Proxy Access Gains Momentum Among Shareholders


by FEI Daily Staff

So-called proxy access fights allowing shareholders to nominate directors gained momentum during the 2015 proxy season.

©Sophie James/ISTOCK/THINKSTOCK

Last week, Microsoft joined General Electric and Verizon in adopting proxy access procedures in response to a growing call among shareholders for a greater say in board nominations.

That trend was among the leading governance issues during the run-up to this year's annual meetings.

According to an analysis by Institutional Shareholder Services, proponents submitted nearly 120 proposals allowing proxy access this year, with the issue accounting for 11 percent of shareholder submissions and more than 14 percent of shareholder resolutions.

Proxy Momentum

According to ISS, this year's proxy-access movement is largely attributable to a campaign launched by the New York City Comptroller's Office. The office's Boardroom Accessibility Project accounted for nearly 65 percent of the proxy access shareholder submissions.

The proposals were largely successful, with investors receiving majority support in almost 60 percent of the 84 resolutions for which results were available. Average support was 54 percent, with 95 percent of proxy access proposals that have been voted on receiving at least 30 percent support.

In addition, a dozen companies launched their own access proposals this year, and ISS has identified 41 companies that have adopted, moved to adopt or made commitments to adopt proxy access provisions this year or next.

Leading Topics

Environmental and sustainability (E&S) proposals retained their lead atop the list of shareholder proposals, accounting for nearly 45 percent of the more than 1,030 resolutions submitted among 540 firms.

E&S-related proposals were followed by governance issues (43 percent) and compensation (12 percent).

In the aggregate, the proposals with available vote totals received an average of 33 percent so far, with governance proposals collecting 44 percent support, compensation 29 percent and E&S 20 percent.

On the governance front, the number of proposals related to majority voting proposals and independent directors declined this year, both in numbers of proposals and shareholder support.

ISS believes a larger number of institutional investors are addressing these governance concerns by engaging with boards directly, rather than waiting for proxy season.