Mirova calls on companies to exercise caution and restraint on shareholder compensation

Published on 03/31/2020 News

The COVID-19 pandemic is the biggest shock to our societies in several decades. In addition to having a major impact on the health of millions of human beings, it profoundly destabilizes the way our economies function, raising fears of a social crisis of unprecedented proportions. Businesses are suffering this crisis through the cessation of activity, and tomorrow they will be at the forefront in responding to its consequences.

Mirova

In this context, as the season of Annual General Meetings begins, we believe it is important to play our role as a responsible investor, by encouraging the companies in which we are shareholders to take decisions that do not undermine their ability to withstand the health crisis. In particular, we will pay particular attention to the ways in which value is shared among the company's various stakeholders, especially in terms of job preservation, dividend payments and executive compensation.

Mirova's voting policy has always been based on the following guiding principle: focusing on long-term value creation for the benefit of all the company's stakeholders. To us, this approach seems more necessary than ever in this period. Faced with this crisis, we believe that companies must put in place the necessary means to preserve jobs and ensure the sustainability of their business.

We have therefore contacted the companies in which we are shareholders to encourage them to exercise caution and restraint on shareholder compensation.

In this period, where the outcome is still very uncertain, we believe that the payment of dividends should in no way undermine a company's stability, investment capacity or medium-term resilience. Consequently, we will only support resolutions relating to dividends on condition that the company provides sufficient evidence to demonstrate that such payments are compatible with the long-term sustainability of the company, explicitly taking into account the consequences of the Covid-19 epidemic.

Furthermore, our voting policy already insists, under normal circumstances, on the alignment of the interests of the various stakeholders. We will therefore be particularly vigilant on this year’s resolutions relating to executive compensation to ensure that this principle is respected.