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28.09.2017 15:17:00

Kingsdale Advisors Unveils 2017 Proxy Season Review

TORONTO, Sept. 28, 2017 /CNW/ - Kingsdale Advisors releases its annual 2017 Proxy Season Review, a report designed to equip public companies, boards, and advisors to face the changing expectations of shareholders, demands of activists, and policies of proxy advisors.  The report provides a detailed examination of the key statistics of this past proxy season and details a number of important case studies.

"This year, we saw issues around corporate governance take centre stage, reflecting the growing importance of topics like compensation, environmental and social issues, and shareholder engagement to both issuers and shareholders," said Wes Hall, Executive Chairman and Founder of Kingsdale Advisors. "The bar for governance standards only continues to rise. Proxy advisors, Institutional Shareholder Services (ISS) and Glass Lewis are tightening their policies and investors, even those that are considered passive, are becoming increasingly focused on management and board accountability.  Just this week we saw activist Paulson & Co. announce they are forming a council to hold gold companies responsible for disappointing results coupled with lucrative compensation.  What might have worked this year may not fly next year. Heightened vigilance on behalf of directors is required in the new paradigm of corporate governance."

Kingsdale defined the most noteworthy developments of the 2017 proxy season as:

  • Activism is hot, hot, hot. This year, we saw the reversal of success rates, with activists scoring a series of wins or partial wins. While there have been fewer public proxy fights, in 70% of the fights this year, activists won some or all of their objectives, whereas success rates in 2016 and 2015 were 33% and 55%, respectively.  We estimate only 1/3 of activist actions in Canada become public.
  • Tightening the reins on executive compensation. This year, we tracked a record 18 ISS and 12 Glass Lewis recommendations against say-on-pay.  More companies than ever before failed to reach Glass Lewis' 75% marker that triggers the board responsiveness policy (it's 70% for ISS).
  • The first foray of proxy access into Canada with proposals at TD and RBC is just the beginning. Having passed at TD, we expect other issuers will receive similar proxy access proposals in the future. It is believed that most, if not all, pension funds in Canada will support proxy access shareholder proposals and that ISS will continue to support such proposals as they did with TD and RBC.
  • Environmental, social, and governance (ESG) issues are impacting how investors see issuers. Investors are becoming increasingly interested in companies' ESG profiles alongside their fundamentals, while companies may find it difficult to understand how their ESG profile will be understood and benchmarked. With an increasing belief that long-term sustainability can equal long-term results and with a new generation of socially and environmentally conscious investors accumulating wealth, issuers can expect heightened scrutiny.
  • There's no such thing as a friendly deal. While the number of public activist campaigns has decreased this year, we have seen an increase in shareholder intervention in transactional matters. Over the last three years, ISS has more than doubled the number of M&A transactions it has recommended against.   
  • "We pride ourselves on providing our clients with more than facts and figures – it's our insight and ability to identify trends before they're trends that provides true value," said Amy Freedman, Chief Executive Officer. "As the only strategic shareholder advisory firm with a full in-house governance team with former ISS experienced executives, we draw on that knowledge and our continued engagement with shareholders to ensure our clients are well-equipped to navigate the changing governance landscape."

    About Kingsdale Advisors:
    With offices in Toronto and New York, Kingsdale Advisors is the leading advisor to public companies on all shareholder, governance, and transaction related matters having acted on the largest and highest profile proxy fights, transactions, and other special situations. Since 2003, public companies across North America have looked to the expertise of Kingsdale Advisors to secure the success of transactions or resolutions driven by shareholder votes. Kingsdale Advisors' multidisciplinary team offers an array of specialized services focused on strategic and defensive advisory, governance advisory, strategic communications, and voting analytics.

    Please visit us at: www.kingsdaleadvisors.com
    https://www.linkedin.com/company/kingsdale-advisors
    @KdaleAdvisors

    SOURCE Kingsdale Advisors

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