The week in investor relations: Man Utd and Juventus investor criticism, human capital focus at the SEC and bumper pay for AstraZeneca CEO
– The Financial Times (paywall) reported that one of the top shareholders in Manchester United and Juventus criticized the football clubs for backing the European Super League, the breakaway football competition that rapidly collapsed after provoking strong opposition from fans and politicians. Lindsell Train, which owns stakes in the English and Italian football clubs, said the announcement of the Super League project had come as a ‘surprise’. According to the FT, Lindsell Train had meetings with the two clubs and expressed ‘disappointment about the reputational damage Juventus and Manchester United have inflicted on themselves’.
– New SEC chair Gary Gensler made rulemaking around human capital management an early priority, according to Reuters. Speaking to an audience of agency and academic researchers on Thursday, Gensler said: ‘Investors increasingly want to understand information about…. one of the most critical components of companies: their workforce.’ He added that staff will propose a new rule that could require disclosure of workforce diversity data, information about part-time versus full-time workers, and employee turnover data. The move highlights Gensler’s prioritization of ESG, with the SEC still open for comment letters about climate-related disclosures.
– CNBC reported that AstraZeneca shareholders approved CEO Pascal Soriot’s pay package proposal by a narrow margin after advisory groups said the rewards were excessive. At the company’s AGM, 60.19 percent of votes were cast by shareholders in favor of approving Soriot’s pay proposal. The company said it recognized that a ‘meaningful proportion of shareholders’ were against the change to directors’ pay and would continue to engage with them. ‘The board’s approach... still continued to position executive remuneration well below market levels in the global pharmaceuticals industry and did not accurately reflect AstraZeneca’s improved position in the European market,’ it said.
– Sumitomo Mitsui Trust Holdings, parent company of Japan’s Sumitomo Mitsui Trust Bank, is planning to cut its cross-shareholdings, currently worth around ¥1.4 tn ($12.8 bn), to zero, according to Nikkei Asia. The financial company is the first major Japanese bank to decide on a policy to sell all cross-shareholdings, as it seeks to improve governance. Nikkei reported that Sumitomo Mitsui plans to sell shares worth ¥250 bn in market price in two years. Cross-shareholdings are criticized as hollowing out voting rights because they usually do not oppose any company proposals. Nikkei said the financial company holds cross-shares in around 900 firms.
– The Guardian noted that, according to a report from the Institute for Policy Studies, the CEOs of some of the US companies with the lowest-paid workers saw an average pay rise of 29 percent last year while their workers saw a 2 percent decrease. The institute calculated that the average CEO compensation in 2020 was $15.3 mn when looking at the 100 companies with the lowest median wage for workers in the S&P 500 index. The median worker pay was $28,187. The authors of the report urge support for a bill introduced by Bernie Sanders that would incentivize companies to narrow the pay gap between workers and top executives by imposing a tax rate on companies with high gaps. Public companies are required to report the ratio between their CEO and median worker pay to the SEC.
– The US Department of the Treasury last month started the process of establishing a long-awaited corporate ownership registry, but the Wall Street Journal (paywall) said the agency is already facing diverging views on how it should work. A key issue for financial institutions and other stakeholders is how ownership information that is submitted to the Treasury’s Financial Crimes Enforcement Network (FinCEN) will be collected and verified, and who will have access to it. The registry is supposed to help the US clamp down on the illicit use of anonymous shell companies. Congress outlined the parameters for the new database in a law passed in January, but FinCEN must work out the specifics. That includes defining who qualifies as an owner and which companies will be exempt from submitting information.