pulling teeth: an interview with john chevedden at … · across the atal ntci , harte hanks has...

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www.proxyinsight.com January 2018 Volume 5, Issue 1 VOTING NEWS PROXY MONTHLY AT THE FOREFRONT OF STEWARDSHIP: WITH APG’S DAVID SHAMMAI PULLING TEETH: AN INTERVIEW WITH JOHN CHEVEDDEN

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Page 1: PULLING TEETH: AN INTERVIEW WITH JOHN CHEVEDDEN AT … · Across the Atal ntci , Harte Hanks has come under pressure to improve its corporate governance from its second-largest shareholder,

www.proxyinsight.com

January 2018Volume 5, Issue 1

VOTING NEWS

PROXY MONTHLY

AT THE FOREFRONT OF STEWARDSHIP: WITH APG’S DAVID SHAMMAI

PULLING TEETH: AN INTERVIEW WITH JOHN CHEVEDDEN

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Page 3: PULLING TEETH: AN INTERVIEW WITH JOHN CHEVEDDEN AT … · Across the Atal ntci , Harte Hanks has come under pressure to improve its corporate governance from its second-largest shareholder,

This year’s largest story so far

is without doubt Larry Fink’s

annual letter to the CEOs of

corporate giants. In the letter, the chief

executive of BlackRock outlined some

of the expectations the world’s biggest

asset manager has for the coming

year, including that firms should make

“a positive contribution to society,” as

opposed to merely concentrating on

growth. Many analysts have taken the

letter as a sign that BlackRock will vote

more aggressively in the future.

In other news, governance concerns

have so far been the theme of 2018,

with numerous dramas emerging all

over the world. In the UK, this month has

been preoccupied with the liquidation of

construction giant Carillion. Speaking

on the company’s downfall, the Institute

of Directors (IoD) accused Carillion’s

directors and shareholders of failing

to provide “appropriate oversight.” In

addition, the collapse of Carillion has put

government intervention back on the

menu, with Prime Minister Theresa May

declaring that she will introduce new rules

to protect worker pension schemes and

fine companies that fail to do so.

Across the Atlantic, Harte Hanks has come

under pressure to improve its corporate

governance from its second-largest

shareholder, Fondren Management.

According to a filing with the US Securities

and Exchange Commission, the hedge

fund intends to speak to other investors

about the immediate need for a new

chairman with industry experience and a

refreshing of the board to rid it of directors

with excessive tenures.

In South Africa, the recent collapse in

Steinhoff’s share price following the

resignation of the company’s chief

executive, Markus Jooste, amid allegations

of fraud has raised questions about dual-

listing in South Africa. Indeed, Steinhoff’s

compliance with the Dutch corporate

governance code and two-tier board

structure conflicts with much of South

African standard corporate practice. This

fact has led some to demand that dual-

listed companies in South Africa adhere

to the country’s King code of corporate

governance.

Finally, in Switzerland, the PK Post pension

fund is reconsidering its membership of

the proxy voting foundation Ethos due

to concerns about the organization’s

corporate governance. The fund’s

managing director, Françoise Bruderer

Thom, held a seat on Ethos’ trustee board

until late in 2017. However, Ms Thom had

demanded the resignation of the president

of Ethos’ supervisory board, Dominique

Biedermann, due to a conflict of interest.

His wife, Yola Biedermann, is the head of

Ethos’ corporate governance department,

which puts managing director Vincent

Kaufmann in the unenviable position of

being “the boss of his boss’ wife.”

When Mr Biedermann refused to stand

down, Ms Thom herself resigned in protest

of what she deemed as governance

problems at the foundation.

This month we have two interviews. The

first is with the venerable shareholder

proponent John Chevedden. For our

US readers, Mr Chevedden needs no

introduction, as one of the country’s most

well-known advocates of improving the

governance of corporate America.

In the interview, we discuss with Mr

Chevedden the various difficulties he

has getting his proposals onto company

ballots, as well as getting a company to

fully implement them if they pass. He also

outlines his most frequent shareholder

proposals for this year’s upcoming proxy

season.

Our second interview is with David

Shammai, Senior Governance Specialist

at APG. APG plays a leading role in

Europe’s pension sector, best known for

administering the Netherlands’ enormous

ABP scheme. In the interview, we discuss

how APG strives to be at the forefront

of global best-practice, as well as what

corporate reforms David would like to see

introduced both domestically and in the

wider international context.

