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Copyright Pictet
June 2019

Proxy voting

Voting rights are exercised systematically on all mutual funds managed by Pictet Asset Management's entities.

Proxy Voting Policy

Our voting policy is based on generally accepted standards of best practice in corporate governance including board compensation, executive remuneration, risk management, shareholder rights.

Long-term interests of shareholders are the paramount objective. We therefore do not always support the management of investee companies and may vote against management from time to time. To assist us in the exercising of proxy votes, Pictet Asset Management uses the services of third party specialists whose expertise and international experience allows us to vote at all relevant company meetings worldwide. Applicable voting guidelines can be found here:

International companies

US companies

In March 2019, we adapted our proxy voting guidelines for companies where the founder or a family is a major shareholder, i.e. controls more than 30% of the economic or voting rights. Such companies account for around 10% of our total holdings. For these companies, 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% are independent (unless the requirement of the country where the company is listed is lower).

The following principles are used in defining the scope of accounts and securities eligible for proxy voting:

  1. For actively managed funds, we aim to vote on 100% of equity holdings.
  2. For passive strategies, we aim to vote on 100% of equity holdings for Swiss index strategies, and on 80% of AUM for other index strategies. Holdings within the 80% threshold are defined once a year although this can be updated more frequently in case of material deviations. For liquidity reasons, voting rights are not exercised in share blocking markets. 
  3. For segregated accounts, including mandates and third-party (ie 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. 

For portfolios delegated to third-party asset managers and external funds in which we invest on behalf of our client’s, we expect managers to exercise proxy voting per their own policy and report accordingly to relevant Pictet Asset Management entities.


Execution

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 teams1 or by the ESG team and must be supported by written rationale.

In instances when consensus cannot be reached between the Investments teams and ESG team, the decision is escalated to relevant CIOs and, if necessary, the Head of Investments.

Proxy Voting Statistics 2018

A summary of Pictet Asset Management’s proxy voting statistics is set out below.

In 2018 Pictet Asset Management voted at 3’136 general assembly meetings. We voted “Against” (“abstained” or “withhold”) to at least one resolution at 1’480 meetings and we were unable to vote at 267 meetings for technical reasons.

Breakdown of votable meetings 
breakdown votable meetings

Source: ISS; Pictet Asset Management – December 2018


Out of 36'447 resolutions we voted against management on 3’469 items (9%) and supported management on 33’011 (91%) items.

Breakdown of votable items 
breakdown votable items

Source: ISS; Pictet Asset Management – December 2018

We voted against management on resolutions that relate primarily to director nominations (44%), executive remuneration (24%), routine issues such as approval of accounts and auditors (15%), and other resolutions such as approval of equity issuance (13%).

 Breakdown of votes against management by proposal type (excluding shareholder resolutions)
breakdown votes against management

Source: ISS; Pictet Asset Management – December 2018

We supported 571 shareholder resolutions, ie 62% out of 916 proposals.

Breakdown shareholder resolutions
breakdown shareholder resolutions

Source: ISS; Pictet Asset Management – December 2018

The main categories of shareholder resolutions that we supported relate to director nominations (52%), routine business such as requests for an independent board chairman (12%), and other resolutions related to corporate governance (11%).

Categories of shareholder resolutions that we supported
categories shareholder resolutions

Source: ISS; Pictet Asset Management – December 2018

In 2018, we deviated from third-party recommendations on 133 resolutions. The main categories we deviated were related to director nominations,  compensation of executives and other routine resolutions such as election of remuneration committee member(s) or auditor ratification.
Breakdown of deviations from voting guidelines
breakdown deviations voting guidelines

Source: ISS; Pictet Asset Management – December 2018