Every year, the Ethos Foundation publishes an updated version of its proxy voting guidelines encompassing the latest developments in corporate governance. Ethos' general meeting analyses are based on these guidelines. Voting recommendations are posted on the Foundation's website two days before general meetings.
Compared to the previous edition, the most important changes affect chapter 4 dedicated to remunerations. The amendments to this chapter take into account the rapid evolution of international best practice in the area. Indeed, in light of excessive remunerations awarded to senior executives by certain companies, several countries have changed their legislation to increase shareholder control over remuneration policies.
In this context, the chapter on remuneration addresses the objectives and the components of the remuneration policy, the disclosure expected by shareholders, as well as the rules setting the competencies in establishing the remuneration policy. With respect to this latter point, Ethos believes that Swiss companies' remuneration policy should be submitted for approval at shareholders' annual general meeting, as is already the case in the United Kingdom, the Netherlands, Australia and Sweden. When the remuneration is put to vote, the proxy voting guidelines recommend approval of the policy only if the information disclosed to shareholders is sufficient and all dispositions are in line with best practice. For example, it is essential that share-based awards be conditional upon achieving performance criteria, that the composition of the peer group be communicated and that severance payments do not exceed one year remuneration.
The new edition of Ethos' proxy voting guidelines is available free of charge in electronic format.