Proxy Insight is the only tool to offer the

voting intelligence necessary to navigate

today’s investor relations market. If you are

not a client and would like to take a look,

we would be delighted to offer you a trial.

Please get in touch.

[email protected]

Proxy StatementNick Dawson, Co-Founder & Managing Director, Proxy Insight Limited.

3

Page 4: PULLING TEETH: AN INTERVIEW WITH JOHN CHEVEDDEN AT … · Across the Atal ntci , Harte Hanks has come under pressure to improve its corporate governance from its second-largest shareholder,

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Page 5: PULLING TEETH: AN INTERVIEW WITH JOHN CHEVEDDEN AT … · Across the Atal ntci , Harte Hanks has come under pressure to improve its corporate governance from its second-largest shareholder,

How do you decide which governance

practices to address each year?

Generally, we look for areas where

companies could improve their

governance and at issues which we

believe shareholders will support to a

significant extent.

There are a number of topics that we

can predict will likely receive a lot of

support – i.e. 30 to 40 percent and

more. However, we are sometimes

surprised with the level of support a

proposal receives.

For instance, shareholder proposals

asking for an independent board

chairman sometimes receive levels

of support in the 40s seemingly out

of nowhere. Indeed, levels of support

for particular proposals sometimes

jump up over the course of a couple of

proxy seasons, which can be difficult

to predict.

Of course, the reverse also happens,

where a proposal receives far lower

support than what was expected.

What are this season’s hot topics going

to be?

This year we are doing variations of

topics that we have done before. Of

course, most of the proposals have

already been submitted for this year.

As we are in the first quarter, we are

currently in the scramble over which

proposals are published and which are

not.

Beyond 2018, we have no idea what

the future corporate governance trends

will be. We plan to look at the corporate

governance profiles of companies

more intensely when the time arrives.

What are your favorite company

responses to your proposals?

Well I don’t think I have any responses

that I would describe as ‘favorites.’

Some companies are more cordial

and polite than others, but that doesn’t

mean they have any qualms about

stabbing you in the back with a no-

action request.

Very few companies have an ethical

problem with attempting to find any

small fault in a proposal they possibly

can in order to exclude it from their

meeting. Some companies even send

you a pre-no-action letter objecting to

the use of specific words in a proposal.

It goes back to the early 2000s, where

the SEC would micro-manage every

line of proposals. As a result, the

SEC would exclude a sentence if, for

example, there was a mistake over the

use of dates when quoting a source.

In the end, the SEC very soon after

decided to get out of the business

of micromanaging every little detail

of a proposal. However, the practice

of companies sending out letters

castigating proponents for every little

technicality continues today.

What are some common mistakes

companies make responding to your

proposal?

Well some companies just want to talk

for the sake of talking. They are not

serious about the proposal. As a rule

of thumb, the firms that want to talk the

most plan to do the least.

For instance, they might ask open-

ended questions, or say that they are

not going to adopt your proposal, but

maybe there is something smaller that

they can do for you in the hope that you

bid against yourself. Some companies

don’t want to do anything, but they

also want to say that they have tried,

no matter how small their reaction to

it. You can tell pretty quickly when a

company is serious about adopting a

proposal.

Companies are now arguing to the

SEC in no-action requests that they

do not need a less rigid version

of proxy access because they

have an engagement process with

shareholders. They contend that the

SEC should take the company’s word

that shareholders are happy with

the status quo. Imagine a so-called

informal engagement process taking

the place of a shareholder vote on any

important governance issue.

Pulling TeethDiscussing corporate activism with shareholder proponent John Chevedden

5

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Are you as tough a negotiator as

they say?

That’s a hard question. Companies

are often reticent about the process

by which their board has discussed

a proposal put forward. I sometimes

ask for a reference to a record of

the board approving one of my

proposals as evidence, and yet

receive nothing. They merely say

that they will adopt it, and then

eagerly request that I withdraw my

proposal on that basis.

I want to avoid the excuse that

a sudden crisis conveniently

happened around the time of the

company meeting and the promised

company action lost its place in line.

Sometimes companies will say that

they have new management, and as

you will like what they are planning

to do, why not hold off on your

proposal for a year.

So, as a negotiator, I have to

get something concrete from

companies. It often feels like you’re

pulling at teeth for details, when in

reality you really are just asking for

reasonable evidence.

What do you wish the SEC would

change about the no-action

process?

Well it is not just the no-action

process that is the problem. Often

companies will put one of my

proposals forward at their meeting

safe in the knowledge that the

ancient 80 percent vote requirement

bylaws of the company will prevent it

from passing.

