Support of shareholder proposal on proxy access in AES Corporation
Voting intention 22 April 2015
Norges Bank Investment Management will vote in favour of the shareholder proposal on proxy access and vote against the management resolution on the same issue.
Date of Annual General Meeting: 23 April 2015
- Norges Bank Investment Management will vote in favor of the Shareholder Requisitioned Resolution #9 submitted for shareholder vote at the Annual General Meeting of The AES Corporation.
Shareholder requisitioned resolution reads:“Proxy Access”
- Norges Bank Investment Management will vote against the Management Requisitioned Resolution #7 submitted for shareholder vote at the Annual General Meeting of The AES Corporation.
Management requisitioned resolution reads: "Provide Proxy Access Right”
Shareholder requisitioned resolution
Shareholder supporting statement
We believe proxy access is a fundamental shareholder right that will make directors more accountable and contribute to increased shareholder value. The CFA Institute’s 2014 assessment of pertinent academic studies and the use of proxy access in other markets similarly concluded that proxy access:
Would “benefit both the markets and corporate boardrooms, with little cost or disruption.”
Has the potential to raise overall US market capitalization by up to $140.3 billion if adopted market-wide. (http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2014.n9.1)
The proposed bylaw terms enjoy strong investor support - votes for similar shareholder proposals averaged 55% from 2012 through September 2014 - and similar bylaws have been adopted by companies of various sizes across industries, including Chesapeake Energy, Hewlett-Packard, Western Union and Verizon.
Management requisitioned resolution
“Provide Proxy Access Right”
Norges Bank Investment Management Rationale for voting decisions
- We support proxy access rights at US listed companies when applied with reasonable thresholds that enable shareholders to utilise the rights effectively.
- We support the introduction of holding periods of up to three years and holding requirements of up to three percent and we will accept a limit on the number of board seats to be affected by proxy access candidates if at least two seats or 20 percent of the board can be filled by such candidates.
- We consider that proxy access provides shareholders with a reasonable right to propose board candidates, provides greater director and board accountability and can provide a safeguard when boards fail.
- We will support resolution 9 at The AES Corporation Annual General Meeting as the resolution seeks to introduce proxy access on reasonable terms.
- We will oppose the Management proposed resolution 7 as it seeks to introduce proxy access on terms less favorable to minority shareholders than the terms provided by resolution 9.
- We will also support the shareholder proposed resolution 8 and oppose the Management proposed resolution 6 as the shareholder proposal further strengthens shareholder rights and secures greater board accountably.
- We will vote in favor of all other Management proposals.
Supporting documentation: Proxy Access at US Companies Position Paper
Norges Bank Investment Management will support all reasonable shareholder or management proposals brought at US listed company Annual General Meetings that seek to introduce proxy access subject to holding periods of up to three years and holding requirements of up to three percent, and we will accept a limit on the number of board seats to be affected by proxy access candidates if at least two seats or 20 percent of the board can be filled by such candidates.
The AES Corporation resolutions
|NUMBER||PROPOSAL||Management recommendation||VOTing INTENTION|
|1.1||Elect Director Andres R. Gluski||For||For|
|1.1||Elect Director Charles O. Rossotti||For||For|
|1.2||Elect Director Charles L. Harrington||For||For|
|1.3||Elect Director Kristina M. Johnson||For||For|
|1.4||Elect Director Tarun Khanna||For||For|
|1.5||Elect Director Holly K. Koeppel||For||For|
|1.6||Elect Director Philip Lader||For||For|
|1.7||Elect Director James H. Miller||For||For|
|1.8||Elect Director John B. Morse, Jr.||For||For|
|1.9||Elect Director Moises Naim||For||For|
|2||Amend Omnibus Stock Plan||For||For|
|3||Amend Executive Incentive Bonus Plan||For||For|
|4||Ratify Ernst & Young LLP as Auditors||For||For|
|5||Advisory Vote to Ratify Named Executive Officers Compensation||For||For|
|6||Provide Right to Call Special Meeting||For||Against|
|7||Provide Proxy Access Right||For||Against|
|8||Provide Right to Call Special Meeting||Against||For|
Important legal notice
Norges Bank Investment Management’s approach to responsible investing includes disclosing our voting decisions, in some cases in advance of the relevant meeting. This is only intended to provide information and is not solicitation or encouragement as to how others should vote. This disclosure is not investment research, advice or recommendation. Norges Bank Investment Management’s voting intention is an internal decision and has not been agreed with other shareholders. This disclosure reflects Norges Bank Investment Management’s intention as at the date of publication but such intention is subject to change at our discretion. Norges Bank Investment Management is not subject to any prohibition on dealing after the publication of this disclosure. Norges Bank Investment Management’s holdings available for voting from time to time may differ from those set out in lists of holdings as of year-end.