Ethos will not re-elect the chairman of the nomination committee if there is insufficient renewal of the board of directors. In the 2013 edition of the “Proxy voting guidelines and corporate governance principles”, Ethos adopts more stringent requirements with regard to board renewal, executive remuneration structure and capital issuances without pre-emptive rights.
The new edition specifies that when the board's renewal is considered insufficient, Ethos will recommend to oppose the re-election of the chairman of the nomination committee. In case of persistent under performance of the company, the re-election of the chairman of the board or of the nomination committee may be refused. In fact, these two individuals bear particular responsibility in terms of board composition.
Regarding the executive remuneration, the remuneration of the CEO will be assessed separately as of this year. The variable part of the CEO remuneration should not exceed 3 times the fixed part, while the variable remuneration of the other members of executive management should not exceed twice their fixed remuneration. Ethos will pay particular attention to the structure of the variable remuneration, a large part of which should be linked to long term value creation.
Institutional investors have become increasingly reluctant to authorise the issuance of substantial amounts of capital without a specific objective and without pre-emptive rights. These authorities are considered blank cheques given to management that can dilute their rights. Ethos recommends to set a limit at 25% of issued capital (down from 33% currently) for all the authorities to issue capital for general financing needs without pre-emptive rights. A 20% limit per request remains however valid.
