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Wellington Management Company LLP

PRI reporting framework 2018

Export Public Responses

You are in Direct - Listed Equity Active Ownership » (Proxy) voting and shareholder resolutions » Outputs and outcomes

Outputs and outcomes

LEA 21. Percentage of (proxy) votes cast

21.1. For listed equities where you and/or your service provider have the mandate to issue (proxy) voting instructions, indicate the percentage of votes cast during the reporting year.

Votes cast (to the nearest 1%)

98 %

Specify the basis on which this percentage is calculated

21.2. Explain your reason(s) for not voting certain holdings

          In certain instances, Wellington Management may be unable to vote or may determine not to vote a proxy on behalf of one or more clients. For example, we may be unable to vote proxies when the underlying securities have been lent out pursuant to a client’s securities lending program. In general, Wellington Management does not know when securities have been lent out and are therefore unavailable to be voted. Efforts to recall loaned securities are not always effective, but, in some circumstances, Wellington Management may recommend that a client attempt to have its custodian recall the security to permit voting of related proxies. Another instance when we may refrain from voting is when the cost of voting outweighs the value of the vote. For example, we typically do not vote in share blocking markets, where countries impose trading restrictions or requirements regarding re-registration of securities held in omnibus accounts in order for shareholders to vote a proxy. The consequences of such requirements – including the potential impact on liquidity – are evaluated on a case by case basis when determining whether to vote such proxies.

21.3. Additional information. [Optional]

We may refrain from voting where the cost of voting outweighs the value of the vote. For example, we typically do not vote in share blocking markets, or on securities that are on loan. In share blocking markets shareholders are unable to trade their stock from the day they vote their proxies until the day after the shareholders meeting. Vote deadlines are typically 7-10 days prior to the meeting in such countries, implying that the stock is illiquid for a period of time. We therefore decline to vote in these countries unless the issue has such clear and quantifiable value that we are willing to sacrifice liquidity.

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

22.1. Indicate if you track the voting instructions that you and/or your service provider on your behalf have issued.

22.2. Of the voting instructions that you and/or third parties on your behalf issued, indicate the proportion of ballot items that were:

Voting instructions
Breakdown as percentage of votes cast
For (supporting) management recommendations
92 %
Against (opposing) management recommendations
7 %
1 %

22.3. Describe the actions you take in relation to voting against management recommendations.

          Votes for or against management are made in the context of our voting process, which is governed by the firm’s Global Proxy Policy and Procedures and Global Proxy Voting Guidelines. The policy is written to support the best economic interest of the client, in accordance with regulatory and fiduciary requirements.

The firm examines each proxy proposal and votes against issues that we believe would have a negative effect on shareholder rights or the current or future market value of the company’s securities. The analyst who covers the stock or the Portfolio Manager who owns the stock may be consulted for company specific recommendations, particularly when the policies do not address the issues to be voted.

Occasionally, in the course of voting on specific proxy issues, potential conflicts may arise between the interests of clients and Wellington Management. Because Wellington Management has a fiduciary obligation to resolve such potential conflicts solely in the long-term interest of clients, the firm has established policies and procedures designed to resolve potential conflicts of interest, and these procedures can be found in the firm’s Proxy Policies and Procedures.

Pursuant to the referenced Proxy Policies and Procedures, potential conflicts may be resolved by votes in accordance with our published Proxy Voting Guidelines document. Alternatively, where the published voting guideline is “case-by-case,” where no published guideline exists, or where the proposed voting position is contrary to a published guideline, two disinterested ombudsmen from the Investment Stewardship Committee are appointed to review the recommendations of the ESG Research Team, oversee any discussion or debate with respect to the proposed votes, attend any meetings with the company or other outside parties with an interest in the matter, and to certify that the voting process and ultimate votes were properly executed and documented.

22.4. Additional information. [Optional]

LEA 23. Shareholder resolutions

New selection options have been added to this indicator. Please review your prefilled responses carefully.

23.1. Indicate if your organisation directly or via a service provider filed or co-filed any ESG shareholder resolutions during the reporting year.

23.6. Describe whether your organisation reviews ESG shareholder resolutions filed by other investors.

Yes, we review the vast majority of shareholder proposals on a case-by-case basis. While Wellington Management does not rely on any external parties for recommendations or vote determinations, we do subscribe to the research products supplied by various proxy advisors and research providers, including ISS and Glass Lewis. 

Wellington's Proxy Voting Guidelines outline our approach to evaluating these resolutions, with shareholder proposals denoted with "SP" next to them. For example, our approach to shareholder proposals requesting the adoption of a clawback policy is as follows: We believe that companies should have the ability to recoup incentive compensation from members of management who received awards based on fraudulent activities or an accounting misstatement. Consequently, we may support shareholder proposals requesting that a company establish a clawback provision if the company’s existing policies do not cover these circumstances. 

23.7. Additional information. [Optional]

LEA 24. Examples of (proxy) voting activities (Private)