Proxy voting firm Glass Lewis has denied that its voting advice amid a bruising proxy contest at Canadian Pacific Railways recently was influenced by its owner, the C$117bn (€91.7bn) Ontario Teachers’ Pension Plan.
It was responding to a letter sent by the US Chamber of Commerce and the Center for Capital Markets Competitiveness questioning whether its advice ahead of the venerable railway company’s annual meeting last month were independent from the OTPP.
Canadian Pacific was under attack from activist investor Bill Ackman, who put forward a slate of dissent directors, which was supported by Glass Lewis.
“Glass Lewis refutes the assertions made by the Chamber of Commerce and CCMC in their letter to the SEC,” Glass Lewis said in a statement.
The firm, which competes with rival Institutional Shareholder Services (ISS), was acquired by the pension fund in 2007. Its clients control some $15trn of assets.
“OTPP is the owner of Glass Lewis, not its operator,” the statement continued. “As an owner with a long-term horizon, OTPP is committed to ensuring Glass Lewis continues as an independent advisor that puts the interests of its clients ahead of all others.” Glass Lewis said it made special reference in the Canadian Pacific report to its OTPP link.Glass Lewis pointed out in its recommendations and the fund’s actual votes were not the same. “The CCMC is simply wrong when it suggests that Glass Lewis was improperly influenced in formulating its voting recommendations.”
“Conflicts of interest by proxy advisory firms show that the system is out of whack,” said CCMC Vice President Tom Quaadman.
Meanwhile, ISS has faced a barrage of criticism from Sir Martin Sorrell, the CEO of advertising giant WPP, over its advice to investors to vote against the company’s pay at its AGM on June 13 in Dublin.
Sorrell’s stance has been supported by the influential Lombard column in the Financial Times which says ISS needs “greater scrutiny”.
UK proxy firm PIRC has now entered the debate, saying Sorrell fails to acknowledge that institutional shareholders themselves have a problem with WPP’s pay policy.
“One could therefore read the article and assume that the only reason that the company is facing a defeat is because proxy advisers had recommended opposing the remuneration report.
“This is clearly inaccurate, as a quick ring around some of the leading UK institutions would demonstrate.”