We may support shareholder proposals requesting the establishment of such policies. Proxy Voting Guidelines: TRPA. From time to time, shareholder proposals may be presented to promote auditor independence or the rotation of audit firms. In this context, we encourage companies to include in their disclosures a business plan for how they intend to deliver long-term financial performance through a transition to global net zero carbon emissions, consistent with their business model and sector. In addition, companies that have implemented dual or multiple class share structures should review these structures on a regular basis, or as company circumstances change. At a minimum, we expect companies to disclose their Scopes 1 and 2 greenhouse gas (GHG) emissions, 1 as investors need this information to The management of nature-related factors is increasingly a core component of some companies ability to generate sustainable, long-term financial returns for shareholders, particularly where a companys strategy is heavily reliant on the availably of natural capital, or whose supply chains are exposed to locations with nature-related risks. It is the responsibility of the Committee to evaluate and maintain proxy voting (go back), 16For example, BlackRocks Capital Markets Assumptions anticipate 25 points of cumulative economic gains over a 20-year period in an orderly transition as compared to the alternative. In assessing mergers, acquisitions, or other transactions including business combinations involving Special Purpose Acquisition Companies (SPACs) BIS primary consideration is the long-term economic interests of our clients as shareholders. However, in these instances, boards should periodically review the rationale for a classified structure and consider when annual elections might be more appropriate. BIS supports equity plans that align the economic interests of directors, managers, and other employees with those of shareholders. It is our view that well-run companies will effectively evaluate and manage material sustainability-related risks and opportunities relevant to their businesses. Companies with multiple share classes should receive shareholder approval of their capital structure on a periodic basis via a management proposal on the companys proxy. We encourage companies to disclose how their capital allocation to various energy sources is consistent with their strategy. 0000024781 00000 n
We will consider whether the transaction involves a dissenting board or does not appear to be the result of an arms-length bidding process. The roles and responsibilities cited here are not all-encompassing and are noted for reference as to how these leadership positions may be defined. 0000004677 00000 n
While mergers, acquisitions, asset sales, business combinations, and other special transaction proposals vary widely in scope and substance, we closely examine certain salient features in our analyses, such as: Contested elections and other special situations[9] are assessed on a case-by-case basis. Self identified board demographic diversity can usefully be disclosed in aggregate, consistent with local law. We may vote against certain directors where changes to governing documents are not put to a shareholder vote within a reasonable period of time, particularly if those changes have the potential to impact shareholder rights (see Director elections). Shareholders should have the opportunity to review substantial governance changes individually without having to accept bundled proposals. Where we conclude that a company has failed to align pay with performance, we will vote against the management compensation proposal and relevant compensation committee members. We acknowledge that these factors may also play into the various elements of diversity that a board may attract. As stewards of our clients investments, BlackRock believes it has a responsibility to engage with management teams and/or board members on material business issues and, for those clients who have given us authority, to vote proxies in the best long-term economic interests of their assets. 2036 41
We encourage the company to explain their executive succession planning process, including where accountability lies within the boardroom for this task, without prematurely divulging sensitive information commonly associated with this exercise. Where a company has failed to appropriately provide robust disclosures and evidence of effective business practices, BIS may express concerns through our engagement and voting. We generally support stock splits that are not likely to negatively affect the ability to trade shares or the economic value of a share. Examples of social issues include, but are not limited to, human capital management, impacts on the communities in which a company operates, customer loyalty, and relationships with regulators. BIS may support a request to reprice or exchange underwater options under the following circumstances: BIS may also support a request to exchange underwater options in other circumstances, if we determine that the exchange is in the best interests of shareholders. A growing number of companies, financial institutions, as well as governments, have committed to advancing decarbonization in line with the Paris Agreement. Where compensation structures provide for a front-loaded[10] award, we look for appropriate structures (including vesting and/or holding periods) that motivate sustained performance for shareholders over a number of years. The compensation committee should carefully consider the specific circumstances of the company and the key individuals the board is focused on incentivizing. BIS will generally not support these proposals. Our view of independence may vary from listing standards. WebGlass