Management teams of public companies continue to come under scrutiny from investors. Bloomberg reported this week that California Public Employees’ Retirement System (CalPERS) has been wielding its heft this annual general meeting season, voting against pay plans at more than half of its portfolio companies, protesting that executive compensation is not reflective of performance metrics.The stance taken by one of the largest U.S. pension funds is a wake-up call for CEOs
can serve as powerful ammunition for activist investors who want to showcase how a company’s leadership is out of step with shareholders.
Institutional Shareholder Services
also took a stand against Southern Copper Corp. this week, recommending that shareholders at one of the world’s largest copper companies withhold support from the entire all-male board, citing a lack of independence and gender diversity.
In other news, the debate on the purpose of a corporation continues. In an op-ed published in
The New York Times,
Harvard Economics professor N. Gregory Mankiw takes a leaf out of Milton Friedman’s book, asserting that a CEO’s objective is to maximize shareholder value and that CEOs are not equipped to take on social issues – and nor should they be. Instead, competent elected officials should hold sole responsibility for the well-being of society, he argues.
Also, in light of the SEC’s proposal to increase the 13F reporting threshold from $100 million to $3.5 billion, GPP has written a
thoughtpiece
on what this move will mean for issuers: More darkness, less light.
Starting this week, the newsletter will be taking our annual summer break and will return in early September.
Have a great weekend and a relaxing rest of the summer,
Morgan and Gabriella
