Our weekly list of the Proxy Papers you can’t 
afford to miss: NJS, Canon, HP, Swedbank, Schlumberger, Bank of East Asia, Italcementi, BP, Rio Tinto.
NJS CO., LTD.
TSE: 2325 – Meeting Date: March 30, 2016
The directors of NJS are expected to face tough questions from their shareholders at the upcoming shareholder meeting over the arrest of six of their employees for suspicion of bid-rigging in regards to sewage related projects in Chiba-City. The allegations have forced the Company to postpone their earnings release for fiscal year 2015 as a third-party committee continues to investigate the allegations, which are believed to be farther reaching than initially suspected. The Company has already announced that a special meeting will be convened once the Company has received the committee’s findings and the necessary audits have been conducted. While Glass Lewis, along with the Company’s shareholders, will not know the extent of the bid-rigging and its effect on the Company, we anticipate that concerns will be raised regarding the Company’s corporate governance structure and internal controls.
CANON INC.
TSE: 7751 – Meeting Date: March 30, 2016
It was only a few years ago that Canon Inc. used to have more than 20 members on its board of directors, all of whom were insiders. Since then, the Company has been taking steps to improve its corporate governance structure by reducing the size of the board and appointing outside directors. At Cannon’s 2016 annual shareholder meeting, the Company will be further downsizing their board by proposing only six directors, two of whom are designated as outside directors. As Japanese companies are notorious for closely observing the actions of other companies, we anticipate that Canon’s meeting may reflect some positive developments for the 2016 Japanese proxy season: the downsizing of boards of directors and more outside director representation.
HP INC.
NYSE: HPQ – Meeting Date: April 4, 2016
After years of back-and-forth, during 2015 Hewlett Packard Company completed its separation of its enterprise services and printers/devices segments. HP Inc., the smaller of the two new HPs focused on printing and PCs, will hold its first post-split meeting in early April, providing shareholders with a chance to weigh in on the new directors tasked with guiding a slimmer, more finely-tailored operation.
SWEDBANK AB
NASDAQ OMX Stockholm: SWED – Meeting Date: April 5, 2016
After the sudden firing of its CEO following allegations of illegal activity, Swedbank’s chairman is under pressure to prove that the rest of the board and shareholders were not unnecessarily left out of the loop. Questionable related party transactions and the unexplained departure of two other top executive have sparked further investigations, intrigue and allegations.
SCHLUMBERGER LIMITED
NYSE: SLB – Meeting Date: April 6, 2016
In March 2015, a non-U.S. subsidiary of Schlumberger Limited plead guilty to violating U.S. trade and economic sanctions while doing business in Iran and Sudan, resulting in a criminal fine of over $155 million, the largest ever imposed for a U.S. sanctions violation, and the forfeiture of $77.6 million in illegally obtained profits. At the 2016 annual meeting, shareholders will consider whether members of the board should be held responsible for oversight of these activities. Additionally, shareholders will consider whether an executive incentive scheme that relies in part on an adjusted EPS figure is appropriately designed to align pay with performance.
BIGLARI HOLDINGS INC.
NYSE: BH – Meeting Date: April 7, 2016
The Steak N’ Shake holding company has a unique ownership structure, with much of the Company’s shares held by funds managed by chairman and CEO Sarder Biglari through his investment subsidiary, Biglari Capital Corp. This circuitous ownership framework was a main source of concern for shareholders who launched a proxy contest at the 2015 annual meeting, and added to their concerns regarding poor stock performance and incentives paid to Mr. Biglari. At the 2016 annual meeting, shareholders will consider whether the board was acting in their best interests when in June 2015 bylaws were amended to, among other things, remove shareholders’ right to call special meetings.
INVESTA OFFICE FUND
ASX: IOF – Meeting Date: April 8, 2016
Faced with a planned sale of Investa’s external manager, an independent committee of Investa’s responsible entity elected to separately explore and pursue a potential strategic transaction. The agreement ultimately negotiated by that committee – the proposed sale to DEXUS Funds Management Limited – has been expressly opposed by the new owners of Investa’s manager, leading to conflicting recommendations to investors and a clear bifurcation of alternatives.
THE BANK OF EAST ASIA
HKEx: 0023 – Meeting Date: April 8, 2016
The Bank of East Asia received a letter from an investor addressing various concerns relating to the Company’s poor operating performance and certain ongoing corporate governance problems, bringing these issues to the fore at the AGM. The agenda of the annual meeting also presents proposals that Glass Lewis continues to find problematic from a governance perspective.
ITALCEMENTI S.P.A.
Borsa Italiana: IT – Meeting Date: April 8, 2016
For a company which joined the FTSE MIB blue chip index in October 2015, Italcementi continues to pursue questionable remuneration practices, with particular reference to the executive chairman Giampiero Pesenti, who is provided a severance indemnity at the end of each three-year mandate; this arrangement has seen Mr. Pesenti receive severance payouts in both 2010 and 2013, despite serving as executive chairman continuously since 2004. These concerns are cemented by the fact that the Pesenti family represents the Company’s controlling shareholder and as a result, may have sufficient voting rights to re-elect Mr. Pesenti to the board at the end of every term.
BP PLC
LSE: BP – Meeting Date: April 14, 2016
In common with oil & gas peers, low prices have wrecked havoc on BP’s financial performance and share price, and shareholders will consider whether executive pay has reflected the changing environment appropriately. Like many extractors, the Company has reduced performance targets for future awards to reflect revised expectations; however, the decision to also reduce cash flow targets on outstanding long-term awards in the final year of the performance period may raise eyebrows.
RIO TINTO plc
LSE: RIO – Meeting Date: April 14, 2016
FTSE 100 mining giant Rio Tinto proved no exception to the poorly performing commodities industry in 2015, with the commodity price rout resulting in a sharp drop in almost all financial measures, and shareholder returns, in 2015. Given such a deterioration in performance, it remains to be seen whether shareholders, whose wallets have been hit, are willing to stomach the rather more modest drop in executive pay, with bonuses reduced by 6.5%, and overall pay remaining well ahead of peers. Perhaps a sign of the contention ahead, and discontent amongst investors ranks, the Company has announced that CEO, Sam Walsh, will step down from his role on July 1, 2016.
These highlights come from the complete Proxy Paper research reports prepared by Glass Lewis for our clients. For more information and to learn how we provide institutional investors with expert analysis, accurate data and contextual proxy voting recommendations for all the companies in their portfolio, please visit the Proxy Research page. Individual companies who wish to read the full report can learn more on the Purchase Proxy Paper page.