European Shareholders Dissent Loudest On Director Elections, Remuneration And Share Issuances During 2021 AGM Season


Georgeson | In its 2021 AGM Season Review of shareholder meetings in the UK, the Netherlands, Germany, Spain, France, Switzerland and Italy, Georgeson defines a resolution as having experienced ‘significant’ dissent if it is contested by 10% or more of the total votes cast.

The report found that there was a 37% increase in contested director elections across the seven markets compared to 2020.

The report also found that remuneration-related resolutions were the most contested category, experiencing an 18% increase in shareholder dissent year-on-year.

Spain (IBEX 35) saw the highest proportion of contested remuneration resolutions: 60.6% in 2021, an increase of 33.2% from 2020. The UK experienced the lowest.

Spain also registered a 101.7% increase in contested policy resolutions relating specifically to remuneration policies: from 28.6% in 2020 to 57.7% in 2021.

France and Switzerland faced the most significant increases in shareholder dissent against directors, experiencing a proportional year-on-year growth of 77.3% and 142%, respectively.

In France, this result marked an increase in director elections opposition after two years of sustained decreases.

Domenic Brancati, Chief Executive Officer – UK/Europe at Georgeson, said: “Remuneration remains a key focus area, with shareholders showing a greater inclination to oppose executive compensation resolutions as a result of Shareholder Rights Directive II (SRD II) and the pandemic.

The issues of climate and sustainability also grew in popularity among investors this year in both Europe and the US.

Georgeson found that at least 15 companies in the seven European countries covered by the report put forward 17 board-sponsored Say on Climate resolutions that resulted in voluntary climate disclosures.

There were only two such board-sponsored resolutions in the US, although this was combined with a large increase in climate disclosure shareholder proposals. The US saw the highest number (33) of environmental and social proposals passed.

During the 2021 AGM season, proxy advisor ISS supported all Say on Climate resolutions based on a view that climate strategy transparency allows shareholders to monitor progress effectively and express their opinions on future developments.

In contrast, Glass Lewis has argued that climate transition should remain the board’s prerogative and abstained from voting on Say on Climate resolutions at five company AGMs and recommended against another two.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.