www.proxyinsight.com

March 2017Volume 4, Issue 2

VOTING NEWS

PROXY MONTHLY

IS EXECUTIVE PAY BROKEN?: EY PROPOSES A NEW MODEL

POISONED CHALICE?: INVESTOR VOTING ON GOLDEN PARACHUTES

SEVEN FOR 17: TACTICAL APPROACHES TO PROXY SEASON 2017

This year has so far seen

the focus of corporate

governance remain in the

U.K., with various investors and

regulatory bodies putting forward

their own version of corporate

reform.

The turbulence within the U.K.

corporate landscape is perhaps

unsurprising, given the U.K.

government’s recent green paper

on corporate governance reform,

and the likely appearance of a white

paper in the near future.

Indeed, investors and issuers

alike fear the damage government

intervention could do to shareholder

value and are likely attempting to

nip it in the bud.

For instance, a binding vote on

either the U.K.’s remuneration report

or remuneration policy if a company

faces considerable opposition over

two consecutive years has been

suggested by the Confederation

of British Industry and the Investor

Association respectively.

By contrast, Fidelity International has

taken a dif ferent approach, arguing

that remuneration committee chairs

should stand down if less than 75%

of investors support a company’s

remuneration policy.

In addition, other investors, such as

Standard Life Investments, Hermes

and even the Church of England

have threatened more aggressive

voting with regards to executive pay

in advance of the upcoming proxy

season.

Naturally, issuers, including Imperial

Brands, Barclays and Thomas Cook,

have responded to such sentiments

either by removing controversial

pay proposals from their upcoming

meetings or imposing pay caps on

their senior executives.

However, U.K. corporate reform

has not only been limited to public

companies. Following, the BHS

debacle, the possibility of corporate

governance requirements for large

U.K. private companies seems

on the horizon, with the Financial

Reporting Council already offering

to take on the mantle of regulator.

Given the recent agitation

on executive pay, this month

appropriately covers a range of

compensation related issues.

An article from EY introduces

their proposed One Element Pay

Model, which moves away from the

traditional pay package and instead

suggests a far more simplif ied,

stripped down solution to executive

remuneration.

Also, with the beginning of the proxy

season, the current pay proposals

receiving high opposition include a

large number of golden parachute

proposals.

As a result, this issue’s main

article looks at Proxy Insight’s

data surrounding this controversial

proposal, as well as the various

positions of investors on golden

parachutes in their voting policies

and the numerous arguments

adopted by both their proponents

and critics.

Continuing the theme of turbulence

in the current corporate governance

landscape, this month also includes

an article from Teneo Governance,

which gives seven helpful tips to

navigate the upcoming 2017 proxy

season.

These include companies reviewing

their approach to engagement with

proxy advisory firms and keeping an

eye on any regulatory changes that

may be happening this year.

Proxy Insight is the only tool to offer

the voting intelligence necessary to

navigate today’s investor relations

market. If you are not a client and

would like to take a look, we would

be delighted to offer you a trial.

Please get in touch.

nick.dawson@proxyinsight.com.

Proxy statementNick Dawson, Co-Founder & Managing Director, Proxy Insight Limited.

2

In recent months executive pay has

received an unprecedented level

of attention from a wide range of

stakeholders. While Remuneration

Committees, executives and investors

in many businesses may feel that

current pay structures are working

well and fit for purpose, the intensity

of noise we are experiencing tells us

that it is no longer reasonable for any

organisation to assume that there

is nothing it needs to be concerned

about.

First indications from the 2017 AGM

season show that in many cases the

noise in the system is now turning into

real opposition. Many would seek to

explain away this opposition as being

specific to a business, or focussed on

a discrete issue. We at EY believe that

this is now wishful thinking.

Much of the noise in the system

derives from the view held by some

that executive pay is simply too high. A

suggested solution is to regulate pay

by imposing a cap on the amount an

individual may receive. Whilst capping

executive pay would be relatively

straightforward to execute, we believe

that it will not fix the root problem and

could create considerable complexity

in itself.

That is not to say that change in

the executive pay arena would not

be welcome. There is work to be

done in several areas including

governance, communication and

alignment of interest. However, one

aspect on which stakeholders appear

to be agreed is the need for the

simplification of executive pay.

