ISS takes aim at Apple CEO pay

Pay revolts don’t get much bigger than this. ISS (Institutional Shareholder Services), one of the top global shareholder advisers, has recommended investors vote against the $99m pay and bonus package on offer to Apple CEO Tim Cook.

The Financial Times reports that a letter from ISS tells investors that a stock award given to Cook last year raises a “significant concern”. ISS appears to be particularly concerned with costs of a private jet and personal security which it claims are are much bigger than those on offer to leaders of comparable companies.

State Street expects human rights disclosures

State Street, one of the world’s biggest fund managers, says it expects companies to look closely at whether their supply chains are clear of human rights abuses.

In an article for the Harvard Law School governance blog, State Street says it expects investee companies to disclose “what processes exist for identifying whether risks related to human rights are material to the company’s operations and supply chain”.

State Street also seeks other disclosures, among them how boards oversee the risks related to human rights. “We encourage companies in our portfolios to align their disclosures and practices with our expectations,” it says.

Not very sporting

JD Sports has been fined £4.7m by the competition watchdog after failing to heed an order that it should not share commercially sensitive information with senior managers at Footasylum, another sports company it was in the process of taking over.

The order came in 2019 as part of a merger investigation, but the Competition and Markets Authority (CMA) has since found that JD Sports CEO Peter Cowgill met Footasylum CEO Barry Brown on two occasions in 2021 to exchange information.

The CMA says they discussed Footasylum stock allocations, financial performance, closure of stores, transport and delivery contracts, and negotiations relating to Footasylum’s HQ.

Kip Meek, chair of the CMA inquiry, said: “There’s a black hole when it comes to the meetings held between Footasylum and JD Sports. Both CEOs cannot recall crucial details about these meetings.”

Interim insights

Got an emergency and thinking of hiring an interim CFO? You may want to think again. A team of US researchers has found that investors tend to react badly to interim finance leaders—and companies often don’t see a great deal of action from them either.

“Consistent with the negative short-term response to interim CFO appointments, we find that interim service period is associated with less strategic investment and lower market valuations,” they write.

The team also found evidence of “income-increasing earnings management” among interim CFOs “presumably to improve their chances of promotion”.

However, that is not to say an interim cannot be a good thing. The team found that “when firms engage an interim prior to hiring a permanent CFO, they make more strategic investments and achieve higher long-term operating performance”.