Lewis 2023 Proxy Voting Policy Guidelines are now available for the United States and Canada, Continental Europe, the UK, and ESG. However, the final voting decision is independent and voting authority rests We generally oppose plans that contain evergreen provisions, which allow for automatic annual increases of shares available for grant without requiring further shareholder approval; we note that the aggregate impacts of such increases are difficult to predict and may lead to significant dilution. We also ask boards to conduct a regular review of corporate governance and control structures, such that boards might evolve foundational corporate governance structures as company circumstances change, without undue costs and disruption to shareholders. Where the company already has a sufficiently robust majority voting process in place, we may not support a shareholder proposal seeking an alternative mechanism. We acknowledge that the use of peer group evaluation by compensation committees can help calibrate competitive pay; however, we are concerned when the rationale for increases in total compensation is solely based on peer benchmarking. 0000013568 00000 n
Increasingly, we see leading boards adding members whose experience deepens the boards understanding of the companys customers, employees, and communities. These guidelines are also intended to inform all investors on how to vote in an ESG-aligned way. 2023 Dodge & Cox. While we welcome any disclosures and commitments companies choose to make regarding Scope 3 emissions, we recognize that these are provided on a good-faith basis as methodology develops. 0000012287 00000 n
When determining whether to support or oppose an advisory vote on a golden parachute plan, BIS may consider several factors, including: It may be difficult to anticipate the results of a plan until after it has been triggered; as a result, BIS may vote against a golden parachute proposal even if the golden parachute plan under review was approved by shareholders when it was implemented. Employee stock purchase plans (ESPP) are an important part of a companys overall human capital management strategy and can provide performance incentives to help align employees interests with those of shareholders. Use of this site signifies that you accept ourTerms & Conditions of Use. We also recognize the potential benefits of dual class shares to newly public companies as they establish themselves; however, these structures should have a specific and limited duration. WebProxy Voting Guidelines February 2022 3 Introduction Proxy voting policy As an asset manager, RBC Global Asset Management (RBC GAM) has an obligation to act in the BIS will generally support annual advisory votes on executive compensation. There may be legitimate instances where underwater options create an overhang on a companys capital structure and a repricing or option exchange may be warranted. 0000013107 00000 n
Without a voting mechanism to immediately address concerns about a specific director, we may choose to vote against the directors up for election at the time (see Shareholder rights for additional detail). Consistent with our approach to voting on directors, we seek to hold the audit committee of the board responsible for overseeing the management of the independent auditor and the internal audit function at a company. Our evaluation of equity compensation plans is based on a companys executive pay and performance relative to peers and whether the plan plays a significant role in a pay-for-performance disconnect. A companys approach to human capital management (HCM) is a critical factor in fostering an inclusive, diverse, and engaged workforce, which contributes to business continuity, innovation, and long-term value creation. We will consider a variety of possible voting outcomes in contested situations, including the ability to support a mix of management and dissident nominees. Webguidelines are based on a commitment to create and preserve economic value and to advance principles of good corporate governance. We note that majority voting may not be appropriate in all circumstances, for example, in the context of a contested election, or for majority-controlled companies or those with concentrated ownership structures. Among these smaller companies, we look for the presence of diversity and take into consideration the progress that companies are making. We will typically support qualified ESPP proposals. Similarly, SASB Standards enable robust implementation of the Integrated Reporting Framework, providing the comparability sought by investors. BIS recognizes that climate change can be challenging for many companies, as they seek to drive long-term value by mitigating risks and capturing opportunities. Appropriate risk oversight of business-relevant and material sustainability-related considerations is a component of a sound governance framework. In all instances, we will evaluate the changes to shareholder protections under the new charter/articles/bylaws to assess whether the move increases or decreases shareholder protections. Examples of environmental issues include, but are not limited to, water use, land use, waste management, and climate risk. However, we may vote against the appropriate committees and/or individual directors if, in our view, the board is ineffective in its oversight, either because it is too small to allow for the necessary range of skills and experience or too large to function efficiently. Institutional Shareholder Services (ISS) and Glass Lewis, the leading proxy advisors in the United States, have announced updates and clarifications for their voting guidelines for the 2022 proxy season. 0000012093 00000 n
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