Mar 24, 2023
Sweden’s Powerful Wallenberg Family Slams ISS on Voting Rights
(Bloomberg) -- The patriarch of Sweden’s powerful Wallenberg family has railed against a sweeping change to shareholder voting rights that could loosen the grip of the industrial dynasty on the Nordic nation’s stock market.
“The ISS voting recommendation has no merit and goes against the policy direction of the European Commission,” said Jacob Wallenberg, 67, in the annual report of Investor AB, the company founded by his forebears in 1916. He is chairman of the investment firm that continues to exert considerable influence over corporate Sweden with a $65 billion portfolio that includes stakes in Ericsson AB, Atlas Copco AB and EQT AB.
His comments come in the wake of a push by proxy advisory firm Institutional Shareholder Services Inc. to end dual-class share structures in Europe. The updated proposals mean that from February next year the firm will generally vote against directors at a company that has a common stock structure with unequal voting rights.
That poses a direct challenge to the Wallenberg’s investment vehicle which holds many of its ownership stakes with differentiated voting rights. For example, Investor owns 8% of the capital in Ericsson but controls almost 24% of the votes in the Swedish 5G equipment maker.
As part of the new policy recommendation, ISS is also proposing to vote against a board’s discharge from liability for those companies running multiple-voting structures.
“The discharge of liability institute should not be misused in a way which is clearly not intended by the law,” Wallenberg said.
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