Below are key takeaways from ISS’ recently released 2023 Proxy Season Review – US Director Elections & Governance. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Governance Exchange and its Report Center tab and to corporate subscribers by logging into Governance Analytics then selecting the Governance Exchange and the Report Center tab.
- Investor dissent against directors remained relatively high: Although the number of directors who failed to receive majority support declined year-over-year, the proportion of Russell 3000 Index directors who received less than 80 percent support remained elevated over historical levels.
- More proponents utilize Vote No Campaigns targeting directors: A new high of more than ten individuals and groups filed Vote No Campaigns against directors in 2023, though the overall 26 companies targeted was slightly lower than in 2022.
- Concerns regarding board responsiveness appear to be a significant factor in directors receiving less-than-majority support: A perceived lack of responsiveness to governance or compensation related concerns appears to be a significant driver of low director support, while concerns regarding board diversity were not as pronounced in 2023.
- Shareholder proposals regarding independent board chair requests were the most prevalent governance-related proposals: On governance topics, proponents focused their efforts on shareholder proposals regarding independent board chairs, representing just under half of all governance-related shareholder proposals on ballot in the 2023 proxy season.
- Some SPACs turn ‘zombie’: Facing approaching deadlines and increasingly out of favor with many investors, Special Purpose Acqusition Companies increasingly seek approval to extend the time provided to find a suitable merger party. Shareholder redemptions leave the coffers depleted and make it harder to consummate a deal.
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