I had one proposal that received

around 79 percent support, but

because the bylaws of the company

required 80 percent votes in favor for

the specific changes it failed despite

an overwhelming majority of support.

There was another proposal that was

approved by a 200 to one margin on

votes cast, but failed to receive the

required 80 percent support.

Even when a proposal receives

enough investor support, that does

not mean that it will be substantially

implemented. Often when a company

takes action to address shareholder

concerns, it takes some baby steps

in the right direction. As a result, you

have to go back the year after with

the same issue in an effort to see its

full implementation. Of course, then

the company will attempt to exclude

such follow-up proposals on the

grounds that they have supposedly

already implemented it.

Therefore, if shareholders want to get

the full advantage of a certain topic,

they have to keep re-submitting the

same proposal topic year after year

to make additional progress. Even

when a proposal has been fully

implemented, companies frequently

take credit for its introduction in their

opposition statements to proposals

on subsequent topics.

What are the top-3 proposals

you submitted (ignoring no action

process) most frequently this

season?

For 2018, I have submitted a number

of proposals on the shareholder right

to call a special meeting and to act

by written consent. Also, a number of

independent board chair proposals

– especially when companies have

weak lead directors.

Thank you John.

9

“SOME COMPANIES ARE MORE CORDIAL AND POLITE THAN OTHERS, BUT THAT DOESN’T MEAN THEY HAVE

ANY QUALMS ABOUT STABBING YOU IN THE BACK WITH A NO-ACTION REQUEST.”

ICompany Meeting Date Proposal Type % For*

Cognizant Technology 06-Jun-17 Eliminate/Reduce Supermajority Vote Requirements [S] 99.78

Dana Inc. 27-Apr-17 Eliminate/Reduce Supermajority Vote Requirements [S] 80.29

Marathon Petroleum 26-Apr-17 Adopt Majority Vote as Standard [S] 72.63

Netflix Inc. 06-Jun-17 Approve Declassification of the Board [S] 62.89

BorgWarner Inc. 26-Apr-17 Right to Act by Written Consent [S] 61.93

Table 1: Key Proposals Submitted by John Chevedden in 2017 Source: Proxy Insight

*Total support based on For and Against votes only

Page 7: PULLING TEETH: AN INTERVIEW WITH JOHN CHEVEDDEN AT … · Across the Atal ntci , Harte Hanks has come under pressure to improve its corporate governance from its second-largest shareholder,

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Page 8: PULLING TEETH: AN INTERVIEW WITH JOHN CHEVEDDEN AT … · Across the Atal ntci , Harte Hanks has come under pressure to improve its corporate governance from its second-largest shareholder,

Could you briefly outline for us how

APG approaches its proxy voting

responsibilities?

Our proxy voting activities are integral

to our stewardship obligations. We are

committed to voting in all shareholder

meetings held by companies in which we

own shares. In practice, given technical

issues such as share blocking, this

translates to voting in well over 95 percent

of the meetings across all markets.

The voting process at APG has evolved

over the years. It has now matured to a

point where the responsibilities are very

clear to all involved. The governance

team is tasked with executing the votes,

whereas the investment teams contribute

to many of the voting decisions, depending

on the issue and on the portfolio position

of the stock.

Our voting process is therefore a

collaborative one with governance

specialists, wider sustainability

professionals as well as portfolio

managers, all involved as needed. Typically

decisions are made unanimously, but we

have a clear route for policy exceptions

and decision escalation if needed.

As the custodian of Europe’s largest

collection of pension funds, is there

anything that differentiates your

responsibilities from those of the average

Dutch asset manager?

Institutional investors in the Netherlands

are generally very mindful of their

stewardship duties and this leads to a

typically high quality of stewardship.

We work together with other investors

(Dutch and international) via a number of

initiatives. For example, Eumedion, where

we are actively involved in the work of

several committees. Such collaboration

ensures that ideas for evolving practice are

shared throughout different institutions.

Representing the largest pool of pension

funds in the Netherlands and servicing

clients that are household names

domestically – including ABP, SPW

and bpfBOUW – does, however, add

an additional layer of sensitivity for us. It

means that we have to continuously strive

to be at the forefront of evolving best

practice. A comfortable middle position is

for us just not good enough.

For example, we were one of the first

managers to start looking at the carbon

footprint of our portfolios several years

ago, and during the end of 2015 introduced

reduction targets. Having continuously

pushed the envelope of this issue working

with our clients since, we were pleased

that our efforts were acknowledged, with

the AODP awarding us top spot in their

2017 survey of global asset managers.

