Investor Relations Week: BlackRock Pulls E&S Support, Reporting Losses From Russia’s War In Ukraine, Tesla Volatility Boosts Creation Of First Single-Stock Hedge ETF
– According Reuters (paywall), BlackRock reported a sharp drop in its support for environmental and social-related shareholder proposals, saying many were too prescriptive, while its support for directors and executive compensation remained stable. BlackRock had warned in May that it would support fewer shareholder proposals because many were too burdensome – for example, urging banks to stop funding energy companies.
The company also cited SEC guidelines that resulted in the agency blocking fewer shareholder resolutions and presenting 245 resolutions to investors, up 133% on the year. In the 12 months to the end of June, BlackRock said in a report that it supported 71 of 321 environmental or social shareholder resolutions filed globally, excluding Japan, or 22% of the total. The previous year, BlackRock had supported 81 of the 172 environmental or social shareholder resolutions filed, or 47%.
– The SEC continues to ask companies how they disclose the financial impact of Russia’s war on Ukraine and has asked many to make changes for future filings, The Wall Street Journal (paywall) reported. The SEC released a list in May detailing the information it seeks from companies to ensure investors can properly assess risk. Over the past few weeks, he has sent out additional queries and, in some cases, follow-ups. Companies will likely disclose additional information as they cease operations in Russia, which could result in significant impairment charges. The SEC, between March 9 and July 22, sent at least 39 letters to 16 companies asking about the impact of the war, according to research firm Audit Analytics. He also surveyed nine funds, including ETFs and mutual funds.
– Just weeks after the first leveraged single-stock ETFs listed in the United States, investors are being offered the polar opposite in a Tesla-based product that hedges steep drops in its price, the report reported. FinancialTimes (pay wall). The world’s first “risk-managed” single-stock ETF, from Illinois-based Innovator Capital Management, is designed to protect investors from large losses in exchange for a cap on upside potential. The Innovator Hedged TSLA Strategy ETF will limit potential losses to 10% per quarter, with the initial contract cap (until the end of September) set at 9.29%.
“While there is no doubt that Teslas are surprisingly stylish and smooth-riding vehicles, the highly volatile stock run leaves a lot to be desired,” said Bruce Bond, co-founder and chief executive of Innovator. “Yet the potential for innovation that Elon Musk’s company represents is hard to ignore. For investors with a low tolerance for risk who still want exposure, we are excited to bring this investment strategy to market.
– In other Musk and Tesla related news, CNBC reported that Tesla revealed it received a second subpoena from the SEC regarding CEO Elon Musk’s 2018 tweets about taking the company private. Tesla said in a filing that it received the subpoena on June 13. The agency originally sued the company in November over a settlement that required Musk’s tweets about material information to be verified. The company said Monday it would cooperate with government authorities. The SEC declined to comment.
CNBC also reported that Twitter would hold a shareholders meeting to vote on Musk’s $44 billion acquisition of the company on September 13. Twitter’s board has previously urged its shareholders to approve the sale of the company to Musk.
– CEO succession events increase the number of independent board members, said Cooley PubCo. Independent board chairs may no longer be absolutely strictly from a corporate governance perspective, the blog reported, adding that “even ISS has a somewhat nuanced view on the subject, but the percentage of independent board chairs has increased. So why is this? According to a recent conference board report, it is not, as one might expect, because of shareholder proposals asking for a separation of these roles to strengthen the independence of the board of directors. Rather, “it is likely driven by CEO succession events, as well as the increasing workload of boards and management.”
– Reuters said that, according to a new report, a quarter of companies operating at Lloyd’s of London have met the commercial insurance market’s target for 35% of leaders to be women, although progress on diversity has been “incremental”. Lloyd’s has tried to improve diversity in the market, which employs around 45,000 people in insurance and brokerage firms based in the City of London’s financial district.
Lloyd’s published its first culture report in 2020 and set itself targets for improvement. Eighteen companies, or 26% of those surveyed, met or exceeded the target of 35% of boards, executive committees and direct reports from those committees having to be women, Lloyd’s said. He added that women hold 30% of leadership positions. The 35% target should be reached by the end of 2023.
– Singapore Exchange (SGX) has announced a collaboration with the NYSE that will include efforts to develop new ETFs, as well as ESG products, said the FT. The two exchanges signed a memorandum of understanding last week that outlines the focus areas of the partnership, which will include dual listing of companies on both exchanges and support index product development at SGX affiliate ICE Data Indices. and NYSE. The deal aims to “meet the growing complex needs” of market participants and investors, according to Loh Boon Chye, managing director of SGX Group.
– Bloomberg (paywall) reported that Credit Suisse had replaced its ‘beleaguered’ CEO, saying it would embark on a new turnaround plan – just nine months after the last one, with the Swiss bank saying it aimed to ‘reduce the size of its investment bank in the face of mounting losses.” The firm has brought in Ulrich Körner, head of asset management, as CEO from next week, replacing Thomas Gottstein, is stepping down after a two-year tenure “marked by scandal and huge losses. The company, which posted a bigger-than-expected loss of CHF 1.59 ($1.65 billion) in the second quarter, said that the review will include a reduction of at least 1 billion francs in additional costs and the evaluation of its securitized products trading unit.
– Europe’s biggest oil companies Shell and TotalEnergies extended their share buybacks this week, reported Reuters, after their second-quarter profits beat an already record-breaking previous quarter on the back of soaring prices for crude, gas and petroleum products. Together, the two companies are repurchasing $8 billion worth of stock in the third quarter after posting their highest respective quarterly profits while keeping their dividends stable, which could disappoint some investors. Benchmark Brent crude oil futures are up more than 140% over the past 12 months, averaging around $114 a barrel in the quarter.
– The FT reported that Jack Ma planned to cede control of Ant Group, a move that would further delay the Chinese fintech giant’s plans to launch an initial public offering. Ma’s retirement comes after Beijing derailed Ant’s blockbuster IPO nearly two years ago and demanded the group restructure its operations. The moment “also caused the billionaire entrepreneur to step back from public view, as Beijing moved to rein in the influence of its corporate titans and launched a broader crackdown on technology,” the official said. log. The “rectification” process overseen by China’s central bank has forced Ant to reorganize its business by selling stakes in top-performing units such as lending and credit rating to other groups, including state-owned companies, as well as to reduce some of its operations. as a proprietary money market fund that was once the largest in the world.