Generation Investment Management, the sustainability boutique co-founded by Al Gore and David Blood, has launched a campaign against what it terms “sordid” pay awards at real estate giant Jones Lang LaSalle (JLL).
The firm disclosed a 7.5% stake in New York-listed JLL and followed up with a filing to the SEC in the form of an email outlining its “significant corporate governance concerns” about JLL to proxy firm ISS.
The email, signed by Co Chief Investment Officer Mark Ferguson, calls for an urgent discussion with the ISS analyst who covers JLL.
Ferguson says the executive compensation section of JLL’s proxy report “makes depressing reading for shareholders” – particularly the “wholly inappropriate” $11m compensation package for outgoing CEO Colin Dyer.
Ferguson calls this a “clear example of pay for failure” and contrasts it with JLL’s rival CBRE which he says is better run.
“Diving into the sordid details of Mr Dyer’s ‘Retirement Agreement’ makes one wonder whether the ‘Retirement Agreement’ was written by Mr Dyer himself rather than independent board members supposedly acting in the interests of shareholders,” the email states.Generation concludes that the compensation committee is “not representing the interests of shareholders and we have decided to vote against both the compensation plan and the committee responsible for it”.
It would discuss “several other serious governance concerns” with the analyst on the call.
“We will be writing to our clients (some of the largest asset owners globally) to explain our decision,” the email states.
“We very much hope – given our detailed knowledge of this issuer [company] and the manifest cause for concern apparent in the proxy report – that your analyst will find time to contact us directly.”
For its part, JLL has a commitment to sustainability saying it is an opportunity to create and to deliver value to clients, saying “an increasing body of evidence shows that investors are looking at the overall citizenship of businesses to inform their investment decisions”. The firm is a member of the World Green Building Council’s Corporate Advisory Board and is a constituent of the Dow Jones Sustainability Index. JLL told Responsible Investor it is reviewing the letter and that it wouldn’t be appropriate to comment at the moment and ISS declined to comment.