Is there any corporate practice globally

that APG would also like to see introduced

to the Dutch market?

Dutch corporate governance has

traditionally been at the forefront of

international developments.

Recently, the Dutch corporate governance

code was updated and again we have

seen a pioneering approach in several

areas. Examples include an emphasis

on investment for the long-term, or the

clarification that ensures the board is

responsible for overseeing management

in respect of corporate culture.

In addition, a group of Eumedion

participants is currently working on the

revision of the Eumedion best practices of

engaged share-ownership, and is looking

to develop them into a Dutch Stewardship

Code similar to that of some other markets.

The consultation period on the draft Dutch

Stewardship Code closed last month and

the draft is expected to be finalised and

come into force sometime next year.

At the same time, there have been other

developments, which at APG we were

more apprehensive about. I am referring

to the issue of expanding the scope of

takeover defences. There should be

a way to protect important industrial

interests, sustainability concerns etc, and

at the same time support the creation

of long-term value. The recently formed

Dutch coalition government (‘Rutte-

III’) agreement proposed to include a

‘reflection period’ of 250 days for Dutch

listed companies if they are faced with

proposals for a fundamental change of

strategy at the AGM.

At the Forefront of StewardshipDiscussing the Netherlands and beyond with David Shammai, Senior Governance Specialist at APG

8

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However, this reflection period will not be

on top of any existing takeover defences,

such as anti-takeover preference shares

or priority shares.

As a pension asset manager, will the

EU Shareholder Rights Directive (SRD)

help you better implement your investor

activities and responsibilities?

In short, yes. There are many very positive

elements included in the SRD that bolster

minority shareholder rights, contribute

to shareholder participation in meetings

and more generally improve the quality

of stewardship. It is great to see that at

an EU level there is a continued effort to

develop this further, and we were pleased

to hear about the recent commissioning

of a group of experts on technical aspects

of corporate governance processes.

In a number of European markets we

have seen an increase in the rates of

participation in shareholder meetings.

This is a very positive development

and we welcome the efforts to improve

technical aspects, such as shareholder

identification and streamlining voting

chains. Both of these would underpin

the growing demand, in our view,

for companies to engage with their

shareholders.

What would be the main reason for your

opposition to share issuance proposals?

In most cases where we vote against

the issuance of shares it is because the

size of the authority to issue shares is too

large in our view. Generally, we accept

issuances of 20 percent with pre-emptive

rights and 10 percent without pre-emptive

rights. If the requested issue exceeds 20

percent, we expect the company to give

a justification. Although we are aware and

recognise that local laws and regulations

may permit larger issuances, we expect

companies to limit their share issuance

requests to what works for them and

what they can justify to their shareholders.

Proxy Insight data shows that APG is

considerably more aggressive when

voting on director re-election proposals

than your average global asset manager.

What would you say are the main factors

that would make you oppose the re-

election of a director?

Votes against the appointment of

directors are predominantly based on

a lack of independence of the board or

board committees. We generally expect

unitary boards to be mainly composed

of non-executive directors, a majority

of which should be independent. The

supervisory board of a company with two

governing bodies should, according to

our policy, be composed of non-executive

directors only, of which the majority

should be independent. It is critical in our

view that certain key committees – the

audit committee being a clear example –

should be fully independent.

How does your voting policy address the

specificities of regional markets?

Our corporate governance policy from

which we derive our voting policy, is

essentially global. It is a commonly

repeated observation that capital markets

are interconnected globally. Certainly

from the perspective of an international

investor we have a choice of markets

within sectors. For example, if we target

a certain level of sector exposure, this can

be achieved by investing in companies

from a number of markets.

APG is invested in over 50 markets, it

would be confusing to the companies

we are invested in if we had separate

policies for each market. In terms of broad

principles, we support the functioning of

the board, committee independence and

remuneration alignment. For us, these are

all market agnostic.

However, we do allow for certain variations.

For instance, this year we have extended

our European remuneration guidelines to

also apply to our US holdings and in doing

so we allowed for some nuances to cater

for local practice. Another example is the

way we apply some of the independence

requirements to our portfolio companies

in Asia. Again, it is not that we think that

board independence is less important in

some markets. It is just that for pragmatic

reasons we acknowledge local variations

in applying the principles.

If APG could introduce one reform to the

global corporate governance landscape

what would it be?

