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Activism
Briefs .....
UK activist fund manager, Hermes, has
started to disclose details of the votes cast by the BT pensions scheme based on
its advice. The voting details for the third quarter of 2006 showed that there
were votes cast against resolutions at around half of the meetings in
Europe, not including the UK. Opposition at
UK meetings was far less common. The most frequent reason for a vote against
was the apparent failure to link pay and appropriate performance at companies.
Other issues highlighted were concerns about value creation, board structure and
protecting ownership interests.
New York City comptroller,
William Thompson, has submitted shareholder proposals at 10 US companies asking
them to disclose their policies and procedures in respect of using corporate
money for political donations. Acting on behalf of the city's pension
funds, Thompson has also submitted shareholder proposals at six companies
calling for annual elections of all the directors. At 13 companies Thompson has
submitted proposals requesting annual disclosure of the global social,
environmental and economic impacts of their business operations. At four
companies the comptroller requested the establishment of a
pay-for-superior-performance standard in their executive compensation plan for
senior executives.
Hedge fund SAC Capital, led by Steve Cohen, has acquired
a 5.1% stake in Phelps Dodge in a bid
to stop a merger, agreed by the US copper miner’s board last month, with rival
mining firm Freeport-McMoran Copper & Gold. In
a regulatory filing SAC Capital said that the transaction, valuing Phelps Dodge
at around $25.9bn, would not provide full and fair value to its shareholders and
would deprive them of the ability to maximise the return on their investment.
SAC also claimed that merging the business offered few, if any, synergies which
would use Phelps Dodge’s balance sheet to fund the purchase and it would create
disproportionate value for Freeport-McMoran’s shareholders. Therefore SAC
Capital said it would vote its shares against the merger.
Stork has labelled Centaurus
Capital and Paulson & Co
“irresponsible” for calling a third EGM at the Dutch conglomerate, this time
proposing a vote of no confidence in the board and a resolution to have any
management decision regarding acquisitions or disposals of over €100m to be
subject to shareholder approval. Stork argued this latter proposal would
severely limit the board’s ability to act quickly and would have a negative
affect on the company’s growth strategy. However, while Stork argued the
proposals would destroy shareholder value, it has convened an 18 January EGM to
vote on them. The two funds previously won investor support for a non-binding
proposal to sell off Stork’s aerospace division, which the company refused to
implement.
The activist US pension fund,
CalPERS, is to allow purchases of
shares in selected companies in China and other developing markets. The
share purchases will take place on a case-by-case basis as for the markets as a
whole the fund will retain its policy that prohibits public equity investments
in emerging markets countries that have failed to meet an annually required
composite threshold score based on country and market criteria. Factors include
market stability, transparency, productive labour practices, capital market
openness and market regulation. Currently investments in China, Colombia, Egypt,
Morocco, Pakistan, Russia and Venezuela are prohibited. However, Calpers said it
recognised that at least some of these countries contained companies that
offered promising investment opportunities.
January, 2007 |