EY’s view is that this simplification

agenda cannot be addressed by

tweaking aspects of the traditional

package. This is not about the number

of performance measures used or

the length of deferral applied. It is

about acknowledging that a desire

for simplification requires agreement

on what is core to an executive

pay strategy and to focus on that

exclusively.

EY feels that many aspects of the

today’s pay structures, which have

been viewed as integral to the

traditional model, may not be the most

efficient way to deliver remuneration

or may simply be no longer relevant.

Whilst there are any number of

alternative structures and possible

approaches to improve the status

quo, EY believe the current challenges

cannot be addressed by existing

remuneration models. Accordingly we

have designed a new model, the One

Element Pay Model.

Under such a model, companies:

► Pay executives for the work they do.

► Pay them a bit more if they generate

better than expected outcomes.

► Pay them a bit less if they undershoot

expectations.

► Require that they buy shares every

year with a meaningful portion of their

remuneration.

EY believe the One Element Pay

Model for executives can offer

advantages not only to businesses of

many shapes and sizes, but also the

diverse group of stakeholders in the

executive pay debate.

For further information please contact:

Rupal Patel

Partner

RPate l15@uk.ey.com

+44 20 7951 0658

David Ellis

Partner

DEllis@uk.ey.com

+44 20 7980 0163

Is Executive Pay Broken?EY’s Rupal Patel proposes a new model

3

4

“IT IS ABOUT ACKNOWLEDGING THAT A DESIRE FOR SIMPLIFICATION REQUIRES AGREEMENT ON WHAT IS CORE TO AN EXECUTIVE PAY STRATEGY AND TO

FOCUS ON THAT EXCLUSIVELY.”

Global Proxy Watch is the weekly e-newsletter read by governance professionals in every advanced market around the world. Now in its 21st year, GPW is the authoritative source of information for international developments in corporate governance. Subscribers include leading pension funds and global asset managers, proxy advisory firms, proxy solicitors, corporate IR departments and general counsels, professional trade bodies, ESG standard setters, research firms and data providers, executive and director search firms, brokerage houses, investor relations firms, accounting firms, academic institutions, law firms and international governmental organizations. A sample issue can be found here: http://proxywatch.com/proxywatch-newsletter.php?file=2016/12/Vol20_45.pdf

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So far this year, many of the proposals

most firmly opposed by shareholders

have related to “golden parachutes” –

large payments made to a company’s

top executives if they lose their position

after a takeover. This is at least partly

because merger approvals, which

require a vote on golden parachute

plans, are one of the reasons a

company might call a special meeting.

These special meetings dominate the

agenda and bring issues like golden

parachutes to the fore, even though

they are relatively rare compared to,

for example, Say on Pay votes.

U.S. companies have been required to

submit golden parachute proposals to

a shareholder vote since 2011 under

the Dodd-Frank act. When a company

calls a meeting for the approval of

a merger, the law demands that

executive compensation plans be

disclosed and an advisory shareholder

vote on those plans be taken.

A Contentious Issue

Golden parachutes can be divisive

to say the least. Their supporters

argue that they make it easier to hire

and retain top executives, especially

in industries where mergers are

common. Proponents also believe

that, by softening any concerns

about dismissal, these payments help

executives to remain impartial if the

company does become the subject of

a takeover or merger. On top of this,

it is suggested that the cost of paying

out golden parachutes can form a

barrier to help discourage takeovers.

Those who oppose golden parachutes,

on the other hand, have answers to

each of these points. They argue that

executives are already offered ample

compensation and should not be

further rewarded simply for being let

go.

Such critics also point out that

executives have an inherent fiduciary

responsibility to act in the best

interests of the company and its

shareholders. A company’s executives

should not need additional financial

incentives to keep them objective. As

for the cost of compensating such

executives, opponents argue that this

is tiny compared to all the other costs

of a merger and is unlikely to form an

effective anti-takeover mechanism.

Golden Parachutes and Governance

Whether or not something is

considered good governance is often,

at least in part, defined by the policies

of major investors. When it comes

to compensating executives after a

merger, we have analyzed the policies

of ten key investors and found that

they mostly take a balanced position.

For example, BlackRock’s policy

says “When determining whether

to support or oppose an advisory

vote on a golden parachute plan,

BlackRock normally support the plan

unless it appears to result in payments

that are excessive or detrimental to

shareholders.”

