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Season’s Meetings: Proxy Season Highlights

Management Proposals

Support for management proposals remained unchanged from last year, standing at 94.7 percent. While the overall balance seemed to stay the same, a few interesting trends emerged during the past proxy season. Executive pay, which is a hot topic on an annual basis, saw opposition rates hit a new high this proxy season. 67 US Say-on-Pay votes failed to receive a majority vote from shareholders. This number is drastically higher than last year’s final figure, which saw 38 votes fail to reach majority. While 67 proposals failed to receive a majority vote, another 141 proposals only received between 51-69% support, and 631 proposals received less than 90% support from shareholders.

Auditor ratification proposals were highlighted by a few high-profile instances this season as well, which is uncommon. These proposals have received no less than 99.7 percent support on average in each of the last three years, yet General Electric and Wells Fargo faced backlash for their proposals. General Electric’s reappointment of KPMG faced a rebellion from shareholders, receiving 35.1 percent opposition after ISS and Glass Lewis both issued their recommendations to oppose the ratification of KPMG. Glass Lewis made a similar recommendation for Wells Fargo’s proposal, but the proposal still received 91 percent support.

Shareholder Proposals

Support for shareholder proposals saw an increase to 32.9 percent, almost up a full percentage point from last year (32 percent).

Although many had high hopes for ESG issues this season, support fell after a successful 2017 campaign. Average support for two degree proposals fell from 45.4 percent to 35.7 percent. The number of resolutions also dropped from 17 to 8.

Shareholder rights seemed to be a key focus point, however. Proposals to amend the right to call a special meeting were the most popular type of shareholder resolution. 61 of these resolutions were submitted this year, up from the 20 that were introduced last year.