Shareholder Activism Increase — On Both Sides

Shareholder activism is on the rise, according to a new analysis released this morning by The Conference Board (and shared in advance with CEO Daily.) The volume of shareholder proposals is expected to increase in 2023, in part because new rules from the SEC narrow the grounds for excluding such proposals, and also because more players are getting into the game.

A few important trends:—Shareholder actions on ESG topics are rising, but the percentage of those actions that succeed is declining. The number of climate-related proposals filed against Russell 3000 companies last year, for instance, jumped to 102 from 60 in 2021. But average support for those proposals dropped to 34% in 2022 from 40% in 2021. The report says that’s not a sign of an ESG backlash, but rather a result of “lower quality” ESG proposals and a belief by shareholders that companies are dealing more seriously with ESG issues to begin with.

—Average support for directors in the Russell 3000 slipped last year to 94% from 95% in 2021. And actions opposing executive compensation packages gained more support, rising to 32% in 2022 from 21% in 2021. The study’s authors expect those trends to continue in 2023, as lower stock prices create a more fertile environment for activists looking to speed up strategic and capital allocation changes.

—“Anti-ESG” shareholder proposals are expected to rise this year, driven by both poor corporate performance and ideology.


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