In all the cases we looked at where an

investor’s policies take a case-by-case

position, there were specific, defined

issues that could lead to a vote against

the recommendations. The issues

most commonly included are:

► Benefits paid that exceed three times

salary and bonus.

► Single-trigger plans.

► Tax gross ups.

Single-trigger plans are golden

parachutes that do not require the

termination of the executive in order

to pay out. This means an executive

may keep their job in the newly-

combined company and still receive

compensation, so it is not hard to see

why investors take a dim view of these

provisions.

Data from Proxy Insight finds that investor voting on Golden Parachutes is not what it seems, with some investors voting in favor

of controversial proposals, despite their voting policies saying otherwise.

Poisoned Chalice?An analysis of investor voting on Golden Parachutes

6

Tax gross ups are increases to payouts

in order to compensate individuals for

money lost in tax.

For example, if an executive is

promised a payout of $1,000,000 and

the applicable tax rate is 20%, the

company would increase the payment

to $1,250,000. After the 20% tax has

been paid, the executive is left with the

promised $1,000,000 in full. Critics of

tax gross ups argue that if an executive

is fortunate enough to receive a multi-

million dollar payout, it should not also

be the company’s responsibility to foot

their tax bill.

The Voting Data

Using data from Proxy Insight, it is

possible to compare the policies

of investors with their actual voting

record.

While investors typically oppose the

priciple of golden parachutes, caveats

in their policies often result in much

higher support for the issue than might

be expected.

This is highlighted in Table 1, where

8 out of 10 investors supported more

than half of all golden parachute

resolutions they voted on, indicating

that there are at least some investors

paying lip service to good governance

through their policies, yet taking a very

different approach in practice.

This could help to explain the fact

that, despite their divisive nature and

tendency to provoke a fair amount

of shareholder opposition, golden

parachute proposals still rarely fail. Of

the 438 golden parachute proposals

that Proxy Insight has collected, all

but 30 proved to be successful with

the average level of support for these

being 83%.

As public opinion on executive pay

has turned increasingly sour, fund

managers have sought to appease

critics with assurances that they will

hold companies to account. The votes,

however, show a tendency to defer to

management.

The data in Table 1 also highlights just

how divisive golden parachutes can

be. The average level of support for

management among the ten investors

we analysed is 90%, but the average

level of support for golden parachutes

is only 68%.

Two examples of investors taking

a stand against golden parachutes

were particularly striking. Firstly,

Vanguard are normally very passive,

supporting management 95% of

the time. However, when it came to

golden parachutes they are far more

aggressive, supporting only 40% of

proposals. Even more militant are T.

Rowe Price. They normally support

management 93% of the time, but

voted in favor of golden parachutes

just 14% of the time.

2017 will likely see further escalation

of investor backlash against executive

pay generally. As this process

continues, it will be interesting to

keep an eye on golden parachutes to

see if wider discontent will result in

even more aggressive opposition to

executive compensation proposals.

“INDICATING THAT THERE ARE AT LEAST SOME INVESTORS PAYING LIP SERVICE TO GOOD GOVERNANCE

THROUGH THEIR POLICIES.”

7

Investor Votes For (%) Vote Against (%)

AllianceBernstein LP 70 30

BlackRock 93 7

BNY Mellon 66 34

Dimensional Fund Advisors, Inc. 68 27

Fidelity Management & Research 68 31

Goldman Sachs Asset Management LP 73 17

Northern Trust 99 1

SSgA Funds Management, Inc. (State Street) 90 7

T. Rowe Price 14 83

Vanguard Group, Inc. 40 59

Table 1: Investor voting on Golden Parachute proposals Source: Proxy Insight

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As most public companies approach

the start of Proxy Season 2017, investor

voting policies and the hottest trends

in corporate governance are important

content that highlight issues companies

will face at their annual meetings.

Equally important are the practical

considerations for how to navigate the

proxy advisors, engage with investors,

react to activists and position boards for

successful voting outcomes.

The landscape has changed in 2017.

Most of the fundamental views in

governance are out on the table. Say

on Pay as a ballot item is over five years

old, director independence has been

around over a decade, and Sarbanes-

Oxley drove significant changes in audit

committees nearly fifteen years ago.

What has evolved recently is the way

in which companies interact with the

governance community. A thoughtful

approach and clear messaging to the

various constituents that will influence

proxy season outcomes are as

important as the issues underlying the

narrative.

