number of factors, which may include: the qualifications and past performance of the dissident and management candidates; the validity of the concerns identified by the dissident; the viability of both the dissidents and managements plans; the ownership stake and holding period of the dissident; the likelihood that the dissidents strategy will produce the desired change; and whether the dissident represents the best option for enhancing long-term shareholder value. WebThis Policy is overseen by the Proxy Voting and Governance Committee (Proxy Voting and Governance Committee or Committee), which provides oversight and includes senior representatives from Equities, Fixed Income, Responsibility, Legal and Operations. We may decide to support a shareholder proposal requesting additional disclosures if we identify a material inconsistency or feel that further transparency may clarify how the companys political activities support its long-term strategy. 'Td9m by]Z`!,RsLfX f i,^ptO+P7,CO }mT/>E9( We generally view golden parachutes as encouragement to management to consider transactions that might be beneficial to shareholders. [15] It is, of course, up to each company to define their own strategy: that is not the role of BlackRock or other investors. Companies should disclose the rationale for their selection of primary listing, country of incorporation, and choice of governance structures, particularly where there is conflict between relevant market governance practices. If the relevant standards are silent on the issue under consideration, we will use our professional judgment as to what voting outcome would best protect the long-term economic interests of investors. A classified board structure may also be justified at non-operating companies, e.g., closed-end funds or business development companies (BDC),[3] in certain circumstances. Where a company has failed to appropriately provide robust disclosures and evidence of effective business practices, BIS may express concerns through our engagement and voting. Increasingly, we see leading boards adding members whose experience deepens the boards understanding of the companys customers, employees, and communities. Proxy Voting Guidelines: TRPIM. Where we determine that a board has failed to do so in a way that may impede a companys long-term value, we may vote against the responsible committees and/or individual directors. These guidelines provide an overview of how ISS approaches proxy voting issues for subscribers of the Sustainability Policy. We may vote against certain directors where changes to governing documents are not put to a shareholder vote within a reasonable period of time, particularly if those changes have the potential to impact shareholder rights (see Director elections). Nonetheless, we may support the proposal where the company: Increase in authorized common shares BIS will evaluate requests to increase authorized shares on a case-by-case basis, in conjunction with industry-specific norms and potential dilution, as well as a companys history with respect to the use of its common shares. 0000042449 00000 n We acknowledge that these factors may also play into the various elements of diversity that a board may attract. 3 - vested Artisan Partners with proxy voting authority or has reserved or delegated that responsibility to another designated person; and - adopted a proxy voting policy that Artisan Partners is required to follow. BIS recognizes that climate change can be challenging for many companies, as they seek to drive long-term value by mitigating risks and capturing opportunities. In his frustration, he lit his bottle on fire and threw it away, causing the fire to break out. WebEXECUTIVE SUMMARY Policy Updates for 2023 W W W . The most common form of ESPP qualifies for favorable tax treatment under Section 423of the Internal Revenue Code. We will normally support proposals seeking to introduce bylaws requiring a majority vote standard for director elections. An offering may be made only by delivery of a confidential offering memorandum to appropriate investors. 0000012093 00000 n Where we conclude that a company has failed to align pay with performance, we will vote against the management compensation proposal and relevant compensation committee members. An EGC should have an independent audit committee by the first anniversary of its IPO, with our standard approach to voting on auditors and audit-related issues applicable in full for an EGC on the first anniversary of its IPO. Review details of firms position on all major proxy voting issues. Lastly, we look for shareholder approval of poison pill plans within one year of adoption of implementation. [16] Yet, the path ahead is deeply uncertain and uneven, with different parts of the economy moving at different speeds. Employee stock purchase plans (ESPP) are an important part of a companys overall human capital management strategy and can provide performance incentives to help align employees interests with those of shareholders. Although we have historically opposed most plans, we may support plans that include a reasonable qualifying offer clause. Such clauses typically require shareholder ratification of the pill and stipulate a sunset provision whereby the pill expires unless it is renewed. If you have received an invitation, you must first create a login by following the link provided in the email sent to you. As used in these policies and procedures the term clients/beneficiaries means any Proxy Voting Policy . These disclosures should also include the accountability and voting mechanisms that would be available to shareholders. 1A public company executive is defined as a Named Executive Officer (NEO) or Executive Chair(go back), 2In addition to the company under review. We generally support management proposals to convert to a PBC if our analysis indicates that shareholders interests are adequately protected. Companies should also disclose any material supranational standards adopted, the industry initiatives in which they participate, any peer group benchmarking undertaken, and any assurance processes to help investors understand their approach to sustainable and responsible business conduct. HtPMO[1W>omK AT bPE4D4iT$\zfr]dW XM)sq= )b# ZKEES-hKl>&V;_!8?-Dh0Xc 9Td&1gXlfd6#:h!A8 lm%J\S U1 Mi[M {C/](gT%*B^yS Self identified board demographic diversity can usefully be disclosed in aggregate, consistent with local law. SASB standards will over time be adapted to ISSB standards but are the reference reporting tool in the meantime. At this stage, we view Scope 3 emissions differently from Scopes 1 and 2, given methodological complexity, regulatory uncertainty, concerns about double-counting, and lack of direct control by companies. WebPROXY VOTING GUIDELINES The fundamental precept followed by Northern Trust in voting proxies is to ensure that the manner in which shares are voted is in the best interest of clients/beneficiaries and the value of the investment. We acknowledge that the use of peer group evaluation by compensation committees can help calibrate competitive pay; however, we are concerned when the rationale for increases in total compensation is solely based on peer benchmarking. However, in these instances, boards should periodically review the rationale for a classified structure and consider when annual elections might be more appropriate. IA-2106, at n. 2 and accompanying text (Jan. 31, 2003) (Proxy Voting Release), citing SEC v. Capital Gains We also recognize that continued investment in traditional energy sources, including oil and gas, is required to maintain an orderly and equitable transitionand that divestiture of carbon-intensive assets is unlikely to contribute to global emissions reductions. 0000008767 00000 n However, we may vote against the appropriate committees and/or individual directors if, in our view, the board is ineffective in its oversight, either because it is too small to allow for the necessary range of skills and experience or too large to function efficiently. Payouts to executives should reflect both the executives contributions to the companys ongoing success, as well as exogenous factors that impacted shareholder value. Compensation for directors should generally be structured to attract and retain directors, while also aligning their interests with those of shareholders. [4] However, BIS may vote against the most senior non-executive member of the board when appropriate independence is lacking in designated leadership roles. , pension contributions and other deferred compensation arrangements should renaissance technologies proxy voting guidelines reasonable in light of market.! Require shareholder ratification of the pill and stipulate a sunset provision whereby the pill and stipulate a sunset whereby. Have received an invitation, you must first create a login by following the link provided in the email to... Position on all major proxy voting issues whereby the pill and stipulate a sunset whereby! Proposals are assessed on a case-by-case basis, to evaluate existing and proposed compensation structures provide an overview of ISS! 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