Norges Bank: Tid til at gentænke performance shares: I et indlæg skriver investeringschefen i Norges Bank under overskriften ”Time to rethink performance shares?”, at ”this is the year that the two leading proxy advisors separately ask clients whether to abandon their favoring of CEO ‘performance shares’ over simpler stock incentives. That is significant because both Institutional Investor Services (ISS) and Glass Lewis for years have heralded threeyear performance metrics for equity grants as a measure of good compensation practices. The problem is that it does not seem to work. And it does seem to be expensive. ISS and Glass Lewis should be commended for listening to concerned investors, like ourselves, and openly inviting views on the merits of simpler, more transparent and longer-term equity grants as replacement for popular but complex performance-conditioned grants. Both agencies have transparently published their consultations online, for which they also deserve credit. See ISS’ Annual Global Benchmark Policy Survey (questions 15-20) and Glass Lewis’ 2024 Investor Client Policy Survey. We have officially been among the skeptics on performance shares since we published a position paper on CEO compensation in 2017. Both ISS and Glass Lewis note that some investors, and maybe a growing number, question current practice.” En stribe danske børsnoterede selskaber udsteder performance shares til den daglige ledelse.
Forskere: Skal det fremlægges offentligt, når bestyrelsesmedlemmer fratræder i protest eller efter uenigheder: Forskere skriver under overskriften ”The Sound of Silence in Corporate Director Resignations”, at ”despite the governance benefits of resignations in protest, we show that outspoken director resignations are few in number. We undertake an intensive theoretical analysis of the vectors that limit the desire or ability of directors to resign in protest. We highlight that Delaware Court of Chancery decisions Puda Coal and Fuqi limit the ability of directors to resign in protest due to fears of personal liability for breach of fiduciary duty. Similarly, we note that directors prefer to resign quietly to preserve their reputation in the director labor market. We illustrate structural biases in the boardroom that may impede directors from resigning in protest and negatively affecting their fellow peers. Lastly, we describe the effect of director compensation on their decision whether to outspokenly depart. Beyond the departing director, we highlight potential limitations on firms to disclose resignations as “outspoken.”
Forskningspapir: 25 olieselskaber, heraf de fleste statsejede, står for halvdelen af den globale CO2-udledning fra industrien: I papiret med titlen ”Dirty SOEs” hedder det, at ”Over half of industrial emissions since 1988 can be traced to just 25 fossil fuel firms, but strikingly, among the top polluters, state-owned enterprises (’SOEs’) and other government-controlled entities dominate. Only one private company, ExxonMobil, breaks into the top 10. SOEs are the biggest ‘externalizing machines’ when it comes to carbon emissions. SOEs differ from private firms in several important ways. They are typically controlled by their sponsoring government, even if some of their shares are publicly traded. This makes them less susceptible to shareholder activism and other forms of stakeholder pressure that can influence private companies. SOEs often enjoy government protection, tax advantages, and financial support that also insulates them from market forces. While this insulation can lead to operating inefficiencies, it also allows them to operate with less regard for public opinion or environmental concerns. The outsized role of SOEs in global emissions creates significant risks for climate initiatives focused solely on private firms. For example, divestment campaigns targeting public companies could simply shift fossil fuel assets to SOEs or private entities with even less transparency and oversight. This could reduce available information about climate risks and make effective regulation more difficult. Well-intentioned efforts aimed at private companies may have unintended consequences if they ignore the role of SOEs.”
Morten W. Langer
