F&C Investments votes against 20% of all pay votes globally
GLOBAL - F&C Investments took a tougher stance on pay in 2011, according to its Responsible Investment Report 2011.
Having abstained on 16% of pay proposals in 2010, the asset manager voted against 20% of all pay votes globally last year.
In the US, it opposed almost half of all say-on-pay proposals put forward by companies - many of which only reluctantly put the issue to the vote for the first time following the implementation of the Dodd-Frank Act.
F&C voted against management on pay proposals at many financial institutions, including Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley, Barclays and HSBC.
Nevertheless, George Dallas, director of corporate governance at F&C, said that, over the years, he had seen a strong improvement in pay structures, which now include deferred payments, more share incentives and clawbacks.
F&C has in the past written to banks calling for a credit underpin - in other words, conditionality - to their remuneration packages.
Speaking at the seminar for the launch of the report, he said: "There has been a lot of structural improvement, but we are not yet where we want to be."
Another hot topic of engagement in 2011 was the booming but controversial shale gas industry.
The asset manager engaged with companies, their financiers and regulators on the emerging risks of this industry.
Karina Litvack, director of the governance and sustainable investment team, said: "The shale gas horse has already bolted, so it is difficult to put a lid on it."
But she said engagement with the operators was crucial to ensure best practice and operational integrity, as well as a dialogue with financial actors that have a lot of leverage in the industry.
Another important issue last year was listing standards, where the asset manager argued against the dilution of governance standards for issuers listing on the London Stock Exchange.
In total, F&C engaged 1,222 companies in 54 countries across a wide span of ESG issues on behalf of its clients in 2011, and exercised voting rights at more than 5,300 companies.
It voted on all companies held in its clients' portfolios, meaning more than 73,000 resolutions at more than 5,300 companies in 64 countries.
Overall, F&C supported management in 76% of all proposals - a slight increase from the 72% of 2010.
This was mostly accounted for by an increase in support for resolutions related to board elections, where it saw an improvement in practices in a number of markets including Brazil, China, South Korea and Japan.
The countries with the highest votes against management were Japan with 56% votes against - a big portion of which related to board directors - Mexico with 32%, Russia with 27% and Australia and France with 20% each.
In other news, environmental, social and governance (ESG) research provider Sustainalytics has announced its intention to acquire independent Singapore-based ESG research provider Responsible Research.
The transaction is subject to due diligence and regulatory approvals, and is expected to close at the end of May.