Georgeson publishes 2021 European AGM season review

Dissent from European shareholders during the 2021 AGM Season was at its most significant on the subjects of director elections, remuneration and share issuances, according to a new report by 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 percent or more of the total votes cast.

The report found that there was a 37 percent 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 percent increase in shareholder dissent year-on-year.

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

Spain also registered a 101.7 percent increase in contested policy resolutions relating specifically to remuneration policies: from 28.6 percent in 2020 to 57.7 percent 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 percent and 142 percent, 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.

“Similarly, we saw shareholders leveraging votes against directors to show their displeasure on particular issues such as climate change and other environmental concerns.

“More investors are also opposing resolutions to issue new shares, likely to protect against share dilution and reduce the chance of possible takeovers.

“The increased opposition to votes on remuneration, director elections and share issuance is a warning for companies to focus on their shareholder engagement and education, particularly during the off-season.”

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 U.S. 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.

The report is available at https://www.georgeson.com/uk/insights/2021-agm-season-review.