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Universities Superannuation Scheme - USS

PRI reporting framework 2018

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LEA 15. Voting policy & approach



15.1. 貴社において正式な議決権行使ポリシーを設定しているかどうかを明示してください。

15.2. 議決権行使ポリシーの対象範囲を記載してください。

15.3. 議決権行使ポリシーを添付するか記載されたURLを提示してください [任意]


15.4. Provide a brief overview of your organization’s approach to (proxy) voting.

USS is committed to voting its proxies in an informed manner. Votes are confirmed in house by the RI team in association with the portfolio manager. Where possible, the scheme will write to the company to outline our concerns ahead of the vote.  If this is not possible,  we send the letter as soon as possible after the vote is cast.  Further details regarding our approach can be found on our website at:

See answers to LEA 18.2 for a detailed descripted of how USS is integrating environmental and social considerations into its proxy voting process.

We carefully review and consider shareholder resolutions where they have been submitted.

It is unusual to see shareholder resolutions in our home market (the UK), as shareholders have good access to management and boards. However, USS remains open to this potential route for escalation and co-filed shareholder proposals in 2015, 2016 and 2017.

In 2017 we pre-declared our support for several shareholder proposals on the PRI pre declaration platform including;  Charles Schwab, Exxon,  Pioneer and Occidental.


LEA 16. Typical approach to (proxy) voting decisions

16.1. (委任状による)議決権行使を通常どのように決定しているかを明示して下さい。



16.2. Provide an overview of how you ensure your voting policy is adhered to, giving details of your approach when exceptions to the policy are made (if applicable).

The USS Voting Policy is shared with proxy voting providers and companies and published on the scheme's website. USS actively considers all voting decisions in-house prior to confirming the vote and receives recommendations and proxy research from multiple providers to gain greater insights into the issues under consideration. Portfolio manager views are sought on votes and engagement letter texts. Recommendations are often made by the service providers that are inconsistent with USS voting policy or perspective. On such occasions the RI team ignore the recommendation and vote in accordance with the in-house decision. Records regarding the analysis and decision are retained.

The RI team regularly liaise with proxy voting service providers to feedback on the metrics, data points and analysis undertaken to facilitate implementation of USS’s voting and engagement policy.

16.3. Additional information.[Optional]

Further details on voting

For more information on the scheme's approach to voting see:


Voting engagement letter

An example letter sent to a company to outline the rationale behind USS's vote at the AGM is provided below.

The letters are sent to the company's chairman, detailing the scheme's vote, departures from corporate governance best practice and USS's expectations from company's - as outlined in USS's UK Voting Policy and Global Stewardship Principles (both available on the web page above). Less detailed rationales and votes are also published on the USS website.


Example letter from May 2017

Dear Chair


Universities Superannuation Scheme is the principal occupational pension scheme for universities and other higher education institutions in the UK. The fund is one of the largest pension schemes in the UK, with total fund assets of approximately £57 billion.

The majority of assets are managed in-house by USS Investment Management, a wholly owned subsidiary of USS, authorised and regulated by the FCA.

USS takes seriously its fiduciary obligations to beneficial and institutional members. We aim to be engaged and responsible long-term shareholders of the companies in which we invest and to foster constructive dialogue. Our policies on corporate governance, voting and engagement are available at

As investors in XXX Inc we have voted at the company's Annual General Meeting on XXX 2017. After careful consideration of the issues and facts available to us at the time of voting, we are writing to explain where we did not support management's recommendations and/or highlight material environmental, social or governance (ESG) issues.

Resolution 1a To re-elect as a director, 1: Against

As noted previously, USS would welcome the appointment of an independent chairman to the board.

Resolution 1b To re-elect as a director 2: Against

We also have concerns regarding the extended tenures of directors 1-6, who have all served on the board for 13 years or longer. We would  welcome refreshment and succession planning to better ensure independent oversight.

Resolution 1c To re-elect as a director 3, : Against

Please see our comment under item 1b above.

Resolution 1e To re-elect as a director, 4: Abstain

We note the cross directorships between director 4 and 7. We have concerns regarding the potential for conflicts of interest to arise and challenges to independence. We would also welcome greater transparency regarding the nominations and appointments process to understand how the board ensures a diversity of skill sets represented on the board.

Resolution 1h To re-elect as a director, 5: Against

Please see our comment under item 1b above.

Resolution 1i To re-elect as a director, 6: Against

Please see our comment under item 1b above.

Resolution 1j To re-elect as a director, 7: Against

We have concerns regarding the director’s aggregate time commitments, given his executive role and additional directorships. We also note the cross directorships highlighted above.

