Highlights from the world 
of Proxy Papers you can’t afford to miss: CBS Corporation, Telecom Italia S.p.A., Exxon Mobil Corporation., Ltd., Dassault Systèmes SE, iRobot Corporation, Coca-Cola Enterprises, Inc.
CBS Corporation
NYSE – May 26, 2016
It’s a legal battle that could have been plucked from the script of “The Young and the Restless”: an aging founder in questionable health is exiled to his Beverly Hills mansion while his children, grandchildren, former girlfriends and other hangers-on make a play for his fortune — and for control over two of the largest media companies in the world. The balance of power at CBS and Viacom, both controlled by Sumner Redstone via his stake in National Amusements, will shift significantly if and when the magnate relinquishes control of his empire to the family trust set up to guide his successors. Now that testimony related to Redstone’s competency has revealed his severely reduced ability to communicate, how long he remains on the board is also in question. Amidst this drama, shareholders at the 2016 annual meeting will weigh the decisions of the compensation committee in setting lucrative pay packages for Les Moonves and other top executives. While the compensation for Mr. Redstone, now chairman emeritus, was slashed significantly due to reduced responsibilities, Mr. Moonves continues to rake in over $50 million per year, including a $19 million cash bonus for 2015. Shareholders may also note that, contrary to the name of its flagship soap opera, the CBS board has one of the highest average director tenures in the S&P 500 at 13 years, and an average age of 75.5 – the old and the entrenched, perhaps?
Telecom Italia S.p.A.
Borsa Italiana – May 25, 2016
In an AGM season where many companies are facing angry calls over executive pay, Telecom Italia should nonetheless set notification lights flashing. That’s because the board of directors is responding not only to shareholders, but also to concerns raised by the company’s own board of statutory auditors (“BOSA”). The BOSA took the highly unusual (but non-binding) step of expressing an unfavourable opinion of new CEO Flavio Cattaneo’s compensation, which will include a €40 million “special award” and a €2.5 million sign-on bonus on top of his normal pay package. In addition, the BOSA expressed concerns over changes to the bonus opportunity for the executive chairman, which will increase threefold in connection with an apparent splicing of his role within the group’s management structure. The board of directors addressed but ultimately dismissed the board of statutory auditors’ concerns, and appears ready to dismiss shareholder concerns as well: if a proposal covering the use of equity in Cattaneo’s special award is rejected, the board has expressed its intent to go ahead with the award anyway, but settled in cash.
Exxon Mobil Corporation
NYSE – May 25, 2016
The agenda for Exxon Mobil’s 2016 annual meeting includes 11 shareholder proposals — the most shareholder proposals to go to a vote at any U.S. company during the 2016 season. The most high-profile of these proposals is arguably one requesting that the company publish an annual assessment of long-term portfolio impacts of public climate change policies. Part of the contention is that other companies who had been presented with substantially similar proposals — including BP, Shell, Statoil, Suncor, and Glencore — had recommended shareholders vote in favour. The Company, however, has argued that its current disclosures are sufficient to allow shareholders to understand its forecasting and how it is considering and planning for climate change and attendant regulations. A number of shareholders disagree; in a relatively rare move at least 32 shareholders have publicly announced their intention to support this resolution.
Dassault Systèmes SE
Euronext Paris – May 26, 2016
Recent changes to laws governing board-level representation of employees in France have mostly been implemented without controversy — that is, until the upcoming annual meeting of Dassault. The employee works council has added a number of shareholder proposals to the agenda that indicate a rift between management and employees on several key issues. In particular, the works council is contesting the board’s proposed election method for employee representatives to the board, which it describes as undemocratic despite conforming to legal requirements. Additionally, in a year in which high executive compensation been the cause célèbre of annual meetings in France, the pay package for the Company’s CEO will likely be noticed, regardless of whether it provokes shareholder dissent.
iRobot Corporation
NASDAQ – May 25, 2016
Following more than a year of private and public engagement between iRobot management and Red Mountain Capital Partners – a 6.2% holder – investors will be asked to consider competing director slates at the Company’s 2016 annual meeting. Central to the ongoing dispute is the fundamental distinction between the Company as a software and robotics technology enterprise – a view unambiguously promulgated by management and the board – and the more general perception that the Company is essentially a producer of high-end consumer discretionary products. Red Mountain also argues the Company has failed to align ongoing expenses with greater investor returns or a more attractive stock valuation. Shareholder concerns with these issues are further compounded with reference to iRobot’s corporate governance and compensation programs.
Coca-Cola Enterprises, Inc.
Euronext Paris, NYSE – May 24, 2016
Coca-Cola Enterprises intends to combine with two other European Coke bottlers – Coca-Cola Iberian Partners (currently owned by Spain’s Daurella family) and Coca-Cola Erfrischungsgetränke GmbH (currently owned by U.S.-based The Coca-Cola Company) – in a three-way merger that will result in the formation of the world’s largest independent Coke bottler based on net revenue. Corporate governance matters were at the forefront of the deal negotiations, as the Company’s board sought to secure sufficient protections for independent shareholders. One of the more unusual aspects of this proposal relates to the fact that most of the combined entity’s independent directors will serve for initial terms that will be longer than is the norm. The Company argues that board continuity will be especially important early on as the combined entity focuses on trying to realize projected annual pre-tax cost synergies of approximately $350 million to $375 million within the first three years. The Company may also realize additional tax benefits in the long run through a merger-related change in domicile from the United States to the United Kingdom, though the firm has steadfastly insisted that the merger is not being driven by tax reasons. In fact, despite recent U.S. regulatory developments aimed at curbing tax inversions, this merger has not fizzled out, as all sides continue to expect that the deal will close in the second quarter of this year.