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Shareholders sent strong signals to management and activists alike: more directors failed to attain majority support and the average support for environmental and social proposals fell as well, according to the ProxyPulse™ report released today by global Fintech leader, Broadridge Financial Solutions, Inc. (NYSE:BR). At the same time, growing numbers of individual investors entered the market.
“Shareholder support was at a 5-year low for management and shareholder proposals alike,” said Chuck Callan, Broadridge SVP Regulatory Affairs, a co-author of the report. “The proportion of company shares held by individual investors rose to 31.5%, the highest in 5 years, and more of them are voting.”
Specifically, the data show that:
- Expectations of Directors Are Increasing: 654 directors failed to attain majority support, the greatest number in five years.
- Support Has Declined for Say-on-Pay: Support for Say-on-Pay proposals (at 86.3% on average) was the lowest in five years.
- More Shareholder Proposals and Less Support: While there were more shareholder proposals (588) than at any time over the past five years, shareholder support fell to 24.6% on average (a 10-percentage point drop from last season).
- The Climate Has Cooled for ESG: Support for environmental and social proposals decreased to 25.5%, on average, from 30% the prior season and was the lowest in five years.
- More Retail Investors Are Finding Their Voice: Voting participation by individual shareholders increased to 29.6% from 29.4% last year.
The 2023 Proxy season was notable as well for the continued wide divergence in voting sentiment between individual and institutional shareholders. Individual investors cast only 16% of their votes in favor of environmental and social proposals while institutions cast 25.5% in favor.
Preference for Virtual Shareholder Meetings Remains High
Companies and shareholders continue to realize the benefits of online meetings and technology continues to advance the trend. The number of virtual-only meetings was close to the all-time high at the height of the pandemic, and few companies are returning to in-person only meeting format.
In the first six months of 2023, there were 1,815 “virtual only” meetings, close to the all-time during the pandemic (1,832 in 2022 and 1,891 in 2021).
The Broadridge ProxyPulse™ report highlights voting trends over the past five proxy seasons. Download the full report.
