New York City Comptroller Brad Lander and the New York City Retirement Systems released their "2023 Shareowner Initiatives Postseason Report" covering the New York City Pension Funds' shareholder proposal activities and other shareholder initiatives and advocacy efforts for the fiscal year ending June 30, 2023.
Among the key takeaways:
- The Funds submitted 32 proposals to 32 portfolio companies (Table 1, p7), 47% of which were withdrawn based on favorable engagement. This compares to 85% of proposals withdrawn of 25 proposals submitted in 2022.
- Shareholder support for the Funds’ proposals voted averaged 27% in 2023 compared to 35% in 2022. Average shareholder support for proposals seeking corporate action or disclosure declined more dramatically from 2021’s high of 33.3% (48 proposals) to 21.8% in 2023. Climate proposals averaged just 13% average support in 2023.
- The report attributes the reduced support for the Funds’ proposals and ESG proposals generally to the conservative ESG backlash and an associated “chilling effect on some asset managers, including BlackRock, Vanguard, and State Street Global Advisors,” notwithstanding publicly articulated statements from those (and other) asset managers regarding the bases for their reduced support, which was attributed to the overly prescriptive, micromanagerial, immaterial, and recurring nature of many shareholder proposals, coupled with companies’ enhanced disclosure and/or substantial implementation. See our prior reports here: BlackRock | Vanguard | T. Rowe Price | State Street (see above report).
- Of all votes cast at 3,126 annual and special meetings for US companies across all proposal categories, the Funds voted contrary to management’s recommendations on at least one proposal at 76% of meetings, including votes against the election of nearly 35% of directors.
- Also specific to US companies, the Funds voted against management recommendations on 93% of board-related, 92% of shareholder rights-related, 92% of compensation-related, 86% of social-related, and 79% of environmental-related shareholder proposals.
The report includes detailed discussions on submitted and withdrawn proposals and an overview of the Comptroller’s and Funds’ involvement in other investor stewardship initiatives.
See Comptroller Lander’s release and postseason report highlights.
This post first appeared in the weekly Society Alert!