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AEGON Asset Management

PRI reporting framework 2020

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

(Proxy) voting and shareholder resolutions

LEA 12. Typical approach to (proxy) voting decisions

12.1. Indicate how you typically make your (proxy) voting decisions.

Approach

Based on

12.2. Provide an overview of how you ensure that your agreed-upon voting policy is adhered to, giving details of your approach when exceptions to the policy are made.

Our voting process is internally and externally audited. Also our proxy-voting provider issues an SSAE report and confirms to us whether there have been any issues on the voting agent service controls.

12.3. Additional information.[Optional]


LEA 13. Percentage of voting recommendations reviewed (Not Applicable)


LEA 14. Securities lending programme

14.1. Does your organisation have a securities lending programme?

14.3. Indicate how the issue of voting is addressed in your securities lending programme.

14.4. Additional information. [Optional]


LEA 15. Informing companies of the rationale of abstaining/voting against management

15.1. Indicate the proportion of votes participated in within the reporting year in which where you or the service providers acting on your behalf raised concerns with companies ahead of voting.

15.2. Indicate the reasons for raising your concerns with these companies ahead of voting.

15.3. Additional information. [Optional]


LEA 16. Informing companies of the rationale of abstaining/voting against management

16.1. Indicate the proportion of votes where you, and/or the service provider(s) acting on your behalf, communicated the rationale to companies for abstaining or voting against management recommendations. Indicate this as a percentage out of all eligible votes.

16.3. In cases where your organisation does communicate the rationale for abstaining or voting against management recommendations, indicate whether this rationale is made public.

16.4. Additional information. [Optional]


LEA 17. Percentage of (proxy) votes cast

17.1. For listed equities in which you 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%)

63 %

Specify the basis on which this percentage is calculated

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

17.3. Additional information. [Optional]


LEA 18. Proportion of ballot items that were for/against/abstentions

18.1. Indicate whether you track the voting instructions that you or your service provider on your behalf have issued.

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

Voting instructions
Breakdown as percentage of votes cast
For (supporting) management recommendations
90 %
Against (opposing) management recommendations
9 %
Abstentions
1 %
100%

18.3. In cases where your organisation voted against management recommendations, indicate the percentage of companies which you have engaged.

20

18.4. Additional information. [Optional]


LEA 19. Proportion of ballot items that were for/against/abstentions

19.1. Indicate whether your organisation has a formal escalation strategy following unsuccessful voting.

19.3. Additional information. [Optional]


LEA 20. Shareholder resolutions

20.1. Indicate whether your organisation, directly or through a service provider, filed or co-filed any ESG shareholder resolutions during the reporting year.

20.7. Additional information. [Optional]


LEA 21. Examples of (proxy) voting activities

21.1. Provide examples of the (proxy) voting activities that your organisation and/or service provider carried out during the reporting year.

ESG Topic
Climate Change
Conducted by
Objectives

Aegon voted in favor of a resolution from Follow This, which calls on Royal Dutch Shell Plc to set long-term (2050) and quantitative targets aligned with the goals of the Paris Climate Agreement. 

Scope and Process

The resolution acknowledges the challenges of a low carbon trajectory for the energy company, and is supportive of Shell's leadership position, but at the same time encourages Shell to take leadership in the energy transition to a net-zero-emission energy system.

The resolution was defeated by 94.5% of votes cast at Shell’s annual general meeting (AGM) yesterday. Around 5.5% of votes cast supported the resolution, although one-and-a-half times as many votes were withheld.

Outcomes
ESG Topic
Climate Change|Sustainability reporting
Conducted by
Objectives

Australian mining company Rio Tinto Plc, faced a shareholder resolution to review and comprehensively report on its membership of industry associations such as the Minerals Council of Australia (MCA). The MCA’s pro-coal political lobbying has been distinctly at odds with the position of companies such as Rio, which publicly support measures to reduce carbon emissions in line with the Paris climate agreement. A detailed public clarification of the differing positions on climate and energy policy between Rio Tinto and the linked associations/bodies was expected.

Scope and Process

We voted for (and against management). It was the largest vote for a shareholder resolution related to climate change, without board support, in Australian corporate history. The resolution failed at the Rio Tinto’s AGM but attracted the support of 18.3 per cent of the company’s shareholders. Even though Rio Tinto retained its membership of the coal mining lobbying firm, it moved out of coal mining.

Outcomes
ESG Topic
Climate Change|Sustainability reporting
Conducted by
Objectives

Kinder Morgan, Inc.

