Voting policy at general meetings
Transcription
Voting policy at general meetings
Voting policy at general meetings June 2016 1. Exercising voting rights in the interest of investors As one of the leading fund managers in Switzerland, Swisscanto invests in shares of Swiss and foreign companies through its investment funds. By investing indirectly through funds, the investor entrusts the fund company with the exercise of voting rights at shareholders‘ meetings and, in accordance with the fund contract, expects the fund company to exercise those rights in his best interest. Because of the often significant shareholdings in Swiss companies, Swisscanto follows the “2016 Swisscanto Sustainability Proxy Voting Guidelines for Swiss Companies” guideline, which focuses on specific concerns of Swisscanto. For companies headquartered outside Switzerland, the ISS “2016 Sustainability International Proxy Voting Summary Guidelines” apply. English versions of both voting policy documents are available on the Internet. With the active and independent exercise of voting rights in its active and passive investment funds, Swisscanto practises a systematic and responsible exercise of shareholders‘ voting rights for its investors. The guidelines for the exercise of voting rights are applicable within the Swisscanto Group for both fund companies, Swisscanto Fund Management Company Ltd. in Switzerland and Swisscanto Asset Management International S.A. in Luxembourg. Both fund companies rely on the same voting policy, but have their own decision-making bodies. The present voting policy outlines the principal guidelines applied by Swisscanto when evaluating proposals submitted by the board of directors. Swisscanto always votes at general meetings of listed companies with their corporate domicile in Switzerland, provided that the voting stake in the company is higher than 1% or the market value of the shares held exceeds CHF 1 million. In the case of foreign equities, a vote is cast on all agenda items if at least one motion contradicts investors‘ long-term interests. With foreign companies, the minimum requirements for actively exercising voting rights are 1% of the shares held or a market value of at least CHF 10 million. 2. Basic principles of voting policy A proper corporate governance is the central component of a corporate strategy aligned to the long-term sustainability and enhancement of corporate value. Swisscanto bases the exercise of voting rights on a number of Swiss and international corporate governance rules, as well as on the United Nations’ Principles of Responsible Investment (UN PRI), that specify a comprehensive package of environmental, social and governance standards for the decision process. The basic principles of Swisscanto’s voting policy were developed in collaboration with ISS (Institutional Shareholder Services Inc.), the world’s leading shareholder consultant. Voting policy at general meetings June 2016 3. The main voting guidelines The points below are a selection of the main points on the agenda subject to voting which are often controversial and frequently cause Swisscanto to vote against the recommendation of the board of directors: 3.1. Dividends Dividends are the shareholders’ financial share of the profit and should be paid to the shareholders. Swisscanto votes against dividend payout proposals when the dividend payout ratio has been below 30% for several consecutive years or if the company’s financial situation does not justify payout. For Swiss companies, the threshold is 10%, in which the double tax burden borne by large private shareholders is taken into account. 3.2. Discharge Granting discharge restricts shareholders’ possibility of recourse against boards of directors. Therefore, Swisscanto refuses a discharge in cases of gross misconduct or of a legitimate suspicion of criminal acts by a board. Swisscanto Fund Management Company Ltd. 1/3 3.3. Capital increase Capital increases without subscription rights for existing shareholders dilute earnings for those existing shareholders. Swisscanto authorises the board of directors to carry out, at its sole discretion, a capital increase to a maximum of 100% of the existing capital, provided that the subscription rights for existing shareholders are guaranteed. Without subscription rights, a cap of 20% applies. Regular capital increases are evaluated on a case-by-case basis, for example when used for an acquisition or for strengthening the balance sheet. For Swiss companies, a limit of 20% of the existing capital applies for conditional or authorised capital, provided that subscription rights are not excluded. In addition, Swisscanto votes against capital increases for employee participation programmes. 3.4. Capital structure Unequal membership rights cause individual shareholders to have disproportionate weight in relation to the capital employed. Swisscanto adheres to the “one share = one vote” principle and opposes the introduction of share classes with different voting powers as well as of voting restrictions. 