FTC Index Fund Probe, New ESG Standards, Airbnb's Pledge
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The pressure on passives continued apace this week with Bloomberg’s report that U.S. antitrust officials are asking companies seeking deal approval about their relationships with large institutional investors. At question is whether the “Big Three” of BlackRock, State Street and Vanguard are harming competition with their extensive shared holdings within industries – an issue known as common ownership. Index funds, however, say they are just minority shareholders with overstated influence.
Over in Davos, numerous attendees rolled out ESG-themed initiatives at this year’s World Economic Forum. One plan, from a group including the Big Four and a group of (unidentified) companies, will from 2021 provide a framework to standardize corporate reporting on employment standards and climate. The move is part of an effort both to unify ESG standards and to address concerns voiced by investors and, recently, by the SEC that it’s too hard to measure companies’ ESG-related performance.
Airbnb CEO Andrew Chesky, meanwhile, echoed the Business Roundtable pledge, announcing that his company will serve all stakeholders, including guests, hosts, communities and employees, in addition to investors. Airbnb has created a Stakeholder Committee within the company’s Board and has pledged to link “adherence to our principles” to compensation and goal-setting.
Have a great weekend,
Connor
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Bloomberg: Index Fund Giants Draw Antitrust Scrutiny in U.S. Merger Reviews
FTC is asking companies about influence of large shareholders; holdings by passive managers have raised antitrust concerns
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Financial Times: Davos 2020: Companies sign up to environmental disclosure scheme
Accounting standards offer standardised way of reporting sustainability effects
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The New York Times: Airbnb Imagines a ‘Stakeholder’ World
Brian Chesky, Airbnb’s co-founder and C.E.O., spoke about the company’s announcement that it will think about all “stakeholders” when it comes to corporate governance, not just investors
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The Wall Street Journal: Xerox to Nominate as Many as 11 Directors to HP Board
Xerox in recent weeks bought a small HP stake
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The Wall Street Journal – Heard on the Street: Activist Investors and the Art of the Deal
Hedge funds spent most of their cash on M&A campaigns in 2019, a trend that should continue this year
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Financial Times – Lex: ValueAct/Jeff Ubben: nice guys finish up
As the industry tightens up, now is a good time to bow out
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Financial Times: Shareholder activist readies hostile takeover of Toshiba unit
Approach from Murakami family would up the stakes in a pivotal corporate governance battle
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Financial Times – Opinion: The index providers are quietly building up enormous powers
Passive investing’s rise has helped make the benchmark setters the new gatekeepers of capital
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Bloomberg: The World’s Most-Profitable Hedge Fund Is Now a Climate Radical
Chris Hohn runs $30 billion, and he’s ready to force companies to change
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Bloomberg: Greta Thunberg’s Endorsement Lands Polish Coal Miner in Hot Water
A Polish coal mining union chided one of its leaders for meeting climate activist Greta Thunberg as a misstep that undermines their efforts to keep coal as the country’s key source of energy
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Bloomberg: Elliott Takes $760 Million Evergy Stake in Push for Overhaul
Hedge fund says changes could unlock $5 billion in value; Elliott has a history of pushing for changes at big companies
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Reuters: Activist hedge fund Elliott sells stakes in Hyundai Motor companies: paper
Elliott Management sold all its shares in Hyundai Motor Group companies last year after it was thwarted in its campaign for huge special dividends and board seats
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Washington Post: Goldman Sachs CEO says it won’t take companies public without a diverse board member
David Solomon said Thursday that the bank would not take companies public in the United States and Europe if they do not have at least one diverse board director
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Harvard Law School Forum on Corporate Governance: Dealing with Activist Hedge Funds and Other Activist Investors
A memo from Wachtell, Lipton, Rosen & Katz reflects on 2019 in activism, the tactics activists used to agitate, and how companies can plan and respond to activist engagement
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Harvard Law School Forum on Corporate Governance: Towards a Common Language for Sustainable Investing
Following the BlackRock CEO and Chairman’s letter to CEOs, BlackRock Vice Chairman Barbara Novick provides further color on the fund giant’s approach to sustainable investing
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Refinitiv: Environmental metrics and preserving capital report
Refinitiv look at their ESG database to understand what companies are doing to improve their impact on the environment, and which are positioning themselves for success in the transition to low-carbon economies
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A first-ever event for Bloomberg. Speakers include Cristiano Guerra, Managing Director, Special Situations Research at ISS; and Don Bilson, Head of Event-Driven Research at Gordon Haskett.
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Speakers include the Wall Street Journal duo that covers WeWork; The Honorable Kathaleen McCormick, Vice Chancellor, Delaware Court of Chancery; Alex Stamos, former Chief Security Officer at Facebook.
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Speakers include Elad Roisman, SEC; James Williams, U.S. Dept. of Labor; Elisse Walter, Occidental Director
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Speakers include Starboard's Jeff Smith, Corvex's Keith Meister, Elliott's Jesse Cohn and Impactive Capital's Lauren Taylor Wolfe.
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