NEW YORK, N.Y., October 2, 2018 – The new ProxyPulse™ report released today by Broadridge Financial Solutions, Inc. (NYSE:BR) and PwC’s Governance Insights Center shows that institutional and retail investors differ on social, environmental, political spending disclosure, and proxy access proposals, and on how actively they engage in the proxy voting process.
This report is based on analysis of 4,090 U.S. public company annual shareholder meetings held between January 1 and June 30, 2018 and on Broadridge's processing of shares held in street name.
Highlights
| Institutions | Retail | |
|---|---|---|
| Percent of all shares owned | 70% | 30% |
| Participation in the voting process | 91% | 28% |
| Support of Social & Environmental Proposals | 29% | 16% |
| Support of Political Spending Proposals | 29% | 21% |
| Support of Proxy Access Proposals | 35% | 13% |
Insights
Commenting on this season’s findings were two of the ProxyPulse™ report authors, Chuck Callan, senior vice president, regulatory affairs, Broadridge Financial Solutions and Paul DeNicola, principal, Governance Insights Center, PwC.
Mr. Callan noted, “A new theme emerged over the last few proxy seasons that shows a divergence between how institutional and retail investors view certain topics, such as social and environmental proposals, political spending disclosure by companies, and even how much participants engage in proxy voting. This divergence suggests companies would be wise to participate broadly with all shareholders.”
Mr. DeNicola commented, "The increase in shareholder support for ESG-related proposals is particularly notable. In the 2018 proxy season, institutional investors voted in favor of social and environmental proposals at an average rate of 29% -- compared to just 19% five years ago.”
Notable Topics to Watch
In 2018, companies began making mandatory CEO pay ratio disclosures, comparing the total compensation of their chief executive officer with that of their median employee. Average support for say-on-pay proposals this season remained at 89%, generally consistent over a five-year period. Notably, shareholder support for say-on-pay proposals at companies where the CEO pay ratio was disclosed was the same, on average, as it was at companies that were not required to disclose the pay ratio.
The number of proxy access proposals declined over the last four years, from 81 in 2015 to 34 in 2018. This is primarily due to the number of companies that have adopted proxy access – including 65% of S&P 500 companies. Notably this past season, institutions opposed shareholder proposals that sought to lower existing thresholds or remove limits on the number of shareholders required to reach the ownership threshold.
Additional details, insights, graphics, data, and observations can be found at www.ProxyPulse.com.