Glass Lewis and ISS back CIAM calls to block Kessler’s SCOR payout

Proxy advisory firms Glass Lewis and ISS have urged SCOR shareholders to vote against large remuneration and compensation packages for SCOR chairman and CEO Denis Kessler, ahead of the company’s AGM on 26 April in Paris.

Glass Lewis also advised shareholders to support calls to separate Kessler’s dual roles of chair and CEO, as set out in a proposal from shareholder CIAM Fund. The proposal calls for “the dismissal of Denis Kessler as director”, citing the leader’s “over-presence, his numerous commitments and the lack of a strong independent leader within the board.”

However, ISS does not support the removal of Kessler, despite advising shareholders against his reappointment as recently as 2017.

Explaining its advice to block the chair/CEO’s remuneration, ISS said SCOR had not provided “sufficient explanation” on the bonus payout for achievements below the ROE target.

It said that the qualitative criteria used represents 67.5 percent of the bonus allocation, which are “considered overachieved without any explanation”, while the bonus structure does not show the alignment of the remuneration and the company's performance.

ISS added: “The bonus allocation provided under the remuneration policy does not seem stringent enough as the ROE-based criterion allows vesting below target performance. The remuneration policy also allows post-mandate vesting without being prorated.”

CIAM said that ISS’s decision not to back the removal of Kessler from his dual posts “creates an unnecessary risk for all SCOR stakeholders”.

The shareholder added: “ISS also seems to forget the benefit of appointing an ad-hoc committee of independent directors to evaluate a takeover offer, and is not concerned about the role of BNP Paribas, SCOR’s advisor in this process, even though Denis Kessler serves on the bank’s board.

“Conversely, Glass Lewis emphasised ‘the desirability of having to appoint a separate committee composed of independent directors who have no real or presumed conflict of interest’.”
CIAM has also called for a vote against Kessler's compensation.

It said it will also vote against the reappointment of Augustin de Romanet lead director of SCOR, CEO of the privatised ADP.

“Despite a recent dialogue with the lead director, CIAM can confirm that he is not in a position to act as a counter-power to Denis Kessler. The Glass Lewis proxy agency highlights that ‘some mandates have not been clearly granted to him... The most important of these, in our view, is the absence of a clear mandate to verify the completeness and relevance of the information provided at board meetings’. Glass Lewis nevertheless supports the re-election of Augustin de Romanet by highlighting the need for the board to conduct an in-depth review of the remit of the lead director.”