3.5. Takeovers and mergers Acquisitions are part of a dynamic business, but they can also lead to substantial losses. Approval of mergers or acquisitions is given on a case-by-case basis, taking into account the following criteria: Appropriateness of the valuation Market reaction indicated by the share price Does a merger make sense strategically? Are there any conflicts of interest that favour certain individuals or specific groups? How does the corporate management (governance) change? 3.6. Sustainability Swisscanto believes that companies will succeed in the long run, and thereby act in the interest of their shareholders, if they shape their processes in a socially responsible manner and optimise them from an ecological and economical point of view. The shareholders can encourage companies to be active in this regard. Topics in ESG (Environmental, Social and Governance) areas are usually not dealt with at general meetings. In the U.S., shareholder proposals regarding ESG themes are already widespread, while this issue is gradually gaining importance in other markets. Measures that contribute to greater transparency with respect to ESG issues are supported if they can be implemented at reasonable cost levels. The following rules apply only to individual markets, especially Switzerland: Voting policy at general meetings June 2016 3.7. Independence of the Board of Directors Conflicts of interest may lead to decisions conflicting with the interests of shareholders. Swisscanto votes against the election of members of the Board, unless the majority of the Board of Directors consists of independent members. Members of the Board of Directors are considered nonindependent particularly if they represent a large group of shareholders, have business relations with the company as representatives of a group of interest or as private individuals, are among the founders of the company, have been working for the company for more than 12 years, have previously served as CEO. Moreover, Swisscanto votes against the election of members of the Board (e.g. CEOs) if they are members of the remuneration or audit committees. 3.8. Dual mandate A proper assessment of checks and balances is an effective method for reaching better decisions and ensuring effective controls. In the case of Swiss companies, Swisscanto is, in principle, against candidates who simultaneously chair the Board of Directors and act as CEO (dual mandate). Exceptions are made when the dual mandate is a transitional solution and organisational structures are in place as control mechanisms. 3.9. Remuneration Remuneration systems can offer the wrong kind of incentives, which are not in the interest of the company and its shareholders. In Switzerland, remuneration reports have been mandatory since January 2014 when the federal ordinance against excessive remuneration came into force, following adoption of the so-called fat cat initiative in a referendum in March 2013. For the remuneration of members of the Board of Directors and the Executive Board, the following principles apply: The remuneration system must be laid out clearly and comprehensively. Long-term incentive schemes must contain clear performance criteria. In addition, the remuneration amount has to be capped at a maximum. The remuneration must be consistent with the performance and be aligned with a long-term increase in value for shareholders (pay-for-performance). Payments that are guaranteed or subject to a large degree of discretion must be avoided. Agreements that involve a high payout, even in case of failure of management, must not be approved. The remuneration committee should not be composed of members of the executive board and should mainly consist of independent members of the board of directors. Swisscanto Fund Management Company Ltd. 2/3 4. Information to investors The actual voting behaviour of the two Swisscanto fund companies is documented in detail. The Swisscanto fund companies will, at any time, provide information about their voting behaviour at the request of an investor. Swisscanto makes its voting behaviour in each individual case available in a transparent manner on the Internet. The following link takes you to a search interface where you can enter the desired criteria. 5. Additional service for investors and clients Interested investors and marketing partners of Swisscanto can subscribe to an e-mail service to receive information and recommendations regarding how to vote at forthcoming general meetings. The recommendations follow the voting instructions for Swiss equities in force at Swisscanto. Contact Swisscanto Fund Management Company Ltd. Bahnhofstrasse 9 CH-8001 Zurich Phone +41 58 344 49 00 Fax +41 58 344 49 01 [email protected] This document may not be used for a public or commercial purpose without prior written permission of Swisscanto Fund Management Company Ltd. Voting policy at general meetings June 2016 Swisscanto Fund Management Company Ltd. 3/3