Resolution 2 To ratify the appointment of Ernst & Young LLP as auditors: Against

USS encourages the audit committee consider undertaking a tender process to rotate the company's external auditor. We have concerns that the extended, 20 year relationship with Ernst & Young may negatively impact independence and professional scepticism. We would welcome auditor rotation, in line with international best practice.

Resolution 3 To approve an advisory vote on the remuneration of the Company's named executive

officers: Against

USS is concerned about the relationship between the company's payment practices and the creation of durable shareholder value. We would welcome the introduction of a long-term incentive plan that rewards executives for the achievement of corporate strategy and clawback provisions under all variable pay awards. We are also concerned about the large one-time RSU awards issued during the year which vest without reference to performance.

Resolution 4.03 To set the frequency at which the advisory vote on executive compensation shall

be held to triennially: Abstain

We consider an annual say-on-pay vote encourage better communication between shareholders and directors on compensation issues and strengthens the alignment between pay and performance.

Resolution 5 To adopt the 1997 Stock Incentive Plan: Against

We do not support long-term incentive schemes offered to non-employee directors and consultants and would welcome the introduction of performance conditions for all executive awards.

Resolution 7 To request that the board use sustainability as a compensation performance measure: Shareholder Proposal: For

As outlined above, we expect the inclusion of performance conditions for all variable pay awards. We would welcome the inclusion of sustainability key performance indicators as part of the company's performance measurement used in the determination of executive pay.

Resolution 8 To amend the vote counting practices: Shareholder Proposal: For

USS believes that abstentions should not be counted as votes "against" a proposal as we are concerned that reduced transparency regarding abstentions may misrepresent the results for shareholder proposals. USS would welcome a straightforward vote counting formula that aligns with shareholder expectations.

Whilst we acknowledge an improvement in the company's sustainability reporting, we would welcome greater disclosure around performance against key indicators such as health & safety and emissions. We would also welcome the publication of policy statements relating to the company’s position on material environmental & social issues.

We expect timely reporting of material environmental, social and governance (ESG) data from companies to demonstrate how ESG risks and opportunities are being managed within the business. We also request that this information is refreshed at least on an annual basis and made available to investors ahead of the AGM, so that it can be considered within our review of the proxy materials and integrated into our voting decisions.



LEA 17. Percentage of voting recommendations reviewed (Not Applicable)

LEA 18. Confirmation of votes



18.1. 議決権行使に係る証跡の改善や議決権行使の結果を確認するためのプロジェクトにどのように関与しているのかを記載して下さい。

          Shareholders use their votes at corporate events as an expression of their support or otherwise for management and business strategy, major transactions, capital raisings and share issuances, as well as governance related matters. It is important that the votes we cast are accurately and efficiently transmitted to issuers.  USS continue to work with our custodians and intermediaries in the voting chain, to ensure the system works as effectively as possible and identify areas for improvement.   For example, we encouraged JP Morgan to develop KPIs with their service provider (Broadridge) earlier this year to monitor vote execution performance.

18.2. 補足情報 [任意]

          In 2016 the scheme implemented a new process for integrating environmental and social issues into its voting decisions.  The scheme’s approach is focussed on company disclosure, with the following key E&S indicators identified: 

• Quality and Timeliness of reporting on corporate social responsibility (CSR) issues 
• Carbon Emissions 
• Fatalities 
• Ethical Business Practices: human rights, child labour and modern slavery
This approach is intended to proactively encourage better company disclosure on key E&S indicators ahead of the company AGM.  Without this information investors will not be able to take a holistic approach to assessing company performance.   Integrated reporting cannot be widely adopted without timely reporting of performance against material E&S KPI’S.  Furthermore E&S considerations cannot be integrated into remuneration frameworks to the satisfaction of investors without this disclosure.  

In addition to the original Australian and UK markets, the process was extended to three new markets over the course of 2017:  the US, Canada and Ireland.   In 2018,  we also intend to extend this process to our quantitative funds and companies in Japan, Singapore and Hong Kong.   We will take an automated approach using the service of external research providers. We are also voting companies from outside these markets that have high environmental / social footprints. 

We have analysed the adequacy of the environmental and social disclosure made by 135 companies in 2017 and have included comments (both positive and negative) in letters to 52 companies. In 2018 we expect to vote against the report and accounts of companies where we continue to identify material gaps in their disclosure on environmental and social factors.

LEA 19. Securities lending programme



19.1. 貴社では、セキュリティーズレンディングを設定していますか?

19.3. 貴社のセキュリティーズレンディングにおいて議決はどのように対処されるかを記載してください。

          USS has adopted an approach where we systematically recall some securities to vote on their ballot items for certain holdings; and we recall some securities to vote on their ballot items on an ad hoc basis for other holdings. However, we are unable to tick both boxes above.

