Business practices and voting information
As part of our commitment to delivering superior investment performance to our clients, we expect and encourage the companies in which we invest to demonstrate the highest standards of corporate governance and best business practice.
We examine the share structure and voting structure of the companies in which we invest, as well as the board balance, oversight functions and remuneration policy. These analyses then form the basis of our proxy voting and engagement activity.
J.P. Morgan Asset Management Voting Policy and Corporate Guidelines
Proxy Voting: UK and Europe Q4 2019
JPMAM manages the voting rights of the shares entrusted to it as it would manage any other asset. It is the policy of JPMAM to vote in a prudent and diligent manner, based exclusively on our reasonable judgement of what will best serve the financial interests of our clients. So far as is practicable, we will vote at all of the meetings called by companies in which we are invested.
Summary of key voting statistics
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Meetings voted (UK):
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43
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(97.3%)
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Meetings voted (EUR):
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47
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(91.4%)*
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Votes with management:
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1,764
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(94.8%)
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Votes against management:
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91
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(4.9%)
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Abstentions:
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6
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(0.3%)
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*a further 3 meetings were not voted due to share blocking and/or conflicts of interest (voting in relation to JPM Funds)
The fourth quarter is traditionally one of the quietest of the year in terms of proxy voting volumes, with relatively little AGM activity in the UK and Europe after the peaks in the second quarter.
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35% of shareholders (including J.P. Morgan Asset Management) voted against the binding remuneration policy at Bovis Homes, due to concerns over award levels. Under the new framework, put in place following the acquisition of Galliford Try's Linden Homes and Partnerships & Regeneration businesses, payouts under both the annual bonus plan and the long-term incentive plan were due to be increased significantly, leading to large upticks in total remuneration opportunity for both executives. We also had concerns over the significant levels of discretion given to the Remuneration Committee to increase awards beyond agreed levels if the Committee "considers that it is appropriate“ (although, historically, the RemCo has always acted responsibly in our view). The company has committed to engage with shareholders on the issue in the New Year.
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J.P. Morgan Asset Management also opposed the re-election of director Chris Bell at Rank Group, due to over-boarding. In addition to his role as Senior Independent Director at Rank, Bell chairs four other listed companies (Team17 Group plc, XLMedia plc, OnTheMarket plc and TechFinancials Inc), raising concerns over his time commitments.
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In Europe, J.P. Morgan Asset Management voted against remuneration at Euronext in the Netherlands. The company proposed increasing the total package of CEO Stéphane Boujnah by 34% percent, when current remuneration is already at the median of its peers, and without providing a compelling rationale for shareholders. Because of the way the company’s LTI is structured, the changes could also allow for increased payouts for below median or below target performance. Furthermore, the company did not publish its peer group until pressed by shareholders at the last minute, which is not in line with Dutch market practice.
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Year-to-date, J.P. Morgan Asset Management has engaged with 168 companies in the UK and Europe on ESG issues (not counting scheduled one-to-one meetings). Of these, 55 were in-person meetings to discuss corporate governance issues at portfolio companies, 44 were consultations over remuneration arrangements, and 45 were in relation to social or environmental issues.
