Highlights from 
the world of Proxy Papers you can’t afford to miss: Amazon.com Inc., Goldman Sachs Group Inc. Chesapeake Lodging Trust, Spark Infrastructure Group, Sydney Airport and Li & Fung Limited.
Amazon.com, Inc.
NASDAQ – May 17, 2016
Over the past several years, reports have surfaced regarding the working conditions for Amazon.com employees. In 2013 and 2014, a number of reports surfaced alleging that Amazon.com had not provided proper compensation to employees working in its distribution centers and that those same workers faced harsh and unsafe working conditions. Additionally, in 2015 a high-profile New York Times article alleged that employees in the Company’s corporate office were subjected to a hostile work environment and were held to “unreasonably high” standards, leading to high employee turnover. Certain shareholders have taken notice of this pattern of reports concerning the Company’s working conditions, and at its 2016 annual meeting, have submitted a variety of shareholder proposals requesting increased disclosure of both Amazon’s sustainability and human rights considerations. It should be noted that the Company has improved certain aspects of its corporate reporting over the last year, providing more robust disclosure of its corporate political spending and the environmental initiatives undertaken by its Amazon Web Service division. However, shareholders will need to decide if this increased disclosure is sufficient to allow them to assess the company’s exposure to sustainability and human rights related risks.
Goldman Sachs Group Inc.
New York Stock Exchange – May 20, 2016
After receiving overwhelming support for its compensation program in the wake of substantial structural and disclosure-related changes announced ahead of the Company’s 2015 annual meeting, shareholders must now consider whether these structural features, however robust, can ultimately be expected to reign in compensation that is routinely granted at levels far exceeding peer levels. Furthermore, shareholders will likely wonder what, if any, impact, the Company’s recent agreement with the Residential Mortgage-Backed Securities Working Group to resolve claims relating to the securitization, underwriting and sale of residential mortgage-backed securities from 2005 to 2007 will have on executive compensation levels going forward, noting that certain of the Company’s current executives were in senior executive positions throughout that time period.
Chesapeake Lodging Trust
New York Stock Exchange – May 17, 2016
Currently, Chesapeake Lodging Trust shareholders do not have the ability to amend the Company’s bylaws through the submission of binding shareholder resolutions. In 2015, a shareholder proposal submitted by UNITE HERE requesting that the board grant shareholders this right received 49.3% shareholder support. The Company, which claims that UNITE HERE has only presented these proposals to “distract and annoy” management amidst a unionization fight surrounding hotels in San Francisco, has submitted a proposal allowing shareholders to amend the bylaws in response; however, these shareholders must own 0.015% (or approximately US$220,000 based on current market cap) in order to propose an amendment. This is a stark departure from the US$2,000 ownership threshold for submitting a non-binding shareholder resolution. Given this disparity, UNITE HERE has re-submitted its shareholder proposal. As such, at its 2016 meeting, shareholders will have to decide whether shareholders with a less significant stake in the company should have the ability to propose significant changes to Chesapeake Lodging Trust’s bylaws.
Spark Infrastructure Group
Australian Securities Exchange – May 20, 2016
2015 was a year of celebrations for Spark, winning a 15.01% equity stake in New South Wales electricity network company TransGrid and a successful A$405.4 million entitlement offer to fund the deal. But not everybody was ready to party. Former Credit Suisse banker James Dunphy and pal Michael Rhodes started a campaign against the Company in March 2016, after they considered prior engagement attempts to have failed, arguing that the typically conservative Spark did not follow its acquisition strategy and lost discipline in purchasing the TransGrid stake. They also believe that Spark’s NEDs and executives have been overpaid and do not own enough shares in the Company. As a result, Spark now has two non board-endorsed nominees on their proxy form up for election at the upcoming meeting. At last year’s AGM, the Company missed a first strike by the skin of its teeth with 24.68% of poll votes against the remuneration report proposal. Despite some structural changes to the executive remuneration framework, the activist campaign suggests a first strike for the Company at this year’s AGM will remain a very real possibility. Institutional shareholders seem to have mixed feelings about the situation – some have increased their stakes in Spark following the TransGrid transaction, while others are doing the opposite as a relatively unchanged share price since the November transaction announcement suggests. Nonetheless, Spark still paid less to its NEDs and the CEO than its rival and unsuccessful bidder for TransGrid, AusNet Services, and the directors are confident that Spark will be able to pay out its debt and follow the distribution guidance going forward.
Sydney Airport
Australian Securities Exchange – May 20, 2016
In April 2014, the Australian Government proposed to build a second, full service international airport, for Western Sydney. Sydney Airport has a Right of First Refusal, which gives it the right to develop and operate a second major airport within 100 kilometers of Sydney’s CBD. Since September 30, 2014, the Company has been engaged in an ongoing formal consultation process with the Australian Government to evaluate whether it should exercise its right to be the primary developer and operator of the Western Sydney Airport. Shareholders will have an opportunity to ask questions about the risks and opportunities associated with the development of a second airport by the Company in the Western Sydney region at the upcoming AGM. Meanwhile, in September 2015, the Company managed to secure ownership of Terminal 3, the primary terminal for Qantas’ domestic operations since 1989 at Sydney airport, for A$535 million. Terminal 3 will become a common use terminal from June 30, 2019, with priority usage for Qantas.
Li & Fung Limited
The Stock Exchange of Hong Kong – May 19, 2016
At its 2013 AGM, Li & Fung put forth proposals for its authority to issue shares without preemptive rights (“general mandate”) and issuance of its repurchased shares, both of which only received approximately 56% shareholder approval. After receiving such a low level of shareholder support on the proposals, in 2014, Li & Fung reduced the proposed issuance size from 20% to 10%. However, the general mandate still did not disclose the maximum discount rate and the Company did not submit a proposal to issue repurchased shares at the 2014 AGM. Shareholders responded with only 59.8% shareholder approval on the general mandate proposal. While the proposal at the 2015 AGM received 67.4% shareholder approval, the 2016 AGM looks to continue the Company’s preferred approach of sticking to old habits that die hard rather than addressing underlying shareholder concerns, as it has again chosen not to disclose the maximum discount rate.