Here are “seven for seventeen” –

seven helpful hints for the 2017 proxy

season, along with do’s and don’ts for a

successful season.

1. Revisit your proxy advisor outreach

plan

Both ISS and Glass Lewis have new staff

in key roles, with changes in research

leaders over the past year. As the

governance community has expanded

and many proxy advisory leaders have

served in their roles for over a decade,

departures have accelerated and will

likely continue.

In addition, ISS has undergone several

ownership changes in recent years, and

the focus on being a governance data

provider has become a different value

proposition for both customers and

employees. Institutional knowledge and

opinions may not carry the same weight

as in the past, and you may, in some

cases, be meeting with less experienced

staff than you did last year.

Don’t rely on your past messaging to

resonate with proxy advisory firms. With

new staff at both major proxy advisors,

do review and refresh your narrative

to ensure the messaging is clear and

concise.

2. Leverage the benefits of potential

regulation to engage with ISS and Glass

Lewis

With the new Trump Administration,

regulation of proxy advisors may gain

traction. Proxy advisors have more

incentive to engage actively with the

governance community, especially

corporations, so they don’t alienate

companies and add fuel to the arguments

supporting regulation.

Don’t assume that proxy advisors are

not open to thoughtful discussion on the

issues. Do understand and participate

in their engagement channels. ISS has

many approaches to engaging with its

research team, and it is important to

understand what works and what is not

as effective when reaching out to their

staff.

3. Laser-focus your investor approach

Many investors are pressed for time and

struggle with the resources to engage.

Even the large investors have staffing

constraints and must increasingly

quantify which engagement requests

to accept. Their willingness to engage

may also be influenced by their portfolio

holdings and their policy interests.

Don’t treat engagement casually or

assume that what worked in the past

is optimal. Do establish year-round

communication channels, make your

reasons for engagement clear, and follow

up on any agreed-upon action items.

Dr. Martha Carter and Karla Bos of Teneo outline seven useful hints for public companies preparing themselves for the upcoming

2017 proxy season.

Seven for 17Tactical Approaches to Proxy Season 2017

9

4. Be ready to pivot on regulation

Changes are coming at the SEC. With

vacancies at the Commission and

the departure of Mary Jo White, new

personnel and regulatory changes are

forthcoming.

The Republican Congress and the Trump

Administration already have Dodd-Frank

in their sights to repeal or amend key

provisions, including the CEO Pay Ratio

Disclosure, with general industry advice

to carry on for the moment and prepare

for inclusion of the ratios in the 2018

proxy material.

Don’t be caught off guard if new

regulations are implemented or

repealed, or if expectations for rolling

back provisions in Dodd-Frank do not

materialize. Do stay on top of changes

at the SEC.

5. Think activism every day

Activists have had mixed success, with

much coverage of the winners and

losers from the past year. Both groups

remain highly incentivized, and they will

remain part of the landscape.

An activist attack is not only an

opportunity for the activist to create

change, but it will be used as a calling

card for them to gain more investors

for their funds. Investor backlash to

excessive share buybacks and quick

settlements for board seats is trending

in 2017, and investors expect boards

to carefully consider any actions in a

strategic context.

Don’t settle too quickly. Do consider all

activist approaches seriously, ensuring

that a vulnerabilities assessment and

scenario planning are included in the

board’s must-have toolkit.

6. Invest in your board

Board vulnerabilities abound. Serving as

a board member is a part-time job that

requires a full-time commitment, and

can lead to exposure to law suits from

cyberattacks, audit issues or a multitude

of other risk factors.

Directors must have access to the

requisite resources, information, and

support needed to fulfill their fiduciary

duty while recognizing that in some

cases, this includes knowing how

to communicate most effectively in

meetings with investors and proxy

advisors.

Don’t exclude directors from engagement

meetings, since the meetings can be

more successful with the participation

of articulate, independent directors.

Do work with directors, particularly

board leaders, to be more visible in the

governance community.

7. Monitor social media

Monitor the messaging – it matters.

Beyond the traditional journalists and

news outlets, social media can influence

the voting outcome in profound ways,

not just the Presidential election or the

new Administration’s penchant for late

night Twitter messages.

It is important to remember that the

information being disseminated by

other parties does not have to be true;

it just has to be compelling for a social

media audience. Don’t assume that

the traditional news outlets tell the

whole story. Do track social media, and

consider that your investors and proxy

advisors will be exposed to its content.

