Investor Relations Week: Wall Street seeks to ‘bypass’ redemption tax, Invesco launches metaverse-focused equity fund and Ben & Jerry’s loses lawsuit against Unilever
– Bankers and Wall Street lawyers are looking for ways to help companies buy back shares next year without having to pay millions of dollars in extra taxes, the report reported. FinancialTimes (paywall), in a move he says jeopardizes one of the main revenue generators of President Joe Biden’s climate and health package.
Central to their efforts is the use of accelerated stock buyback programs, a commonly used mechanism for companies to complete buybacks worth billions of dollars. Although the programs are recorded as having been executed in a single day, it often takes several months for banks to complete the transactions, the document says, adding that the plans depend on whether the next directives from the Treasury will count the day. where the company will take the plunge. in cash and receives his shares on the redemption date, or whether he will have to wait for the investment banks to actually buy the shares on the open market.
– CityWire reported that Invesco has launched a dedicated Metaverse equity fund. The geographically diverse fund, made up of companies from the United States, Asia and Europe, will include companies helping to facilitate, create or benefit from the growth of immersive virtual worlds.
Tony Roberts, who oversees Asia-focused equity strategies at Invesco, said it’s been estimated virtual and augmented reality could be a £1.4 billion market ($1.6 billion). dollars) by 2030.” As the applications of the metaverse to entertainment become better understood, the interconnectivity it enables will likely have a transformative impact on sectors as diverse as healthcare, logistics, education and sports,” CityWire said.
– A US judge has rejected a request by Ben & Jerry’s to stop a deal from its parent company Unilever that allows its ice cream to continue to be sold in Israeli settlements in the occupied West Bank, the official said. BBC. In June, Unilever reversed a decision by Ben & Jerry’s to halt such sales and instead agreed to transfer its Israeli operations to the local licensee. The ice cream maker’s board argued its social mission could be compromised, but the judge said the company had failed to show it would suffer irreparable harm.
– The Wall Street Journal (paywall) reported the news that the SEC has voted to require companies to disclose how well executive compensation has matched the company’s performance over several years in what it describes as “the culmination of a long-delayed effort” by the regulator.
The new rule implements a provision required by the Dodd-Frank Act of 2010 to discourage financial fraud and better align executive compensation with business results. The SEC originally proposed the rule in 2015 under former chairman Mary Jo White. This week, commissioners voted 3-2 in favor, with Republican Commissioner Mark Uyeda saying the SEC had failed to update outdated data and economic analysis and fellow Republican Commissioner Hester Peirce saying the rule was unnecessarily complicated and would be costly for businesses to implement.
Under the rule, U.S. public companies must provide a new table in their annual proxy filings that contains executive compensation and financial performance measures covering a period of up to five years.
– Chief executives of the UK’s 100 largest companies have seen their salaries rise by 39% to an average of £3.4million, reported The Guardian, citing research by the High Pay Center think tank and the Trades Union Congress. The median average salary for CEOs at companies on the FTSE 100 index rose to £3.4m in 2021, from £2.5m in 2020 at the height of the coronavirus pandemic, when many bosses took a voluntary pay cut as they placed millions of employees on furlough. CEO pay also topped the £3.25m median recorded in 2019, before the pandemic.
The increase in executive pay means the average UK CEO now receives 109 times that paid to the average UK worker, up from 79 times in 2020.
– Business Intern reported that companies such as Coinbase and Robinhood “are relying heavily on issuing more stock to attract new employees now that a plummeting stock market has driven down the value of those stocks.” He added, however, that JPMorgan analysts said the practice could negatively impact existing shareholders. To keep pace with employee compensation packages and to match precedent, companies will issue additional shares, the publication explained, although it also noted that the practice “significantly dilutes value for existing shareholders once shares are vested” – something that will continue for a certain number. years, according to a report by two JPMorgan analysts.
– In other Coinbase news, the company that last year became the first cryptocurrency exchange to go public in the United States is facing a series of lawsuits from disgruntled investors, reports CoinDesk. The latest alleges the crypto exchange failed to protect user accounts from theft and hacking, and seeks damages of over $5 million. This is in addition to another aspiring class action lawsuit filed in New Jersey alleging the company allowed U.S. persons to trade in unregistered securities, the publication said, adding that earlier this month a Coinbase shareholder accused the company of misleading investors about its IPO. The platform is also trying to settle two separate lawsuits filed by investors through arbitration.
– The Guardian reported calls for a windfall tax after companies at the center of the global grain trade saw a record windfall amid soaring food prices around the world, raising concerns over profit and to speculation in global food markets that could put basic commodities out of reach of the poorest. The world’s four largest grain traders, which have dominated the global grain market for decades, have posted record or near-record profits or sales. They predict that demand will exceed supply until at least 2024, which should lead to even higher sales and profits over the next two years.
The newspaper quotes Olivier De Schutter, co-chair of the International Panel of Experts on Sustainable Food Systems and UN Special Rapporteur on extreme poverty and human rights, who said: “The fact that the global giants of raw materials making record profits at a time of rising hunger is clearly unfair and a terrible indictment of our food systems. Worse still, these companies could have done more to prevent the hunger crisis in the first place.
– Reuters (paywall) reported that investors ‘snatched’ $7.8 billion net from hedge funds in the second quarter of the year, citing industry data released this week as volatile markets pushed many to look for safer places to keep their money. Big investors like pension funds, asset managers and family offices took more money out of hedge funds than they added, the news agency said citing company figures. Citco administrative data, ending an 18-month trend to invest more.
– “The Nasdaq’s growing ESG business is under threat,” said the FT – Nasdaq. The company is ‘fighting a battle’ to water down the SEC’s climate change disclosure proposal, the document said, which would require companies to reveal their direct greenhouse gas emissions and have them verified by a third party . If passed, the proposal would no doubt increase subscriptions to the Nasdaq Metrio and OneReport platforms, both of which aim to help companies measure and disclose ESG data, but the exchange is concerned that the rules could harm its core business of listing and has joined dozens of other firms in ‘detonating proposals’.
The Nasdaq reportedly said the climate proposal “could deter many companies from going public” due to higher compliance costs and increased risk of facing litigation from investors.
– In other ESG news, the FT also reported that Federated Hermes, which it describes as “a champion of environmentally friendly investment strategies”, is coming under increasing pressure to explain its sponsorship of the State Financial Officers Foundation – a Republican coalition of senior US officials who opposes action on climate change.
Federated Hermes said in a statement that the relationship “does not serve as an endorsement of any particular organization’s perspective on an issue.”
“Diversity of thought and respect for others’ points of view, however different they may be from our own, are essential to building long-term consensus and improving our world,” the author wrote. general manager Christopher Donahue.
– The WSJ reported that the United States and China were close to reaching an agreement that would allow American accounting regulators to travel to Hong Kong to inspect the audit records of Chinese companies listed in New York, citing people familiar with the case. The issue has been a “years-long stalemate”, the newspaper said, but securities regulators in Beijing are said to be arranging for Chinese companies listed in the United States and their accounting firms to transfer their filings. audit work and other data from Mainland China to Hong Kong.