Our policy is outlined below:

To ensure that the scheme is able to vote all its shares at important meetings or where USS is a significant shareholder, USS has worked with service providers to establish procedures to restrict lending for certain stocks and recall shares in advance of shareholder votes. 
- Where we hold 3% or more of the issued share capital of a company, stock is recalled systematically. 
- In other circumstances we monitor the meetings and proportion of stock on loan, and will restrict and/or recall lent stock on a case by case basis, e.g. in the event of a contentious vote or in relation to engagement activities, further to discussion with the portfolio manager. 

This is publicly disclosed within the Scheme's Stewardship Code Statement. See

LEA 20. Informing companies of the rationale of abstaining/voting against management



20.1. 貴社または貴社に代わって行動するサービスプロバイダーは、議決権の行使に先立って、当該企業に対し懸念等を表明しているかどうか明示してください。

          Engagement letters are sent ahead of the vote where possible. We send a letter explaining the rationale behind our votes to all our actively held companies, regardless of their size, index or country of incorporation. An example of the type of letter we send is provided in LEA 16.3. In Japan, we send the letters translated into Japanese.

20.2. 貴社や貴社に代わって行動するサービスプロバイダーは、議決を棄権したり、経営陣の提案に反対票を投じる場合に、当該企業にその理由を伝えているかどうかを明示してください。

20.3. Additional information. [Optional]

We have analysed the adequacy of the environmental and social disclosure made by 135 companies in 2017 and have included comments (both positive and negative) in letters to 52 companies.  These issues are also followed up in e-mails, calls and meetings.

During the course of the year 255 engagement letters (communicating our voting decision and rationale) were sent to 239 companies.  This was fewer than previous years owing to a greater concentration of the portfolio and consequential decrease in the number of equity holdings in developed markets over recent years.

As a long term shareholder, the voting letters that are sent to USS’s companies are generally a continuation of the engagement from previous years reflecting house views, vote history and engagement meetings.

We meet companies throughout the year and raise concerns about corporate governance issues during these meetings, this often naturally leads to a discussion regarding our voting decision.


LEA 21. Percentage of (proxy) votes cast

21.1. 貴社やサービスプロバイダーが(代理)投票の指示を発行するマンデートを有している上場株式について、報告年度中に行った投票の割合を記載してください。


98 %


21.2. 一定の株式保有分について議決権を行使しない理由を説明して下さい:

          USS does not vote holdings sold between the record date and the date of the shareholder meeting (i.e. we avoid empty voting).

21.3. Additional information. [Optional]

LEA 22. Proportion of ballot items that were for/against/abstentions

22.1. あなたの貴社では、貴社や貴社に代わって行動するサービスプロバイダーが出した議決権行使に係る指示を追跡しているかどうか明示してください。

22.2. 貴社または貴社の代理である第3者機関が出した議決権行使に係る指示について投票の割合を記載してください。

67 %
24 %
9 %

22.3. 経営陣の提案に反対票を投じた後にあなたの貴社が取る措置について記載して下さい。

          Please see our response under LEA 15.4 and 20.3

22.4. Additional information. [Optional]

In the twelve months ending December 2017, USS voted on 6,909 resolutions at 545 events at 472 companies (2016: 7,580 resolutions at 623 events at 521 companies).  

USS supported:

  • 38% of remuneration resolutions (44% in 2016)
  • 61% of auditor appointments (69% in 2016)
  • 52% of sustainability focussed resolutions (59% in 2016)
  • 40% of shareholder resolutions (45% in 2016)

USS voted “against” management’s recommendation on at least one resolution at 425 (90%) of companies (87% 2016).  Dissenting votes and comments for the engagement letters are discussed in advance with the relevant portfolio manager(s).

A letter outlining changes to USS’s UK voting policy was also sent to over 50 UK portfolio companies ahead of the proxy season (see SG 06.1)

With regard to the guidance note on abstentions, we are unable to identify where an abstention vote should be counted as a vote against.

Engagement letters are sent to companies ahead of the meetings in most instances, and translated into Japanese for our Japanese holdings. The letters detail the rationale behind our voting decisions, encourage improvements, and provide introductory information on USS’s approach to stewardship. Over the year, 255 engagement letters were sent to 239 companies (347 letters to 339 companies in 2016).

