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Exercising Voting rights at Pictet Asset Management

July 2021

Proxy voting

Leveraging our power as investors to achieve positive change, we systematically exercise our voting rights in the best interests of our clients.

Exercising voting rights and responsibilities

The overarching purpose of our voting is to protect and promote the rights and long-term interests of our clients as shareholders. We consider it our responsibility to engage with and challenge companies’ management to ensure that the issuers we invest in on our clients’ behalf are well-run, adhere to their strategy and deliver shareholder value. We aim to support a strong culture of corporate governance, effective management of environmental and social issues and comprehensive reporting according to credible standards.

Voting scope

Equity

For our equity funds, the following principles are used to define the scope of accounts and securities eligible for proxy voting for:

  • 1. For actively managed funds, we aim to vote on 100 per cent of equity holdings.
  • 2. For passive strategies, we aim to vote on companies representing 80 per cent by weight of underlying benchmarks. This target may be revised upwards or downwards for specific strategies depending on factors such as portfolio size, geography or market capitalisation.
  • 3. For segregated accounts, including mandates and third-party (i.e. sub-advisory) mutual funds managed by Pictet Asset Management, clients who delegate the exercise of voting rights to us have the choice between Pictet Asset Management’s policy or their own voting policy. 

Multi asset

For our multi asset funds, voting takes place on the underlying equity funds that are managed by Pictet Asset Management and we also aim to vote where we have direct holdings in companies.

Voting guidelines

Our proxy voting guidelines are based on generally accepted standards of best practice in corporate governance, including board compensation, executive remuneration, risk management, shareholder rights. Because the long-term interests of shareholders are the paramount objective, we do not always support the management of companies and may vote against management from time to time. We also reserve the right to deviate from our voting policy to take into account company-specific circumstances.

To assist in exercising proxy votes, we use the services of third-party advisors, whose expertise and international experience allows us to vote at all relevant company meetings worldwide. 

Please refer to the Appendix D (good corporate governance practices) in our Responsible Investment policy for more information:

 Pdf Responsible Investment policy          

Family/majority-owned firms

For family/majority-owned companies (i.e. controls more than 30 per cent of the economic or voting rights), we apply a lower threshold for board independence to reflect the realities of their ownership structure. While typically we would require that a majority of board members be independent from management or reference shareholders, for family-controlled businesses we require that only 33 per cent are independent (unless the requirement of the country where the company is listed is lower).

Japan

For Japanese companies with no female board members, we pledge to vote “abstain” on male candidates to boards with no female directors. We believe that board diversity can lead to improved corporate governance and strategic oversight. It can also lead to greater innovation, better risk management and stronger connections with customers, employees and business partners. 

The overarching purpose of our voting is to protect and promote the rights and long-term interests of our clients as shareholders.

Eric Borremans
Eric Borremans Head of Environmental Social & Governance

Research and execution

To assist us in performing our proxy voting responsibilities, Pictet Asset Management uses the services of third-party specialists to provide research and to facilitate the execution of voting decisions at all relevant company meetings worldwide. Third-party specialists are tasked with collecting meeting notices for all holdings and researching the implications of every resolution according to Voting Guidelines defined by Pictet Asset Management. All recommendations are communicated to relevant investment teams and the ESG team.

Pictet Asset Management always reserves the right to deviate from third-party voting recommendations on a case by case basis in order to act in the best interests of our clients. Such divergences may be initiated by investment teams or by the ESG team and must be supported by written rationale.

Voting activity

The following charts provide an overview of Pictet Asset Management’s 2020 voting activity. These are aggregated data compiled during the year.

1. 2020 aggregated votes

Meeting overview

In 2020, Pictet Asset Management voted at 5'510 general assembly meetings out of 5'809 votable meetings for active and passive equities. We voted "against" (including "abstained" or "withhold") to at least one resolution at 2'227 meetings and we did not vote at 299 meetings.

Fig. 1 - 2020 voting activity
ESG_meetings.jpg

Source: Pictet Asset Management, ISS – December 2020

Management resolutions

Out of 60'213 management resolutions we voted against management on 5'601 items (9%), supported management on 54'052 items (90%) and voted "abstain" on 560 items (1%).

We voted against management on resolutions that relate primarily to director nominations or supervisory board matters (40%), non-salary compensation (20%), capitalisation including authorisations for stock issuances, stock splits, and conversions of securities (15%),  routine issues such as approval of reports, name changes, and technical bylaws among many others (14%) and reorganisations and mergers (10%)

Fig. 2 - Breakdown of management resolutions not supported
breakdown-of-management-resolutions.jpg

Source: Pictet Asset Management, ISS, December 2020

Shareholder resolutions

We voted against 425 shareholder resolutions out of 1'945 proposals (22%).

The main categories of shareholder resolutions that we didn't support are directors- related (34%), routine business such as requests for an independent board chairman (15%), other resolutions (15%), and health or environmental resolutions (13%).

Fig. 3 - Breakdown of shareholder resolutions not supported
breakdown-of-shareholders-resolutions.jpg

Source: Pictet Asset Management, ISS – December 2020

We supported 1'504 shareholder resolutions out of 1'945 proposals (77%).

The main categories of shareholder resolutions that we supported are directors- related (70%) and routine business such as requests for an independent board chairman (14%).

Fig. 4 - Breakdown of shareholder resolutions supported
breakdown-of-supported-resolutions.jpg

Source: Pictet Asset Management, ISS – December 2020

Deviations from voting guidelines

In 2020 we deviated from third-party recommendations on 176 resolutions. The main categories we deviated were related to director nominations (96 resolutions), routine resolutions such as election of remuneration committee member(s) or auditor ratification (33 resolutions) and non-salary compensation including shareholder approvals of compensation related matters (20 resolutions).

Fig. 5 - Breakdown of deviations from Pictet Asset Management's voting policy
breakdown-of-deviations.jpg

Source: Pictet Asset Management, ISS – December 2020

2. Voting records

Both our annual and monthly voting records can be viewed here:

 Pdf   Summary 2020  Pdf  January 2021     Pdf   February 2021
 Pdf   March 2021  Pdf  April 2021    Pdf  May 2021
 Pdf   June 2021  Pdf July 2021     Pdf  August 2021

 

 

Discover our other active ownership activities