Along with these tactical approaches

to Proxy Season 2017, investors and

proxy advisors will expect that all of

the engagement and disclosure will

tie back to strategic imperatives and

the creation of long-term value for

shareholders, particularly in a year when

the geopolitical climate is anything other

than what was anticipated.

BlackRock CEO, Larry Fink, was clear in

his 2017 letter to CEOs of BlackRock’s

portfolio companies: “As BlackRock

engages with your company this year, we

will be looking to see how your strategic

framework reflects and recognizes the

impact of the past year’s changes in the

global environment.”

With the continuous impact of political

changes, market developments,

regulatory attention and intensified

shareholder demands, the challenges

for CEOs and boards to navigate Proxy

Season 2017 will be intense. But agile

adaptation, with a focus on both the

strategic and the tactical, can go a

long way towards leveraging the new

challenges and changes to benefit

companies and their shareholders.

Dr. Martha Carter is a Senior Managing

Director and Head of Teneo Governance.

She leads Teneo’s corporate governance

division, advising CEOs and boards of

public and private companies on corporate

governance best practices, activism

defense, executive compensation,

shareholder engagement, strategy, and

other matters that come to the board.

Karla Bos is a Managing Director with

Teneo Governance. Ms. Bos has over 20

years’ experience in the financial and

legal services industry, with an emphasis

on corporate governance. She has a

successful track record of developing and

managing efficient, compliant systems

within fast-paced, rapid-growth, service-

intensive companies.

“THE LANDSCAPE HAS CHANGED IN 2017. MOST OF THE FUNDAMENTAL VIEWS IN GOVERNANCE ARE OUT ON THE

TABLE.”

10

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Save precious time.The definitive resource on activist investing.

Issuers cut executive pay

Over the last couple of months,

numerous issuers have cut their

executive pay as a direct consequence

of investor dissent.

Most recently, Safestore pulled its

remuneration policy and long-term

incentive plan after discussions

with its investors. Also in the U.K.,

Imperial Brands, Thomas Cook,

Anglo American and Barclays have all

been forced to scrap executive pay

structures – their remuneration policy,

strategic share incentive plan, share

awards and bonuses respectively –

in relation to the reality, or threat of,

shareholder resistance.

This phenonmenon has not been

exclusive to the U.K., Exelon also

recently cutting its executive pay by

5%, despite excellent performance at

the company. The cut is likely due to

last year’s shareholder revolt at the

company, where approximately 62%

of investors voted against Exelon’s

executive remuneration.

Proxy access in Canada

Last week proxy adviser ISS

recommended in favor of a proposal at

Toronto-Dominion Bank (TD) to allow

board nominations by shareowner

groups holding a 3% stake for three

years.

Canada, under its Corporations Act

and Bank Act, already allows proxy

access. However, due to its high

5% threshold, it is hardly ever used

by Canadian investors. Indeed, TD

opposed the resolution on the grounds

that it was non-compliant with the

Bank Act. Glass Lewis also agreed

with this sentiment and recommended

voting against the proposal.

Nonetheless, ISS and other Canadian

legal experts argue that the Bank Act

does not forbid lower thresholds being

used. Moreover, the Canadian Coalition

for Good Governance argued in 2015

for the threshold for proxy access to

be reduced to 3%. Unsurprisingly, this

faced strong resistance from Canadian

boards.

U.S. firms reawaken their legal

departments

A study produced by Proxy Impact,

the Sustainable Investments Institute

(Si2) and As You Sow, has found a

16 percent increase in submitted

shareholder proposals over the

January to mid-February period this

year, as opposed to last year.

However, the same period has also

seen the reawakening of various

companies’ legal departments, as

firms attempt to fend off shareholder

resolutions. Over the January to mid-

February period, U.S. companies

asked the SEC to omit 114 shareholder

resolutions, 41 of which were removed

by the commission. This represented

a 61 percent increase in company

challenges to shareholder resolutions

in comparison to last year.

Of the shareholder resolutions, 26

percent were on environmental issues

and 21 percent were on political

activity.

PIRC outlines pay ratio analysis

A data analysis conducted by PIRC has

outlined the highest and lowest pay

ratios between a company’s CEO and

its average worker for the FTSE 350.

