On Governance: 2019 Proxy Season was Huge for E&S Proposals

From the Conference Board:

For the third year in a row, environmental and social (E&S) proposals are most of all shareholder proposals filed (political spending resolutions have increased in advance of the 2020 presidential elections).
Voluntary withdrawals of shareholder proposals have been increasing and in 2019 close to half of E&S proposals were withdrawn after engagement and agreement, a trend which continues from 2018 and was, in part, fueled by the federal government shutdown in early 2019 causing a backlog in no-action letters the SEC had to review.

More shareholders are supporting E&S proposals than are casting abstention votes.


A central theme of the webcast was that the interest in E&S issues in many company proxies this year was reflective of the transformation of shareholder engagement. “People used to say there was a proxy season and an off-season,” Bieber said during the webcast. “Now, they say it’s proxy season and engagement season.”

Maybe it’s more like, “It’s always engagement season now,” Washington chimed in.

The Conference Board analysis has so far focused on 227 E&S proposals filed by shareholders compared to 279 governance proposals. Key governance topics during this proxy season were CEO/chairman separation and (54 proposals) and the request to allow (or ease requirements to) act by written consent (36). Key environmental and social policy topics included political contributions disclosure (59 proposals) and environmental issues (26)….

[C]ompanies are more prone to engage with proponents of E&S proposals compared to a few years ago. At the same time, far fewer companies are willing to negotiate with proponents of governance-related shareholder proposals. (Only 1.4 percent of governance-related proposals were withdrawn, compared to 16.3 percent of E&S proposals.) It is worth noting that the number of governance shareholder proposals omitted by companies (47) is greater than the number of E&S proposals omitted (39).

via On Governance: 2019 Proxy Season was Huge for E&S Proposals

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