Please note that collaborative engagements in response to ESG impacts which have already taken place are implemented in limited circumstances.
The Committee established a Tier 1 and Tier 2 voting structure to focus on the proxies of BNY Mellon complex-wide holdings with significant economic value or a large percentage ownership among the Member Firms (any BNY Mellon boutique that has adopted the BNY Mellon Proxy Voting Policy) that may be referred to the Committee if the voting guidelines so require. Tier 1 proposals pertain to the proxies of companies with market capitalizations of at least $10 billion or those companies in which the Member Firms' aggregate ownership represents at least 2% of the issuer's voting securities. Tier 2 proposals pertain to the proxies of all other issuers. By aggregating its voting strength across the BNY Mellon complex, the Committee generally seeks to engage Tier 1 issuers by requesting governance, leadership, efficiency/risk matters, environmental or social, and executive compensation practices that support increasing shareholder value.
Members of the Committee and/or the Team responsible for supporting the Committee's work seek to engage with Tier 1 issuers at least once per year, including meetings either prior to and/or after an issuer's annual meeting, to discuss, among other matters, proxy proposals, proxy voting results, executive compensation, shareholder resolutions and corporate governance.
The Committee completes a comprehensive review of the voting guidelines annually to refine its voting instructions to Institutional Shareholder Services ("ISS"), the vendor retained to provide services related to proxy voting (such as research, analysis, voting services, proxy vote tracking, recordkeeping and reporting). In 2018, the application of these guidelines resulted in many of the proxies of Tier 2 issuers being auto-voted by ISS. Further, this implementation has facilitated limited referrals of Tier 2 issuers to the Committee for voting consideration where the ownership level and economic interest are de minimus relative to Tier 1 firm holdings. The Committee seeks to focus on the referred proxy proposals of Tier 2 issuers that require an analysis of such matters as the election of corporate directors, executive compensation, corporate transactions and shareholder proposals. Environmental- and social-related shareholder proposals are referred to the Committee regardless of tier. In all cases, Mellon is responsible for voting the shares of its clients.