Shearman & Sterling's 14th annual Corporate Governance & Executive Compensation Survey reveals an abundance of data across a broad spectrum of key corporate governance and executive and director compensation practices for the 100 largest NYSE- and Nasdaq-listed companies, as well as focused insights on discrete topics such special board committees, shareholder activism and IPO governance.
The report's deep dive into shareholder engagement practices includes these noteworthy findings:
- 81% of the companies made shareholder engagement disclosures in their annual proxy statements, but only four companies disclosed that they have adopted a shareholder engagement policy.
- 60% of the companies making shareholder engagement disclosures disclosed the reasons why they engage - including, e.g., to provide transparency into the company’s business and governance practices, and ensure understanding and consideration of the issues that matter most to the company's shareholders.
- Many companies made their shareholder engagement disclosures in multiple places within their proxy, with the CD&A being the most common location, closely followed by the corporate governance section and then the proxy statement summary.
- For most companies, the CEO, CFO, IR head, and Corporate Secretary are significantly involved in the engagement process.
- 40 companies disclosed that directors are engaging, with most of those reporting that engagement is handled by the board/independent directors/non-management directors or the lead independent director/independent chair.
- 62 companies disclosed the extent of their outreach to/contact with shareholders - with the most common approach being total % of outstanding shares held by those they engaged with.
- 29 companies disclosed the specifics as to how they engaged.
- 70 of the companies provided some details as to the topics on which they engaged, with executive compensation being most common, followed by corporate governance matters generally (including emerging issues).
- 57 companies disclosed that they took specific actions in response to shareholder engagement - most commonly changes to or reaffirmation of executive compensation practices and/or adoption of proxy access.
See the firm's release, and additional resources on our Board Practices, Institutional Investors and Shareholder Engagement topical pages.