Below are key takeaways from ISS’ recently released Continental Europe 2021 Season Preview. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Governance Exchange and its Report Center tab and, separately, to corporate subscribers by logging into Governance Analytics then selecting the Governance Exchange and the Report Center tab.
- COVID-19 Impacts:
- In response to the continuing Covid-19 pandemic, most European governments extended temporary legislation allowing virtual meetings into 2021. In some markets companies will be allowed to continue to convene virtual meetings also under normal circumstances.
- In 2021, many European companies – financial institutions in particular – are expected to continue to apply a conservative approach to dividends and buybacks.
- Some companies will propose changes to performance criteria and targets used in variable remuneration and may apply derogations from their approved remuneration policies.
- ISS has released a Continental Europe FAQ document on executive compensation in light of the pandemic to provide further information.
- Shareholder Rights Directive II (SRD II):
- In line with SRD II requirements, many European companies will give shareholders a vote on remuneration reports and/or remuneration policies for the first time in 2021.
- In some European markets regulators issued special guidelines on variable remuneration disclosure expectations, but long-expected EU guidelines have not yet been issued in final form.
- Updates on local SRD II developments throughout Europe can be found on ISS’ SRD II Resource Center
- Say-on-Climate votes:
- New “Say-on-Climate” votes are upcoming at a number of large European companies, at this time mostly being management proposals with the companies providing non-binding advisory votes on their climate plans.
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