Weekly highlights from the Proxy Papers you can’t 
afford to miss: ECGH, NBL, S51, DD, ABOT, SDR, RWE, VIV, GATE, NWL, BAC, CPALL.
Engro Corporation Limited
EGCH Pakistan Stock Exchange – April 15, 2016
Despite strong performance in fiscal year 2015, this KSE 30 index member is restructuring its holdings in the Engro Group, which includes disposing all of its shares in Engro Polymer & Chemicals Limited (“Engro Polymer”) and disposing up to 24% of the shares of Engro Fertilizers. While the Company would remain the controlling owner of Engro Fertilizers, the Company would lose ownership of a subsidiary, thereby changing the structure of the Engro Group. Additionally, the Company received an offer from FrieslandCampina International Holding BV on March 3, 2016, to acquire 51% of the shares of Engro Foods Limited, an 87.07%-controlled subsidiary.
Noble Energy
NBL NYSE – April 26, 2016
After receiving 42% support on a shareholder proposal requesting proxy access that would allow an unlimited number of shareholders owning 3% of shares for 3 years to nominate 25% of the board at its last annual meeting, Noble Energy adopted a proxy access provision allowing a group of 20 shareholders owning 5% of shares for 3 years the ability to nominate 20% of the board. In response to the board’s adoption of proxy access, a binding shareholder resolution has been proposed that would lower the ownership standards to match those requested in the 2015 shareholder proposal. However, the shareholder proposal fails to address some of the more problematic provisions in Noble’s proxy access bylaw, including a prohibition on the ability for shareholders to form compensation agreements with their nominees and a requirement that nominating shareholders provide a representation as to whether they intend to hold Noble’s shares for one year following the meeting.
Sembcorp Marine Ltd.
S51 Singapore Exchange – April 18, 2016
A subsidiary of the Singaporean marine and offshore engineering company has been implicated in a bribery scandal, to win the orders for deep-water rigs worth US$800 million, involving the Brazilian state-owned shipbuilder Sete Brasil and the state-owned oil company Petrobras. In the fourth quarter of 2015, Sembcorp Marine posted a net loss for the first time in the last 12 years partially due to Sete Brasil’s outstanding balance of S$329 million that has remain unpaid since November 2014. The Company has denied the allegations.
E.I. du Pont de Nemours and Company
DD NYSE – April 27, 2016
While DuPont was narrowly successful in fending off Trian’s proxy contest in last year’s high-profile clash, CEO Ellen Kullman retired within half a year of the 2015 annual meeting. Coming a few months after a CEO transition, shareholders will have the opportunity to consider the rationale behind DuPont’s decision to award a retention grant to their then-interim, now-permanent CEO. In addition, with the proposed merger between the company and Dow Chemical on the horizon, shareholders will consider whether the Company’s decision to add excise tax gross-up provisions to NEO severance agreements is in their best interests.
Abbott Laboratories (Pakistan) Limited
ABOT Pakistan Stock Exchange – April 21, 2016
It’s always encouraging to see a company improve its overall disclosure, including fees paid to the auditor, however, in this case the additional disclosure of tax advisory services has served to highlight the excessive non-audit fees paid to said auditor. In brighter news, the Company is seeking support in allowing e-voting for shareholders and the use of non-member proxies in accordance with Pakistani regulations which took effect in January 2016.
Schroders plc
SDR LSE – April 28, 2016
FTSE 100 investment manager Schroders plc has been the subject of public criticism from shareholder groups since its announcement that chief executive Michael Dobson would transition to non-executive chairman from April 4, in contravention of the recommendations of the UK Corporate Governance Code. Opposition to the appointment has reportedly been exacerbated by a perceived lack of consultation with investors, and the fact that Schroders itself has, as an asset manager, voted against similar moves by other companies. However, the Schroder family, which effectively controls the Company through its aggregate 48% shareholding, is supportive of the move, meaning Mr. Dobson’s reelection is likely to be approved at the Company’s AGM. Schroders once again appeared to ignore the guidance of the UK Code, which advocates remuneration structures designed to promote the long-term success of the Company, by awarding an annual bonus of almost £8 million to Mr. Dobson under the uncapped short-term incentive plan.
