Below are key takeaways from ISS’ recently released 2020 Latin America Proxy Season Review. The full report is available to institutional subscribers by logging into ISS Link then selecting the Governance Exchange and its Report Center tab, and to corporate subscribers by logging into Governance Analytics then selecting the Governance Exchange and the Report Center tab.
COVID-19 Pandemic: The global pandemic and the government restrictions to limit the spread of the virus hit the Latin American region as the 2020 proxy season was already underway resulting in an unprecedented number of meeting cancellations, postponements, and the widespread adoption of virtual shareholder meetings in the majority of the countries covered in the region.
Impact on Dividends: Historically low dividend payout proposals were seen in the region as companies adopted more conservative approaches to cash preservation in light of the economic and financial uncertainty. In some cases, companies withdrew or amended previously-disclosed dividend proposals as the global pandemic worsened.
Improved Disclosure in Chile: Material improvements in timely disclosure were seen in Chile, which has historically had the lowest levels of board nominee disclosure amongst the five major Spanish-speaking markets in the region. Approximately 30 percent of all Chilean issuers, and 42 percent of main-index companies with board elections in 2020, provided timely disclosure of their board nominees prior to their shareholder meetings. Nevertheless, lack of timely disclosure remains the norm in Argentina, Chile, Colombia, Mexico, and Peru.
Equity Compensation, Brazil: The number of equity compensation plans, ranging from stock options to share matching plans, continues to increase in Brazil. However, problematic practices also persist in the market, with equity plans most commonly lacking publicly-disclosed performance criteria and metrics, and concerns regarding potential conflicts of interest between beneficiaries and administrators.
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