once Again banks hot General meetings before the big Swiss. Credit Suisse (CS), on Friday the shareholders, especially the wages of the Executive Committee and of the Board of Directors (BOD) in the focus, in the case of UBS, the on 2. In may, the Billions of dollars in fines, in addition. Pithy brand are talking to the Management of both banks, of course, but if it comes down to more than just a dwarf uprising, depends on a company: the American voting adviser ISS. And is increasingly becoming a Problem in itself.
founded In 1985, ISS (Institutional Shareholder Services) is now a global business , which is engaged in 13 countries, more than 1800 employees. Analyze 44 000 General meetings in 115 countries. According to its own information, ISS helps clients, which represented 4.2 trillion (4'200'000'000'000) voting rights, Filling in 10.2 million ballots.
20'000 companies covers the ISS Research Team. Free nothing's going on, of course. On the contrary, voting legal advice has become a profitable business. In October 2017 ISS for 720 million Swiss francs was sold to Private Equity firm Genstar Capital. Who wants to take the company to the stock exchange and billion earn.
"the ISS has very much Power."Vincent Kaufmann, Ethos
In Switzerland, is the influence of ISS, with the adoption of the Minder Initiative. Since 2015, pension funds are obliged to use General meetings to cast their votes, and it has to be voted on the remuneration of the BOD and Executive Board.
"the ISS has very much Power. Large sovereign wealth funds. We estimated the influence of ISS in the case of CS and UBS to at least 20 percent of the vote," says Vincent Kaufmann, managing Director of Ethos , the Swiss counterpart of the ISS. If all the consultants work together, they control about a third of the votes, which is enough for most of the General meetings for a majority.
However, ISS is not only an Advisor to the pension funds and mutual funds, which hold for both banks, the majority of shares. The company is a business partner of UBS and CS, and conceded twice. On the one hand, both banks have subscribed to the Service of ISS. But the collaboration goes even further, because ISS advises not only the shareholders but also the company itself. It's a question of how you should formulate your compensation report so that you can count with the approval of the shareholders. This happened about two years ago, as the CS had to seriously expect that your compensation will be rejected report.
The facts are not really open to
Transparent, however, is not. The facts are not laid down in the ISS-analyst report open, but only on a separate, eat-customers-to-access platform. "There is, the CS have paid for eat least per year 62'500 US-Dollar fee. There are three modules: the compensation consultation, the analysis of the remuneration of the Executive Board members and an ongoing trend analysis to good corporate governance was concerned," wrote the "Tages-Anzeiger" two years ago. Apparently, this is today, the ISS and the CS but want to give information.
The UBS does not take advice, however, it uses so-called Self-Assessment Tools, which can be used to test the remuneration report for themselves – of course for a fee. Even more profitable than remuneration advice to a program called ISS proxy exchange, which allows pension funds is apparently to be informed about all proposals to be submitted to the ISS clients and directly vote on.
Both at UBS as in the case of CS, the ISS is used product, although there is a competing product, namely, proxy edge of Broadridge. "The voting tool of ISS is good, but ultimately a money making machine, because the ISS and today Broadridge is a duopoly," says Kaufmann. How much it brings to the ISS, thanks to UBS and CS, is nowhere reported.
the ISS has the charge of bias.
the sensitivity of the collaboration, revealed two years ago, when the CS was announced shortly before the General Assembly a wage reduction of BOD and Management and ISS suddenly swung after it had actually welcomed, they wanted to reject the compensation.
This year, the ISS recommends the remuneration reports of UBS and CS to the adoption, although in both cases, the ISS criteria are not fully met: In the case of UBS, ISS notes that CEO Sergio Ermotti 2,52-earned times more than the operational chief of the comparable banks. "High Concern" (high concern) writes ISS in the report. Both at UBS, as well as in the CS-ISS criticized the lack of independence of the Chairman. Both are paid far too well to be considered as independent. In addition, be paid for both lush amounts in the pension Fund, what makes you in the eyes of ISS employees. In the case of the CS, more than 5 percent of all shares are needed for employee programs, which leads for the external investors to impairment.
the ISS has the accusation of bias is far from, and writes that there is a strict separation between the analyst Department and the consultants. A merchant is not convinced: "There is no transparency because: There ISS now a independent judgment, or you protect your customers?" the Thomas Minder calls for more transparency, so that the appearance of corruption. According to the father of the rip-off initiative, the company should identify at least the fees that you pay to the voting rights advisors, as the audit firms.
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Created: 20.04.2019, 21:49 PM