RWE AG
RWE Deutsche Boerse – April 20, 2016
RWE is under pressure from German municipalities, collectively the largest shareholder, to reverse course on its decision not to distribute a dividend for 2015. It also appears that the board navigated a turbulent nomination process to decide on Werner Brandt, former CEO of SAP, to replace the current CEO, while the municipal shareholders had favored a former government minister. With four representatives of municipal shareholders up for election, the election could be as contentious as the last time they were up for election in 2011, when over 20% of shareholders voted against each of the municipal shareholder nominees.
Vivendi
VIV Euronext Paris – April 21, 2016
As one of the French companies that attracted the most shareholder opposition at its 2015 annual meeting, it remains to be seen whether shareholders will accept somewhat improved disclosure to take a less critical view of the say on pay proposals this year. Vivendi has also taken some steps to restrict the board’s authority to use anti-takeover devices without shareholder approval, another issue that provoked shareholder ire in 2015. Glass Lewis continues to highlight significant governance concerns, including new related party transactions. However, with the extra voting rights now attributed to Vincent Bolloré after the failure of a majority-approved shareholder proposal to obtain supermajority support to keep a one-share-one-vote principle at the 2015 annual meeting, the perspective of institutional shareholders not availing of double voting rights may be less relevant in 2016.
gategroup Holding AG
GATE SWX – April 14, 2016
The annual meeting of gategroup Holding AG involves a contested election of directors. The board has proposed the re-election of all seven current members of the board. If elected, board nominees would each serve a one-year term that expires at the Company’s 2017 AGM. In contest to certain of the board’s nominees, RBR Capital Advisors AG and Colony Advisors LLP have nominated two other candidates to serve on the board. RBR Capital owns 11.56% of gategroup’s issued share capital, making it the Company’s largest shareholder. Last year, the Dissidents nominated four candidates to the board, two of which were eventually endorsed by the Company as part of a settlement and remain as current members of the board and as current nominees of the board at this year’s AGM. Mr. Schmid has informed the board that he intends to step down as chairman and a member of the board at the 2017 AGM. Despite Mr. Schmid’s intention to leave the board in 2017, the Dissidents are seeking to have him step down from the board prior to this year’s AGM.
Newell Rubbermaid
NWL NYSE – April 15, 2016
Newell Rubbermaid Inc. (“Newell”) and Jarden Corp. (“Jarden”) have entered into an agreement that values the entire issued share capital of Jarden at approximately US$13,116.0 million. Existing Jarden investors would hold approximately 41.4% of the combined firm’s outstanding share capital, with the remaining 58.6% held by Newell’s current shareholders. Based on Newell’s unaffected closing share price as of December 4, 2015, the proposed consideration represented a premium of approximately 23.5% to Jarden’s unaffected closing share price as of the same date.
Bank of America Corporation
BAC NYSE – April 27, 2016
It has been less than a year since Bank of America sought and received shareholder approval to unify the positions of CEO and chairman under the leadership of Brian Moynihan. While some shareholders will remember the tumultuous extraordinary meeting in September 2015 as a step backwards in the Company’s governance, the Company has also learned that it needs to better engage its shareholder base and be more transparent. This lesson can be gleamed from the company’s outreach program following the EGM as well as its concerted effort to improve its diversity and refresh its board. One will also have to wait for the shareholder meeting to see if shareholders are truly content with the leadership of Jack Bovender, Jr. as lead independent director.
CP All Public Co., Ltd
CPALL Stock Exchange of Thailand – April 21, 2016
In December, 2015, Thailand’s Securities and Exchange Commission (“SEC”) issued fines totalling THB 34 million against six individuals for insider trading by unfairly using inside information to purchase shares of Siam Makro Public Company Limited (SET:MAKRO) (“Makro”) just before CP ALL announced its acquisition plan of Makro in April 2013. Three of the six individuals, namely Messrs. Korsak Chairasmisak, Pittaya Jearavisitkul and Piyawat Titasattavorakul, serve on both the board of the Company and Makro as executive directors, but have not been held criminally responisible by the SEC and continue to serve on both boards.
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