LEA 23. Shareholder resolutions



23.1. 貴社が直接またはサービスプロバイダーを経由して報告年度にESG関連の株主決議を提出または共同提出したかどうかを明示してください。

23.2. 貴社が行ったまたは共同で行ったESG関連株主決議の数を記載してください。

1 合計

23.3. 以下の結果をもたらした、これらのESG関連株主決議の数の割合を記載してください。


0 %
Were withdrawn due to changes at the company and/or negotiations with the company
100 %
Were withdrawn for other reasons
0 %
Were rejected/not acknowledged by the company
0 %
合計 100%

23.4. 貴社が提出または共同提出したESGの株式決議で議案に採用された(撤回されなかった)ものに対する賛成票の割合を選択してください。


23.5. 貴社が提出または共同提出したESG関連の株主決議で、結果が達成されたものについて説明してください。

USS nominated its own candidate for supervisory board membership.  This resolution was ultimately withdrawn when the firm put forward their own candidate who was acceptable.

23.6. 貴社が他の投資家によって提出されたESG株主決議を審査するかどうかについて説明してください。

We give careful consideration to all shareholder resolutions including those related to environmental and social issues.  USS supported 40% of shareholder resolutions in 2017.

We pre-disclosed voting intentions for Charles Schwab, Exxon, Pioneer and Occidental.

23.7. Additional information. [Optional]

LEA 24. Examples of (proxy) voting activities


24.1. 報告年度に貴社またはサービスプロバイダーが実行した(委任状による)議決権行使の例を提供してください。

ESG Factors
          Risk of Human Rights Violations and Political Instability

Engagement call with IR and Sustainability team ahead of vote to establish our position on shareholder resolution requesting that the firm complete a Human rights risk report.  The shareholder resolution implied that the political situation in a country of their operations was deteriorating rapidly ahead of elections.


Call with IR and Sustainability team.


The company were able to give the RI team comfort that the situation was under control and no worse than previous years when elections took place.  The company has a long history of operating successfully in the country. 

ESG Factors
          Lobbying undertaken by industry body

To ensure that the company takes responsibility for lobbying undertaken on its behalf by industry bodies and has a mechanism in place to a) identify such lobbying, b) has a process in place to address such lobbying activity where it is inconsistent with the company's own position c) reviews the benefits associated with being a member of all industry bodies and d) reports this activity to shareholders. 


Supported shareholder resolution and participated in a collaborative engagement call with the firm.


The company has produced a report that complies with the requests made in the shareholder resolution.

ESG Factors
          ESG Disclosure

To encourage the firm to disclose material E&S data ahead of the company AGM so that this information can be integrated in voting decisions.  Such data is an essential component of integrated reporting.


Request for timely reporting included in voting engagement letter sent to Chairman.


Requirements have been communicated to the company.  If adequate reporting is not forthcoming we will consider voting against report and accounts in future years.

ESG Factors
          Board Composition

To encourage the firm to undertake a review of board composition.


Vote against election of directors.  Vote rationale communicated to Chairman via voting engagement letter.


This has escalated to a collaborative engagement with the firm.

ESG Factors

Removal of overboarded director.


Vote against director in question.   Vote rationale communicated to Chairman via voting engagement letter.


We are now engaging with the company on this issue.

ESG Factors
          Composition of Audit Committee

Increase independence of the audit committee.


Vote against non-independent  audit committee members


The company has agreed to move to an independent audit committee

ESG Factors
          Health & Safety

To send a clear message to the company that we welcome the improvements in their sustainability reporting and improvements in their health & safety performance.  It is hoped that positive feedback such as this will help strengthen the mandate of the company's sustainability team and help maintain the company's commitment to this important agenda.   Thus securing the adequate levels of investment in terms of both time and money. 


Comments included in the voting engagement letter to the Chairman.


It is hoped that health & safety performance will continue to improve in future years.

ESG Factors
          Bundled director elections

The objective of the engagements, was to persuade Swedish companies to permit shareholders the opportunity to vote individually on director elections.

USS considers all directors should be held separately to account and put to a shareholder vote at least once every three years. The scheme does not support bundled or slate elections - where shareholders are only offered one vote to appoint all the directors standing for election on a management or supervisory board. We will raise this with companies when we engage and typically vote against such proposals.

Slate elections have been a particular concern in Sweden, where they remain fairly common.


This was a collaborative engagement (however there is no option to select this in the 'Conducted By' tab above).

USS supported an initiative led by a Dutch asset manager which identified 11 Swedish companies who have persisted with bundled slate elections, continuing to deny shareholders a vote on individual director elections.

The initiative built upon a previous letter in August 2015, to which USS was also a signatory. A letter was also sent at that time to the Chairman of the Swedish Corporate Governance Board, calling upon the body to address investor concerns about bundled director elections.


Of the 40 companies written to in 2015, 17 companies had unbundled their director elections at their 2016 and 2017 AGMs - demonstrating the effectiveness of the engagement campaign.

We will monitor for the effectiveness of the 2017 letters in the 2018 proxy season.

24.2. Additional information. [Optional]

See answer to LEA 18.2 for an explanation as to how USS has integrated environmental and social decisions into voting.