Liontrust Responsible Capitalism Report 2024 - Flipbook - Page 115
MONITORING VOTING RIGHTS
Liontrust exercises its voting rights by aiming to vote actively its equity
holdings whenever possible. The Group considers this to be a key
element in fulfilling its fiduciary duty to clients while also supporting
effective corporate governance practices of investee companies.
Liontrust’s Responsible Capitalism team monitors all meetings to
ascertain if there are contentious policy recommendations. This could
include recommendations to vote against management-filed proposals.
The Responsible Capitalism team sends research from proxy advisor,
ISS, to the fund manager responsible for the holding prior to the
cut-off date for a vote. Fund managers, assisted by the Responsible
Capitalism team, retain the right to change vote instructions on a caseby-case basis. For example, fund managers may choose to change
a vote instruction following engagement with a company and/or
subsequent holistic analysis of the vote recommendation.
To ensure the investment teams are consulted on potentially material
proposals, the Responsible Capitalism team sends alerts about
holdings involved in the following activities:
• Mergers & Acquisitions/disposals
• Related party transactions
• Mandatory takeover bid wavers
• Re-incorporation proposals
Each investment team has discretion to vote as per its adopted
voting policy. Should it choose to vote against its own policy, the
team is required to provide a rationale as to why it has chosen to
do so. This information is maintained centrally by the Responsible
Capitalism team.
SIGNIFICANT VOTES
Liontrust defines a ‘significant vote’ as follows:
• By the size of holding: where Liontrust funds hold more than 5%
of a company’s market capitalisation;
AND
• Where there is a contentious vote (defined as where the voting
recommendations of management and ISS are different. This
could be about remuneration, board composition, director
elections etc);
OR
• Where there is a vote at a special meeting about a merger or
acquisition;
OR
• Where the vote is a shareholder proposal
Examples of significant votes, by investment team:
• Shareholder proposals
• Other non-routine items or controversial items
SUSTAINABLE INVESTMENT
Company
Abcam Plc
Meeting Type
Annual
Date of vote
17/05/2023
Why vote is
considered significant
Vote against a company’s
remuneration where the voting
policy recommended a vote in
support of management.
Proposal summary
Approve Remuneration Report
Vote instruction:
Against
ISS/Custom Policy
Recommendation
For
Voting rationale: Over the last few years, Liontrust’s Sustainable
Investment team have had several interactions with Abcam regarding
the group’s remuneration policies and the transparency of its targets
and reporting. Following an initial meeting on the company’s
Value Creation Plan in early 2021, the Sustainable Investment
team wrote to Abcam’s Chairman expressing two key concerns.
One concern regarded reasons for setting bonuses. This followed
a letter to shareholders suggesting a need for larger rewards
to be paid out due to prior performance not being sufficiently
compensated, rather than correctly setting stretching targets ahead
of time. Another concern related to the lack of disclosure around
benchmarks used to determine target payouts. When these were
disclosed, the Sustainable Investment team disagreed with the set of
peer group companies which Abcam had benchmarked themselves
against. Since writing its letter, the Sustainable Investment team felt
its concerns were never fully addressed and Abcam continued to
show questionable use of benchmarks, as demonstrated by some of
the communications around the Danaher acquisition. Overall, the
team was left with the impression that the Company was aiming
to be sold and executives paid out quickly, rather than prioritising
employees and shareholders.
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