We voted for (and against management):

  • Report on Methane Emissions Management
  • Report on Sustainability
  • Assess Portfolio Impacts of Policies to Meet 2 Degree Scenario

Methane, the primary component of natural gas, is a climate pollutant 84 times more powerful than carbon dioxide (CO2) over a 20-year period, and it is responsible for 25% of the global warming we are experiencing today. This is why we decided to set a special focus on methane reduction engagement. We are an active member of the PRI methane working group as well as a local Dutch investor initiative focussing on methane emissions. In our role as an active owner we are committed to not only get into dialogue with the emitting companies but also demonstrate our expectations by supporting respective climate related shareholder resolutions.

 

Scope and Process

The resolution filed at Kinder Morgan, Inc. requested that the company reports on policies, actions, and plans to measure, monitor, mitigate, disclose, and set quantitative targets for methane emissions reduction resulting from all operations, including storage and transportation.

Shareholders delivered historic majority votes at Kinder Morgan, with global investors helping pass key climate and sustainability resolutions.

Outcomes
ESG Topic
Executive Remuneration
Conducted by
Objectives

Premier Oil Plc - We have long held concerns that executive compensation at Premier Oil was too generous and only geared to the oil price (which is outside of the management team's control). We have consistently engaged with the company on this issue and voted against the remuneration report at multiple AGM's.

 

Scope and Process

We voted against the remuneration report at the 2019 AGM and abstained on the re-election of the chairman of the remuneration committee. Our specific concern was the award of non-performanced restricted shares during 2019, compounded by the overall levels of executive compensation. 

The 2019 AGM saw a 10.6% vote against the remuneration report (and an additional 2.8% abstain).

In Jan 2020, the company contacted shareholders to discuss remuneration concerns and has proposed removal of the restricted share awards and reduction in executive pension award levels.

Outcomes
ESG Topic
Diversity
Conducted by
Objectives

Prudential Plc - Gender diversity

In 2018, we contacted 69 UK-listed companies with the poorest gender representation on the board (Pru 17%) .

Scope and Process

The chairman of Prudential Plc was written to in August 2018 regarding diversity. Since we received no response, this was followed up with a further call in November and a further call to the senior non-exec director in February 2019. Because the company failed to respond on multiple occasions, we abstained on the re-election of the chairman at the 2019 AGM. We have subsequently met with the chairman to discuss our concerns regarding diversity.

Outcomes
ESG Topic
Executive Remuneration|Other governance
Conducted by
Objectives

Barclays Plc - Executive compensation

Executive compensation in light of the CEO being found guilty of misconduct by UK and US regulators.

Scope and Process

For the past 2 years we had been keeping an eye on the outcomes of the regulators investigations into whistleblowing at Barclays. Both UK and US authorities have found CEO, Jes Staley’s behaviour to be unacceptable and the company has been fined over $15m as a result. We therefore expected the Remuneration Committee to take action and reflect in the CEO's remuneration appropriately, given the size of the fines as well as the reputational damage caused.  

The Remuneration Committee used the malus provision to reduce Mr Staley's bonus that was awarded in 2016 by £500K, but they have not used malus against any of his outstanding LTIP awards. Furthermore, this year (2019), the company missed most of their financial targets under the bonus arrangement and yet the personal targets have paid out at nearly maximum.

In our opinion, the awards made in 2019 were not appropriately reflective of the misconduct and the Remuneration Committee should have used their discretion to reduce his payments under the annual bonus plan.

29% of shareholders voted against the remuneration report at the 2019 AGM.

Outcomes
ESG Topic
Executive Remuneration
Conducted by
Objectives

Aplifon Spa - Executive compensation

At certain companies, the difference between executive pension awards and the general workforce is a concern. Where we have identified this as an issue, we have voted against executive remuneration arrangements.

Scope and Process

Concerns with the level of executive pension contributions  were identified last year, at 45% salary they are very high in comparison to the rest of the market. In addition, the bonus has the ability for poor financial performance to be compensated by personal objectives which we do not believe to be appropriate. We therefore voted against the resolution to approve executive compennsation.

In addition, shareholder approval was sought for the grant of shares (representing 3.1% of the issued share capital) to the Chief Executive and key executives. Whilst the Company stated that vesting of awards would be dependent upon EBIT and Net Sales, no further detail had been provided – in particular, the company had not disclosed the weighting of each measure or the actual targets. We therefore had no way of ascertaining whether the targets were sufficiently challenging. In addition, details of individual participation had not been disclosed (the proposed remuneration policy also failed to disclose participation levels). In the absence of sufficient information we voted against the grant.

Outcomes

21.2. Additional information. [Optional]


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