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Workers’ Capital News - March 2013

In this issue:

  • Governance and Disclosure

    Swiss vote for corporate pay curbs/ TUC weighs in on bankers' bonuses

  • Shareholder Activism

    Key Proxy Vote Survey from Canada’s SHARE/ Four big managers get low scores on AFL-CIO labor proxy-voting issues/ FairPensions rebrands as ShareAction to clarify message

  • Pensions and Investments

    CalPERS backing ESG engagement with stock purchases/ Recent reports on sustainable investment globally diverge

Governance and Disclosure

Swiss vote for corporate pay curbs

As reported in Financial Times, a referendum in Switzerland to rein in executive compensation has passed with 68% voter approval. Measures include binding shareholder votes on executive pay, a ban on “golden handshakes”, annual re-election for directors, as well as potential criminal charges for not abiding by the new rules. The Swiss vote follows the approval of a European parliamentary proposal to put a cap on bankers’ bonuses. Other EU countries are also taking measures to limit executive compensation, including bonus limitations in the Netherlands and binding shareholder votes coming into effect in the UK starting in October.

TUC weighs in on bankers bonuses

The TUC has voiced support for the EU’s move to cap bankers’ bonuses across Europe, in addition to highlighting bonuses at Barclays where 428 workers were paid £1million or more last year and at HSBC where the head of HSBC is to be given a bonus of £2million just days after the chief executive at Lloyds was awarded a bonus of £1.5million. In reference to the Swiss vote, TUC General Secretary Frances O’Grady said “The [UK] government should be following the example of Switzerland and making a concerted effort to curb executive pay.”

Shareholder Activism

Key Proxy Vote Survey from Canada’s SHARE

SHARE has launched an interactive website (www.proxyvotesurvey.ca) with this years’ release of the annual Canadian Key Proxy Vote Survey, where individuals and institutions can review votes passed on their behalf by participating investment managers on key ESG issues. As reported in Responsible Investor, the survey found that while the majority of shareholders continue to vote in line with management, significant shareholder opposition was registered for particular votes on issues such as executive compensation and social license to operate.

Four big managers get low scores on AFL-CIO labor proxy-voting issues

The AFL-CIO recently released its 2012 Key Votes Survey and 2012 Investment Managers Voting Records.  As reported in Pensions & Investments, the AFL-CIO surveyed 121 investment managers and 5 proxy voting service providers on support for labour issues in proxy voting, with lowest scores going to Vanguard Group, Northern Trust Investments, BlackRock and Fidelity Investments.

FairPensions rebrands as ShareAction to clarify message

As reported in Professional Pensions, FairPensions will be changing its name to ShareAction as of 18 March to reflect a broadening of its mission of promoting responsible investment.

Pensions and Investments

CalPERS backing ESG engagement with stock purchases

As reported in Pensions & Investments online, CalPERS will be buying additional shares from companies it is engaging on ESG issues. The initiative is indicative of the belief that additional returns can be earned with a portfolio of stock pickings specific to companies that the pension fund engages with, and could potential be embraced by other asset owners if the portfolio can prove successful return on investment through engagement.

Recent reports on sustainable investment globally diverge

The Global Sustainable Investment Alliance has released the 2012 Global Sustainable Investment Review. The report finds at least US $13.6 trillion of professionally managed assets incorporate ESG concerns in investment selection and management, which represents approximately 22% of total assets under management in surveyed areas, including Europe, the US, Canada, Asia, Japan, Australia and Africa.

The Network for Sustainable Financial Markets has issued a White Paper on the State Ownership 2013 which finds  that a much smaller percentage of portfolios are managed with sustainability in mind, closer to US $1.5 trillion, almost a tenth of the GSIA report. The NSFM paper reports that much of the gap between the findings are represented by large pension funds that engage with companies and otherwise invest in benchmark indices or through external managers.

*Please note that viewing linked articles requires registering for free in the case of the Financial Times and Pensions & Investments online sites, and a subscription in the case of Responsible Investor.

Disclaimer: The CWC News Digest is a compilation of news items covered in industry publications. The content does not necessarily reflect the views of the Committee on Workers Capital or its members. Comments and reflections on news items may be sent to acard@share.ca.

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