– The Wall Street Journal (paywall) reported that Rite Aid Corp president and CEO Heyward Donigan left the company. Rite Aid has picked board member Elizabeth Burr to be interim CEO as it conducts a search for a new leader. Burr has previously been chief innovation officer at health insurance company Humana. Donigan was named Rite Aid CEO in 2019, leading the company through the Covid-19 pandemic that put pharmacy chains on the front lines of testing and vaccinations.
– According to Bloomberg (paywall), UK financial services firms have a higher proportion of women on their boards than their continental European counterparts. Women made up 58 percent of new board appointments at the UK’s listed financial service firms over the last year, compared with an average of 50 percent at European companies, according to a report released by EY. At present 43 percent of UK finance board seats are filled by women, a 5 percentage-point increase from June, when the research was first conducted. In continental Europe, female representation on financial boards stands at 42 percent.
‘Ensuring that boardrooms reflect the diverse customers and societies they serve remains a work in progress, but the substantial increase in female representation in the past six months alone is particularly encouraging,’ said Anna Anthony, EY’s UK financial services managing partner. ‘We expect to see boards ramp up their focus on age and cultural diversity over the coming months.’
– Reuters (paywall) reported that, according to a report, law firms face a difficult climate in 2023 amid falling demand, declining profits and rising expenses, with layoffs likely as clients save money and move work to lower-priced firms. Profits per equity partner at large and midsized law firms fell 4.2 percent over the 12 months ending in late November, according to a report issued by the Thomson Reuters Institute and the Center of Ethics and the Legal Profession at Georgetown Law. The report projects that last year’s financial results will show the first full-year decline in law-firm partner profits since 2009.
After growing 3.7 percent in 2021, demand for law firm services fell 0.1 percent by the end of November 2022, the report finds. The decline was largely due to decreasing transactional work and general uncertainty about the direction of the economy. Lawyer productivity hit a more than 20-year low, with attorneys at large and midsized firms billing an average 119 hours per month, down from 122 in 2021.
– The WSJ reported that logistics company CH Robinson Worldwide reached an agreement to work with its activist investors. The pact between CH Robinson and activists Ancora Advisors, known as a standstill agreement, renewed for 12 months a deal reached last year as the investment group placed two representatives on the company’s board and questioned the direction of the business.
CH Robinson’s standstill agreement with Ancora is similar to the first deal reached between the two sides in February 2022. It maintains two seats on the company’s board for Ancora representatives, Jay Winship and Henry Maier, in return for assurances that Ancora won’t disparage the company or launch a proxy fight. It also renews the possibility that the company might sell its global forwarding unit.
– The SEC announced that Cristina Martin Firvida will become director of the office of the investor advocate, effective January 17. Martin Firvida was most recently the vice president of financial security and livable communities for government affairs at AARP. As investor advocate, she will lead an office that helps retail investors in interactions with the commission and with self-regulatory organizations, analyzing the effect on investors of proposed rules and regulations, identifying problems investors have with financial service providers and investment products, and proposing legislative or regulatory changes to promote the interests of investors.
– The SEC also announced that Paul Munter has been appointed the agency’s chief accountant. He had been acting chief accountant since January 2021. As chief accountant, Munter will continue to advise the commission on accounting and auditing matters and will be responsible for helping the commission oversee FASB and the Public Company Accounting Oversight Board.
– CNBC reported that Federal Reserve chair Jerome Powell said the central bank will not get involved in issues such as climate change that are beyond its congressionally established mandate, and said the institution will not become a ‘climate policymaker’. His remarks follow calls from some Democrats in Congress for the Fed to play a more active role in addressing climate change and ensuring the country’s financial system is prepared for climate-related risks.
Powell reiterated that climate change is not a key consideration for the Fed when developing monetary policy, stating that climate-related issues are more for the federal government than for his institution. ‘Decisions about policies to directly address climate change should be made by the elected branches of government and thus reflect the public’s will as expressed through elections,’ he said.
– The US Department of the Treasury’s anti-money-laundering whistleblower program got a shake-up in the recent omnibus congressional spending bill that, according to the WSJ, lawyers expect will result in more whistleblower cases. The changes to the Treasury program include setting a minimum potential award of 10 percent of monetary penalties in any enforcement action taken. The program has also been expanded to accept tips on sanctions-evasion violations, and whistleblowers reporting possible violations of money-laundering and sanctions law are protected from retaliation.
‘There were some concerns that this program was all bark and no bite; now with these additional improvements, it gives it teeth and brings it directly in line with the [SEC] whistleblower award program,’ said Jane Norberg, a former head of the SEC program who is now a partner at Arnold & Porter Kaye Scholer.
– Reuters reported that, according to new figures from the National Association for Law Placement (NALP), law-firm associate diversity ticked up in 2022 as the pace of change at the partner level remains slow. The percentage of minority summer associates jumped about 2 percentage points last year to 43 percent, according to NALP’s annual Report on Diversity at US Law Firms. The report said the change was mostly due to law firms hiring more black and multi-racial law students for the summer internships, which often lead to a permanent job offer.
Nationally, more than 28 percent of law firm associates are minorities and nearly half are women, NALP found. Only 11.4 percent of law firm partners are from minority groups, and just 26.65 percent are women, the report noted, representing only incremental increases over the past two years.
– The WSJ reported that activist investor Nelson Peltz intends to mount a proxy fight for a seat on Walt Disney Co’s board. Disney revealed the activist’s intentions in a statement that said it is opposed to having him join the board. It also said current director Mark Parker would become board chair, succeeding Susan Arnold. Disney said that although members of its senior leadership team have engaged with Peltz many times over the past few months, the board is asking shareholders to vote against him at the coming AGM.
– Apple said in an SEC filing that CEO Tim Cook will receive a pay cut in 2023 to $49 mn in total compensation, CNBC reported. Cook requested the change, Apple said in the filing, following a shareholder vote on his pay package. The company also reduced the number of restricted stock units Cook would receive if he retires before 2026.
Apple’s compensation committee said it made the change in response to last year’s say-on-pay vote, in which 64 percent of shareholders approved Cook’s compensation, down from 95 percent approval in Apple’s 2020 fiscal year. Apple’s board praised Cook’s performance and said it has confidence in the CEO’s long-term strategic decisions.
Executive compensation has come under increasing pressure from institutional shareholders of late. Institutional Shareholder Services recommended that Apple shareholders vote against Cook’s pay package at last year’s AGM.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
