Unilever pulled the plug on the proposal last Friday after opposition from a vocal group of UK shareholders. That happened before U.S.-based Glass Lewis, influential with U.S. institutional investors, distributed its report.
In endorsing Unilever’s move, Glass Lewis had taken a different path from rival firm PIRC, a smaller adviser with a greater focus on the United Kingdom.
PIRC encouraged shareholders to oppose the move, noting that many of them would have been forced to sell their Unilever shares at a time and price not of their choosing, due to the shares being kicked off Britain’s blue chip FTSE 100 index.
In contrast, Glass Lewis said the long-term benefits of simplifying the company’s dual-headed, Anglo-Dutch structure outweighed the near-term consequences for those shareholders.
“We do not consider index rebalancing to be inherently uncommon or onerous,” Glass Lewis said in its report from last week, which was made public on Tuesday.
“Nor do we believe scuttling the simplification by virtue of this issue ... represents a suitably long-term perspective.”
It argued that opposing the change “would have the effect of obstructing a range of strategic and governance benefits and essentially signal that Unilever should maintain an arguably anachronistic structure indefinitely”.
Additional reporting by Simon Jessop in London; editing by Jason Neely/Keith Weir