Tesco | 2015

For the third year, on 26 June 2015 and by way of e-platform, Etica Sgr voted at the general shareholders’ meeting of Tesco, a British company that operates in the sector of mass retail, with particular specialisation in food products, clothing and electronics, present in the Investible Universe and in the shareholder part of the funds of the Responsible Values System as one of the best performers of its sector.

Etica Sgr voted against the approval of Tesco’s financial statements, as, in light of the accounting inaccuracies found in Tesco’s financial statements of recent tax years, Etica does not believe that it is possible to be certain of the truthfulness of the information presented.

As regards points 2 and 3 on the agenda, relating to the Remuneration Policy of the Company, Etica Sgr opted to abstain. Despite, in fact, some positive elements being found in the Policy proposed by Tesco, such as the transparency of the same, the presence of maximum limits for the variable components and a three-year vesting period for the assigned financial instruments, it was considered that the ESG targets previously present in the remuneration plan (such as the reduction of CO2 emissions) had been removed and that rather high “buy-out awards” had also been paid to the new directors without precise justification of those amounts. It was also considered that there was a lack of reference to the average market remuneration and a lack of indication of the ratio between the salary of the CEO and that of the average of the employees. Etica Sgr assessed positively, on the other hand, the strengthening of the clawback clauses present in the contracts with the executive directors.

Etica Sgr then expressed a favourable vote to the election of all the proposed directors, positively assessing the curricula of the same, the percentage of independent directors and the composition of the board committees. Only one woman sits on the Board of Directors and the lack of gender diversity will be reported to the Company; however, account was taken of the fact that there is no recommendation in that regard by the British self-regulation code (UK Corporate Governance Code).

Etica voted in favour of the appointment of Deloitte as statutory auditor, positively assessing a change of auditor as a result of accounting inaccuracies identified in the last financial year.

On the remaining items on the agenda Etica Sgr expressed a favourable vote, excluding the proposal to make donations to political parties (item 17), on which it voted against, in line with its Guidelines.

Engagement Foreign companies
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