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Ontario Pension Board (OPB)

PRI reporting framework 2017

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You are in Indirect – Manager Selection, Appointment and Monitoring » Outputs and outcomes

Outputs and outcomes

SAM 11. Percentage of externally managed assets managed by PRI signatories

11.1. Indicate approximately what percentage (+/- 5%) of your externally managed assets are managed by PRI signatories.

75 %

11.2. Describe how you ensure that best RI practice is applied to managing your assets

11.3. Additional information. [Optional]


SAM 12. Examples of ESG issues in selection, appointment and monitoring processes

12.1. Provide examples of how ESG issues have been addressed in the manager selection, appointment and/or monitoring process for your organisation during the reporting year.

Topic or issue
          Monitoring engagement by external manager
        
Conducted by
Asset class
Scope and process

As part of regular discussions with management and the board, one of our investment managers engaged with one of their portfolio companies regarding two separate issues: compensation and shareholder voting standards.

Our manager was concerned that the firm's compensation committee could re-price or exchange underwater equity options as this could undermine the existing executive compensation policy and did not align management's and shareholders' interests. The manager communicated to the firm its concerns around this issue and the decision not to support the incentive plan put forward by the firm. This was followed by a face to face meeting, where the firm acknowledged the concern and offered to review their policy.

The firm also has a supermajority voting requirement (66.6%) to amend certain articles and bylaws. The firm received shareholder proposals requesting the removal of this supermajority at recent annual general meetings. The manager supported this resolution as simple majority voting is seen as best practice and it ensures better board accountability.

Outcomes

In the cases where our manager did not vote with management, they provided their rationale in a constructive and positive manner. 

The firm took on-board the manager’s compensation concerns and the contentious by-laws from the incentive plan were removed.

12.2. Additional information.


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