Below is an excerpt from ISS-Corporate’s recently released article “Pro-ESG Shareholder Proposals Regaining Momentum in 2024”. The full article is available on the ISS-Corporate online library.
Governance is back in focus this proxy season, with both the volume and support on proposals aiming to enhance shareholder rights and companies’ governance practices gaining steam. Environmental and social proposals are showing a sign of reversing trend of declining support from the 2021 peak, while anti-ESG proposals are gaining volume but not support.
We reviewed proposals submitted for Russell 3000 company AGMs held between Jan. 1 and May 31 for each year since 2020 to shed light on how investors were bringing up their concerns ahead of the May 23 peak U.S. AGM date, which topics carry the greatest currency, and their level of success.
KEY TAKEAWAYS:
- The volume of shareholder proposals submitted for annual meetings held between Jan. 1 through May 31 increased to 739 proposals with 273 voted thus far and 249 still pending.
- The median support level of all shareholder proposal is largely unchanged at 20.6% for 2024, but those receiving majority support is ticking up.
- Governance and compensation proposals are regaining focus and interest from investors, with 268 such proposals submitted for the first five months of 2024. The median support surged to 34.9%, a level unseen in the past five years.
- The volume of environmental proposals decreased to 130 proposals and social proposal volume remained mostly flat. However, support on both environmental and social proposals are up slightly, reversing the two-year consecutive decline in support since 2021.
- Anti-ESG proposals continue to increase in number, but the support remains low.
- Top 5 most prevalent proposals on ballot represent a broad range of topics, including shareholder rights, board accountability, executive pay, GHG emissions, and political spending.
By: Jun Frank, Managing Director, Compensation & Governance Advisory, ISS-Corporate
