IR Monitor – 16th November 2022

This week’s news

FTI clients honoured in the Institutional Investor All-America Executive Team 2023 Rankings

This week we would like to begin by recognizing our clients that were honored in the II All-America Exec Team 2023 Rankings. This year 1,346 companies were nominated out of the more than 3,000 eligible companies, with 206 recognised as a “Most Honored Company.” Five of our clients earned this distinction, placing them in the 95th percentile of IR programs in America. Congratulations to Catalent, Eaton Corp., Thermo Fisher Scientific, WillScot Mobile Mini and Wolfspeed! Finally, two clients deserve special recognition for garnering a “clean sweep” – Thermo Fisher Scientific and Wolfspeed were ranked first in every eligible category. If it’s an honour to be ranked at all by Institutional Investor, a clean sweep is quite another accomplishment. Congratulations to all those companies recognised.

FTSE 100 chief executives’ pay nearly a quarter higher this year, boosted by bonus bonanza

FTSE 100 CEOs have experienced a pay boost of an average of 23% this year, equivalent to £3.9mn, reports the FT. The rise comes as a result of lower targets set during the pandemic, as well as many companies successfully bouncing back post lockdown. The article notes that the pay awards for 2022 highlight that “FTSE 100 companies were boosted by businesses opening up and demand returning after the pandemic”, but that this will likely be met by “greater investor scrutiny”, as businesses face a tough economic outlook in the coming year. Although the increases have sparked criticism from fair pay campaigners, the article notes that investors have been broadly supportive of management remuneration so far.

The corporate proxy ballot is taking centre stage for ESG, says Forbes

Investors’ expectations on issues such as climate change or workforce diversity and inclusion are increasingly visible, according to Forbes. This has been reflected in the 2022 proxy season in the US, as ballots saw a 25% increase in the number of shareholder proposals, largely driven by ESG-related demands. And whilst there has been a slight decline in the level of support for those proposals, estimates suggest that by 2025, around 33% of global assets under management will have ESG mandates. Given the surging interest in ESG, it is likely that almost all public companies will have to make even broader changes to meet the requests of shareholders and regulators for increased information related to ESG and to prepare for future shareholder proposals. Those changes will involve creating enhanced reporting and disclosure practices, and increased efforts to step up and enrich engagement with shareholders. To maintain shareholder support throughout 2023 and beyond, management teams and boards will have to find ways to effectively communicate both their commitment to ESG and strategies for achieving their ESG goals.

Approach to net zero “claptrap”

Stuart Kirk is no doubt a familiar name, having stepped down from his role as HSBC’s global head of responsible investing earlier this year after accusing central bankers and officials of exaggerating the financial risks of climate change. Now he is back with a weekly FT Weekend column aimed at personal investors and savers, and “egregious” net zero targets are in the crosshairs for his debut piece. “My industry’s response to the immense challenge of decarbonisation is one of the dumbest things I’ve seen in almost thirty years in finance”, Kirk states, calling climate commitment figures “hokum”. These pledges, he adds, are often made without clients’ knowledge or permission. And claims that initiatives help to reduce emissions are thwarted by the fact that no distinction is made between financing and trading. His conclusion? Far from saving the planet, claimed steps towards net zero are “pure virtue signaling”.

CEOs are saying the R-word, a lot

Despite a surprisingly resilient labour market in the US, talk of a downturn is in the air according to the New York Times. Earlier this month the paper reported unemployment remaining low and wages being on the rise. While this strengthened inflation concerns for the Federal Reserve, it was largely celebrated as a political win and a net positive. Yet although things look rosy on the employment front, business leaders are anything but confident on the state of the economy. Among the 409 S&P 500 companies that have held analyst calls this quarter, the topic of a recession was raised 165 times, according to market data provider Sentieo. A year ago, the word was only uttered 42 times during calls. Worries about a recession are not confined to the US either. Of the 9,000 companies across the globe that Sentieo tracks, the R-word was discussed in 2,122 company conference calls over the last quarter: in the same period last year, it was under 200. In the words of interim Starbucks CEO Howard Schultz, business leaders are “highly concerned and humbled by the environment”.

And finally… SoftBank to drop flamboyant earnings presentations

Masayoshi Son, the billionaire boss of SoftBank, is known across the industry for his unconventional earnings presentations. Flying unicorns and geese laying golden eggs are among the quirky characters to have graced his quarterly earnings slides over the last few years. However, this approach looks set to change as the Japanese conglomerate navigates a tricky period – the world’s most active startup investor is facing plunging tech valuations and reported heavy losses in the first half of the year. With serious market conditions to contend with, Mr. Son’s mythical creatures will now take a back seat, to be replaced by a more subdued presentation from SoftBank’s CFO. They will be sorely missed by the IR Monitor.

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