Investor Relations Week: US Enters Bear Market, BlackRock’s Success in Voting Efforts and Three-for-One Stock Split at Tesla

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– U.S. stocks closed in a bear market on Monday, after “a dramatic late-session selloff,” according to the FinancialTimes (pay wall). The document reported that Wall Street’s stock benchmark, the S&P 500, fell 3.9% to close at its lowest level since January 2021. The move left the index more than 20% down. below its all-time high in January 2022, a commonly identified benchmark for a bearish. market.

The Wall Street Journal (paywall) reported that BlackRock’s efforts to get institutional investors to vote for their own shares are taking shape, with its voting choice platform adding investors representing around $120 billion in assets since its launch in October. BlackRock launched the program in response to feedback from customers who said they wanted more control over voting. Around 45% of eligible investors have expressed interest in the platform.

Asset managers typically vote on shareholder proposals on behalf of investors in passive index funds, giving them enormous influence over corporate decision-making. Companies have used their influence to push companies to improve diversity and reduce reliance on fossil fuels, among other things. Their stance on social issues has drawn complaints from some business executives and lawmakers. A group of Republican senators introduced a bill last month calling for individual investors in passive funds to have the ability to vote their shares.

– Tesla in its proxy statement disclosed that it was planning a three-for-one stock split and that board member Larry Ellison did not plan to run again, according to CNBC. The company wrote of the proposed stock split: “Our success depends on attracting and retaining excellent talent” and “highly competitive compensation” offering each employee an option to receive stock helped Tesla to do so. “We believe the stock split would help reset the market price of our common stock so that our employees have more flexibility in managing their equity,” the company added.

– In other Tesla news, CNBC reported that Elon Musk appealed a judge’s refusal to end his 2018 deal with the SEC requiring a Tesla attorney to verify some of his Twitter posts. A court filing says Musk will ask the 2nd U.S. Circuit Court of Appeals to overturn U.S. District Judge Lewis Liman’s April 27 ruling that allowed the deal to stand. The SEC declined to comment.

– A bill to clarify the rules and roles of crypto regulation could inadvertently “undermine” other market protections, CoinDesk reported SEC Chairman Gary Gensler as said. Gensler was talking to the WSJ‘s CFO Network Summit when asked about a bill introduced by US Senators Cynthia Lummis and Kirsten Gillibrand last week. Gensler said he would prefer to talk to lawmakers first, but that from his agency’s perspective, “what we wanted to do is continue to protect” the role his agency plays in overseeing how whose companies can fundraise from the general public.

“Frankly, if I can turn away from the legislation, we don’t want to undermine the protections we have in a $100 billion capital market. You don’t want our current stock exchanges, our current mutual funds, our current public companies [to] sort of inadvertently by a pen stroke say, You know what? Me too I want to be non-compliant, I want to be off the diet I think that’s been a boon for investors and economic growth over the past 90 years,” Gensler said in the post.

Reuters (paywall) reported that the Basel Committee has released a detailed checklist for banks to assess how climate change affects all aspects of their business, including salaries and capital. International banks will need to consider whether they are properly quantifying climate change risks, despite sometimes patchy data and time horizons that go beyond traditional risk assessments and rewards.

The guidance is the latest effort by regulators to examine how their regulation covers climate change in a sector at the forefront of efforts to transition to a net zero economy. Banks must review how climate change risks affect their business strategy, training for senior executives and board members, internal controls, capital and short-, medium- and long-term compensation, according to the guidelines .

“The board and senior management should consider whether integrating material climate-related financial risks into the bank’s overall business strategy and risk management frameworks may warrant changes to its compensation policies,” said the Basel Committee.

– As market losses mount, “there’s bad news for early fundraisers,” said Institutional investor, noting that some dispatchers say they won’t work new funds into the inaugural funds. “The chill” comes after years of allocation more open than ever to emerging managers, alternative metrics for judging the potential of new companies and new investment ideas – particularly in private markets, according to the publication. Now, however, “the tide is turning” for asset owners, who say that even if they aren’t fully verified, they want to stay away.

– The head of Morgan Stanley’s securities business in China has proposed setting up an international board in China to allow overseas-listed Chinese companies and foreign companies to list in the domestic market. It depends Reuterswhich reported that Jing Qian, CEO of Morgan Stanley Securities (China), also told the official Shanghai Securities News in an interview that China should consider lowering the break-even point for IPOs of tech companies and start-ups.

The proposal comes as a growing number of U.S.-listed Chinese companies are making secondary listings in Hong Kong amid a long-running dispute between China and the U.S. over audits looms. to expel them from US stock exchanges, the news agency said.

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