annual review indst 2024 public - Flipbook - Side 34
34
EOS
Voting escalations in 2024
EOS believes that engagement and voting go hand in hand. Below we have provided examples of significant votes where
we have used our vote recommendations to clients to reinforce our engagement approach. Compiled by Elissa El Moufti.
Company
A Meta
Platforms
Sector
Engagement
Objective/Issue
Escalation through voting
Elimination of dual
class share structure,
to adhere to the
one share, one vote
principle
Following engagement on Meta's use of a dual class share structure, and in the absence of any
indication from the company that it is looking to address this, we recommended that our clients
oppose the chair and the longest tenured member of the compensation/governance/nomination
committee at the 2024 AGM.
Separation of chair
and CEO roles
Due to concerns about the impact on shareholder rights, associated with the board's decision not
to allow a shareholder proposal on to the AGM ballot relating to the separation of the CEO and
chair roles, we recommended voting against the lead independent director at the 2024 AGM.
Board composition
We had ongoing concerns over board independence due to the potential conflicts of interests
of several board directors and an unclear board refreshment process. This prompted us to
recommend opposing the longest-tenured independent directors. We also had concerns about
the multi-class share structure and board-level gender diversity.
Worker voice and
corporate culture,
human capital
management
We have long engaged with the company on labour issues and corporate culture following the
sales practices scandal. More recently, we have been concerned by the allegations relating to
discrimination, unpaid overtime, freedom of association, and other human capital issues, at various
company branches and locations. As a result, we recommended opposing the human resources
committee chair, in accordance with our human rights voting policy.
Controversy linked
to UNGC Principle
10: Corruption and
bribery
Following reports that the company had falsified data relating to engine emissions and fuel
performance, we recommended voting against the re-election of the chair and a long-serving
executive director. This was due to concerns about the failure to oversee internal controls related
to the various instances of non-compliance with safety testing procedures.
Declining board
independence, ESG
disclosures
We have engaged with the company since 2019 asking it to improve ESG disclosure, and since 2020
have had concerns about a decline in board independence. This prompted us to recommend opposing
the re-election of both director nominees at the 2024 AGM. Our recommendation to vote against
director Murdoch in his capacity as the standing member of the nomination and governance committee,
related to concerns over the classified board structure, low diversity, diminished board independence,
inadequate disclosure of climate-related risks and pledging of company stock. We also recommended a
vote against the re-election of Kimbal Musk due to board independence concerns.
Human rights,
executive
remuneration,
corporate culture
Following engagement with the company on human rights, we recommended opposing the chair
of the sustainability and corporate responsibility committee. This was in accordance with our
human rights policy and due to persisting allegations of discrimination, harassment, and other
labour issues. We also recommended opposing the compensation committee chair and the sayon-pay proposal due to concerns about pay structure and quantum.
Financial
Services
Misalignment of pay
and performance,
board gender
diversity
While we were supportive of the say-on-pay item in 2023, we disagree with the compensation
committee's decision to abdicate compensation decisions for the vice chairs to the chair/CEO.
As a result, in 2024 we recommended that clients withhold their vote for the chair and members
of the compensation, nomination and governance committee. This was due to concerns regarding
the impact on shareholder rights, the low gender and overall board diversity, the board's
responsiveness to shareholder concerns and the performance of the remuneration committee.
Retail &
Consumer
Services
Freedom of
association, data
collection for
enhanced health and
safety management
We have engaged with the company on human rights, due to concerns about its stated policies
on respecting freedom of association. We have engaged on health and safety as the company's
stated improvements on health and safety run counter to reports from workers and third parties
alleging anti-union behaviour, health and safety violations, and other labour issues. Due to
these concerns, we recommended opposing the longest-standing member of the leadership
development and compensation committee, in accordance with our human rights voting policy.
Gender diversity
The company does not align with the Financial Conduct Authority's targets for board diversity.
These require at least one woman to be in a senior board position - the chair, senior independent
director, CEO or CFO. As a result, we recommended voting against the chair in his capacity as
nomination committee chair.
Human rights: labour
rights in the supply
chain; dual class
shares
Following our engagement with the company on human rights and the multiclass share structure, we
recommended opposing the governance chair. Despite the enhancements made to the company's
human rights reporting mechanisms following the child labour related controversies, we do not see
sufficient evidence through its reporting and disclosure that human rights risks are sufficiently addressed.
Governance and
succession planning
Following engagement with the company on its succession planning to mitigate the key-man
risk related to the combined chair/CEO, the board structure and board gender diversity, we
recommended a vote against the re-election of the combined chair/CEO.
Board composition,
remuneration
structure
Following the company's lack of response to our engagement, and the consistent opposition of
minority shareholders to the remuneration policies over the last few years, we recommended a
vote against the re-election of the remuneration committee chair.
Software &
Communication
Services
A TotalEnergies
Oil & Gas
A Alphabet
Software &
Communication
Services
A Wells Fargo
& Co
Financial
Services
A Toyota Motor
Transportation
A Tesla
Transportation
A McDonald's
Retail &
Consumer
Services
A Berkshire
Hathaway
A Amazon.com
A Anglo
American
Mining &
Materials
A Tyson Foods
Consumer
Goods
A SoftBank
Group
Software &
Communication
Services
A Naspers
Retail &
Consumer
Services