The companies with the lowest pay

ratios were Shaftesbury, Shawbrook

and Londonmetric Property, all of

which had a ratio of 5:1. Great Portland

Estates, IG Group, Man Group, Jupiter

Find Management and Intermediate

Capital Group (ICG) also featured near

the bottom of the pay ratio table.

At the top of the pay ratio table was

BGEO Group, with a pay ratio of 731:1.

Although this may be due to the fact

that BGEO Group is based in Georgia,

which pay their workers considerably

less than U.K. employees. Sports

Direct came in second, with a pay ratio

of 400:1 Then came G4S (296:1), Evraz

(277:1) and Tesco (258:1).

12

News summaryA round-up of the latest developments in proxy voting.

BlackRock vows pressure on ESG

issues

BlackRock plans to impose new

pressure on companies to explain

themselves with regards to the risk that

climate change poses to their business

and boardroom diversity.

With regards to board diversity,

BlackRock is looking at numerous

issues including adding more women

to company boards. In one of its

documents, BlackRock wrote “diverse

boards, including but not limited to

diversity of expertise, experience,

age, race and gender, make better

decisions.”

According to Michelle Edkins, Global

Head of Investment Stewardship at

BlackRock, although some companies

have shown leadership in areas that

BlackRock considers priorities, others

are “probably not moving fast enough

given the risks to the business.”

ISS updates U.S. FAQs

Global proxy adviser ISS has updated

its frequently asked questions (FAQs)

for its U.S. proxy voting policies and

procedures. Below is a summary of the

main changes to ISS’ FAQs.

With regards to restricting binding

shareholder proposals, ISS has

clarified that it believes that amending

a company’s bylaws is a shareholder

right, and that shareholders should be

permitted to submit binding proposals.

In addition, imposing a supermajority

limit on such binding proposals will be

viewed by ISS as insufficient restoration

of the shareholder right.

If a director receives less than majority

support due to issues of attendance

with regards to board meetings,

ISS will consider a 75% attendance

rate the following year as a sufficient

response to remedy this.

Also on director attendance, ISS has

clarified its board attendance policy.

According to ISS, for companies with

three or fewer meetings per annum,

ISS will not vote against a director if

he/she miss only one meeting despite

the percentage of attended meetings

being below 75%. For new directors

who do not have advanced notification

of meetings, ISS will consider missing

a meeting due to scheduling conflicts

as an acceptable reason. If proxy

disclosure is insufficient to tell if a

director attended at least 75% of

company meetings, then ISS will vote

against that director.

Finally, ISS has clarified its position

on overboarding. According to ISS,

the boards of public companies and

mutual fund families are included

when determining if a director is

overboarded. The boards of non-profit

organizations, universities, advisory

boards and private companies are not

included.

No relationship between pay and

performance?

According to a study conducted by

University of Zurich economist Ernst

Fehr, there is no discernible relationship

between executive pay and company

performance – executives rewarding

themselves if they succeed or fail.

Mr Fehr found no relationship at

all between higher pay and greater

returns at companies, pay going up

despite how companies perform.

The data used was taken from 70 large

companies in Germany, Switzerland

and Austria.

Norway’s oil fund as a shareholder

Norway’s $905 billion oil fund, the

world’s largest sovereign wealth fund,

is one of the biggest shareholders

to vote against companies such as

Apple, Amazon, Berkshire Hathaway

and Facebook last year.

The fund, which owns on average 1.3

per cent of every listed company in

the world, revealed on Tuesday that in

2016 it opposed approximately 6,700

resolutions at annual meetings.

Although over half the oil fund’s against

votes were related to board issues,

such as overboarding and board

independence, the fund nevertheless

also voted on other topics, which

include company auditors and the

rights of minority shareholders.

FTSE Russell on Snap dilemma

The FTSE Russell has decided

to consult with large institutional

investors over whether to allow Snap

Inc. to join its various indexes despite

the fact that Snap’s shares hold no

voting rights.

Apparently, meetings with the

investors will allow the latter a chance

to express their reservations about

allowing companies that prevent their

shareholders voting on important

company issues onto the indexes.

According to Lynn Blake of State Street

Global Advisors, the structure of Snap

is “highly unusual” and its non-voting

shares are “certainly a concern.”

13

“IN THE U.K., IMPERIAL BRANDS, THOMAS COOK, ANGLO AMERICAN AND BARCLAYS HAVE ALL BEEN FORCED TO SCRAP EXECUTIVE PAY STRUCTURES.”