Trends in Shareholder Proposals: What Matters Most to Investors?

Episode Summary

It’s one thing to talk about what matters to shareholders, but a majority vote on a submitted shareholder proposal speaks volumes. Proxy Monitor is a publicly available database that tracks shareholder proposal activity for the 250 largest U.S. public companies. The Manhattan Institute’s Jim Copland digs into the empirical database to share insights and trends in shareholder voting.

Social Policy Proposals Outnumbered the Rest in 2016.

    When looking at the types of shareholder proposals that were submitted, social policy proposals (at 49%) outnumbered corporate governance proposals (40%) and executive compensation proposals (11%).

The high concentration of social policy proposals (mostly regarding environmental concerns and political spending) are somewhat unique to the Fortune 250, explains Copland. Kerstetter and Copland discuss how many of these proposals actually won majority votes from the shareholders.

Nearly 50% of Proxy Access Proposals Won Majority Support in 2016.

    Of the 25 proxy access proposals submitted in 2016, 12 proposals received majority support from shareholders.

The shareholders have spoken, and what they want is proxy access. Kerstetter and Copland discuss the New York City Comptroller’s aggressive filing of proxy access proposals in recent years and how that activity is now filtering down to small- and mid-cap markets. Copland explains that boards have some degrees of freedom when it comes to adopting proposals as they appear on the shareholder ballot.

What Other Types of Proposals are Receiving Shareholder Support?

When looking at percentage support, other proposal categories are also attracting attention. As Copland explains, majority voting for directors and declassifying the board are two categories that have been proven to garner shareholder support. Notably, in 2016 Proxy Monitor saw its first political spending proposal to win a majority vote. Copland and Kerstetter dissect the facts, figures, and trends as they look into their crystal ball of shareholder sentiment.

The filming of this episode of Inside America’s Boardrooms was made possible by our Knowledge Partners.