That is a tricky question to answer. A

few candidates could easily top the list:

one share, one vote or CEO-chairman

separation are still ongoing issues. As is

investors’ drive to improve remuneration

structures. Our top one, however, at least

at the moment, is for there to be clarity

for all investors (via stewardship) and

directors (via their legal duties) to consider

governance and sustainability in their

roles. It will contribute in our view to a

much more stable and resilient financial

system, as it will ensure that financial

markets are long-term aligned throughout

the investment chain.

Luckily though, this particular reform we

hope is also on its way, at least in Europe!

The EC commissioned the High Level

Expert Group on sustainable finance, of

which APG’s Claudia Kruse is a member,

has indicated in its interim report that it

is considering recommendations along

these lines.

Thank you David.

9

“ALL INVESTORS (VIA STEWARDSHIP) AND DIRECTORS (VIA THEIR LEGAL DUTIES) [SHOULD]...CONSIDER GOVERNANCE

AND SUSTAINABILITY IN THEIR ROLES.”

Page 10: PULLING TEETH: AN INTERVIEW WITH JOHN CHEVEDDEN AT … · Across the Atal ntci , Harte Hanks has come under pressure to improve its corporate governance from its second-largest shareholder,

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Page 11: PULLING TEETH: AN INTERVIEW WITH JOHN CHEVEDDEN AT … · Across the Atal ntci , Harte Hanks has come under pressure to improve its corporate governance from its second-largest shareholder,

Toyota puts the brakes on adviser

appointments

Toyota is to halt the automatic

appointment of newly-retired directors

to advisory roles. This was previously

Toyota’s standard practice for all retiring

directors, and the company currently

has just under 50 advisers and senior

advisers.

Advisers are among the more

controversial aspects of Japanese

corporate governance. Critics say that

appointing former senior managers

to adviser positions allows them to

continue to influence the company

after their retirement, with little

accountability and only loosely-defined

responsibilities.

Toyota has historically been among

the companies to employ the practice.

Presidents and vice-presidents have

been appointed to serve as senior

advisers for four years, while other

senior figures have been appointed as

advisers on one or two-year contracts.

Toyota is not writing off the concept of

adviser appointments entirely. However,

the company will cease offering adviser

roles to retired directors automatically

and will shorten the length of their

contracts. Standard and senior advisers

will now be appointed for one year, and

only with the approval of the board. A

committee, made up of 50 percent

independent directors, will be tasked

with reviewing advisers’ roles and

remuneration. Later this year, Toyota

will also begin disclosing information

on its advisers in accordance with new

Tokyo Stock Exchange rules.

The IPO struggle heats up in Asia

Following the lead of its rival in Hong

Kong, Singapore’s exchange has

recently declared that it will allow

companies with dual-stock structures

to list. Although dual-stock structures

have come under criticism from

investors who fear the dilution of their

voting rights, competition for high-

profile tech IPOs has forced Singapore

to follow suit.

The Monetary Authority of Singapore

said that it supported the decision of

the country’s exchange. However, it

also noted that it would look at the

safeguards put in place by the exchange

in order to mitigate the risks involved in

allowing dual-stock structures to list.

The exchange has also said that it

plans to go ahead with the introduction

of stock futures for large Indian firms.

This is despite the fact that The National

Stock Exchange of India Ltd. has asked

Singapore’s exchange to delay their

introduction.

Persimmon CEO defends his £110

million bonus

The CEO of UK housebuilder

Persimmon has defended the bonus

scheme which is controversially

awarding him £110 million. The award

is believed to be the UK’s largest ever,

and has drawn criticism from politicians

and campaigners.

The bonus is the result of an uncapped

share scheme put in place several

years ago. Since the scheme was

originally created, Persimmon’s share

price has rocketed as a result of

the UK government’s “Help to Buy”

scheme driving up demand for new

homes — and driving the value of

CEO Jeff Fairburn’s bonus far higher

than the board could have predicted

when creating the scheme. Around

half of those buying properties from

Persimmon are now using Help to Buy.

In defense of the award, Mr Fairburn

said: “You’ve got to put this in the

context of what has been achieved...

The scheme is about 140 individuals

and it’s always a team effort. Of course,

I’m responsible at the end of the day

and the business has done very well.”

Confusion reigns over exclusion of

shareholder proposals

A recent SEC staff bulletin said

companies could exclude shareholder

proposals that address “ordinary

business” as this is the remit of

management. However, many remain

unsure about just how far this license

will stretch.

