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Norway Sovereign Fund Gets Tougher on Executive Compensation

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Norges Bank Investment Management (NBIM) disclosed it had close to 3,256 meetings with companies in 2018. NBIM had published its expectations on ocean sustainability (preventing marine pollution) and anti-corruption. NBIM has an interest in the blue economy – the economy of the oceans.

Norway Government Pension Fund Global is an investor in approximately 9,000 listed companies in 70 countries. The sovereign fund is spreading its risk, while trying to capture global growth in companies. The fund fights for shares having equal voting rights. The fund grew concerned that stock exchanges in Singapore and Hong Kong introduced a new dual share class structure, with one class carrying more votes than the other.

Tougher on Executive Compensation

NBIM voted on 9,718 resolutions on executive remuneration in 2018. NBIM voted against 7.2% of them, compared with 6.9% in 2017 and 2.8% in 2016.

In 2018, regarding some top equity holdings for the sovereign wealth fund, NBIM voted against the combined CEO and Chairman roles in Amazon.com Inc., Total SA, Johnson & Johnson, Bank of America Corporation, Verizon Communications Inc, Pfizer Inc, Exxon Mobil Corporation, JPMorgan Chase & Co., Intel Corporation, Merck & Co Inc., Chevron Corporation, AT&T Inc., and Procter & Gamble Co.

China’s Central Bank Creates Macro-Prudential Management Bureau

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The People’s Bank of China (PBOC) created a new department to oversee and attempt to eliminate financial risks to the system. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Like its U.S. Peers, Legg Mason Seeks to Trim Costs

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Legg Mason Inc., a Baltimore-based asset manager, has announced a reduction in workforce as is prepares to streamline operations and save money. Legg Mason’s leadership commented that assets under management fell 5 % year-on-year. Legg Mason currently manages US$ 727.2 billion (as of December 31, 2018), which is down from the previous US$ 767.2 billion. CEO Joseph A. Sullivan noted that a global operating platform will centralize fund administration, IT, and other departments that work with affiliates. Sullivan did not discuss the number of layoffs expected, or specify which areas would be impacted. Legg Mason disclosed they planned to close a quarter of its exchange-traded funds in March 2019. These three ETFs include a U.S. strategy, emerging markets, and a developed markets strategy outside the U.S. However, these funds run around US$ 28 million in assets under management.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Monetary Authority of Singapore Establishes Corporate Governance Advisory Committee

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On February 12, 2019, the Monetary Authority of Singapore (MAS) revealed the creation of a Corporate Governance Advisory Committee (CGAC). CGAC was formed to advocate for good corporate governance practices among listed companies in Singapore. Bobby Chin, Director of Singapore Telecommunications Limited, will be the Chair of CGAC. According to a MAS press release, “CGAC will identify current and potential risks to the quality of corporate governance in Singapore.”

MAS formed the Corporate Governance Council (Council) in February 2017. The Council was dissolved after it pushed out a publication of its final recommendations on August 6, 2018.

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