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Building long-term shareholder loyalty: The loyalty rewards project

 

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MercerStikeman Elliott LLP and the Generation Foundation (the advocacy group of Generation Investment Management) have completed a year-long collaborative global research consultation with key investment stakeholders regarding ways corporations can build long-term shareholder loyalty.

 

Building a Long-Term Shareholder Base: Assessing the Potential of Loyalty-Driven Securities reveals that while investors, corporations, fund managers, academics and other thought leaders broadly agree that short-term investment behavior does have a negative impact on the way companies make key decisions, there is little support for the introduction of loyalty driven-securities in the form of loyalty dividends, warrants or additional voting rights.

 

A LONG-TERM SHAREHOLDER BASE: ASSESSING THE POTENTIAL OF LOYALTY-DRIVEN SECURITIES

 

 

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APPENDIX A - LEGAL PERSPECTIVE ON THE USE OF LOYALTY REWARDS

 

 

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APPENDIX B - REVIEW OF EXISTING LOYALTY REWARD PRECEDENTS

 

 

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More than 100 leading investment managers, asset owners, corporate directors and industry and academic experts participated in the consultation. The group included 41 asset owner organizations, 43 investment management organizations, 24 publicly-listed companies in the US, Canada, Australia, United Kingdom, the Netherlands and France, as well as representatives from proxy voting advisory firms, corporate governance advisory firms, securities regulators and securities law firms, as well as a number of academics and other well-known thought leaders. 

 

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arrow icon View the consultation’s background materials 

 

About the research partners

 

Mercer is a leading global provider of investment consulting services, and offers customized guidance at every stage of the investment decision, risk management and investment monitoring process. We have been dedicated to meeting the needs of clients for more than 30 years, and we work with the fiduciaries of pension funds, foundations, endowments and other investors in some 35 countries. We assist with every aspect of institutional investing (and retail portfolios in some geographies), from strategy, structure and implementation to ongoing portfolio management. We create value through our commitment to thought leadership; world-class, independent research; and top-notch consultants with local expertise.

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