11

News summaryA round-up of the latest developments in proxy voting

Page 12: PULLING TEETH: AN INTERVIEW WITH JOHN CHEVEDDEN AT … · Across the Atal ntci , Harte Hanks has come under pressure to improve its corporate governance from its second-largest shareholder,

12

“IN TOTAL, LAST YEAR SAW 163 COMPANIES IN THE US HOLD FULLY-VIRTUAL MEETINGS, ACCORDING TO GLASS

LEWIS.

The bulletin initially sparked fears that

companies would have too broad a

remit to exclude valid shareholder

proposals. Last month, however,

the SEC refused such a request by

Apple. The tech giant pointed to the

bulletin in its attempt to avoid tabling

a shareholder proposal calling for the

creation of a human rights committee.

The SEC refused the request, saying

that the board had not made it clear

why they felt the proposal was not

raising an important issue.

In isolation, this might have offered

some clarity, as well as some

reassurance to those who fear that too

many proposals could be written off as

“ordinary business.” In fact, the refusal

of Apple’s request only added to the

confusion about the bulletin’s reach. On

the same day, another, similar request

from Apple was upheld. The SEC ruled

that a proposal to set zero-emission

targets for greenhouse gases “seeks to

micromanage the company by probing

too deeply into matters of a complex

nature upon which shareholders...

would not be in a position to make

an informed judgment.” According to

the proponent, similar proposals have

previously been allowed by the SEC.

Shareholders winning real victories

against virtual meetings

Shareholders who are unhappy with

virtual-only meetings are successfully

making their voices heard. A number

of companies have reversed decisions

to hold fully-online annual meetings as

a result of shareholder protests.

ConocoPhillips was one company

to receive a slap on the wrist. Last

year’s meeting was held virtually, but

shareholders were not impressed

and their objections have led the oil

company to switch back to physical

meetings. Union Pacific Corp had a

similar experience with its 2017 virtual

AGM, and will also be holding a more

traditional meeting this year.

In total, last year saw 163 companies

in the US hold fully-virtual meetings,

according to Glass Lewis. This is

up from 122 the previous year, but

many investors are not impressed. A

number of large asset managers and

investment organizations are actively

opposing the practice, including the

New York City Comptroller and the

Council of Institutional Investors.

Tim Smith of Walden Asset

Management said: “A virtual-only

meeting is a totally disembodied

event online — there’s no exchange

or opportunity for investors to look the

board in the eye.”

Duke Energy to disclose effects of 2

degrees scenario

Duke Energy has decided to report

on how its business operations will be

affected by a 2 degree rise in global

temperatures in accordance with the

2016 Paris Agreement. A shareholder

proposal asking the company to do

just that was put forward at Duke

Energy’s annual meeting last year. It

came just short of a majority, with over

46 percent support.

The proposal was put forward by

New York State Comptroller Thomas

P. DiNapoli. Following Duke Energy’s

declaration that it would report on

the operational risks posed by climate

change, Mr DiNapoli said in a news

release: “Duke Energy is listening to its

shareholders who need to know how

the company is preparing to address

the risks and opportunities presented

by the worldwide efforts to mitigate

climate change.”

In addition, a Duke spokesperson

said in an email that: “Duke Energy

recognizes that climate change is a

key issue for many of our customers

and shareholders. As we’ve met with a

variety of stakeholders, we discussed

how Duke Energy is working toward

a lower carbon future, modernizing

our system to meet the needs of our

customers and strengthening our

system against extreme weather

events. To make this information more

accessible, we plan to publish in the

first quarter of 2018 a climate report

that details our progress to date and

our strategy moving forward.”

Lloyds to keep cash bonus cap as it

returns to private ownership

Lloyds Banking Group has decided to

keep the £2,000 cap on cash bonuses

imposed on it by the UK government

despite ridding itself of its remaining

government shares last year. According

to an insider at the bank, “there are no

plans to change it” as the bank moves

back into full private ownership.

Following the 2008 financial crisis,

comprehensive reforms were put in

place, which mandated that banks pay

the majority of executive bonuses in

deferred shares. These share awards

can be clawed back up to seven

years after the point at which they

were granted – 10 years if there is an

ongoing investigation.

Many observers believe that Lloyds’

decision to keep the cap on cash

bonuses and instead pay its senior

executives mostly through deferred

share awards will put pressure on

other banks to do the same.

Page 13: PULLING TEETH: AN INTERVIEW WITH JOHN CHEVEDDEN AT … · Across the Atal ntci , Harte Hanks has come under pressure to improve its corporate governance from its second-largest shareholder,