CII's (CII-REF, i.e., Research and Education Fund) "Clearing the Bar: Shareholder Proposals and Resubmission Thresholds" analyzes the impact on resubmittal eligibility for shareholder proposals under three different increased resubmission threshold scenarios (i.e., above the current 3%|6%|10% support thresholds) based on its analysis of over 3,600 Russell 3000 company shareholder proposals that went to a vote between 2011 and 2018.
Key findings include:
- One-third of the 3,620 shareholder proposals voted between 2011 and 2018 went to a vote two or more times at the same company (i.e., they were second or subsequent submissions).
- The 3,620 proposals were voted at 677 total companies.
- Under the current 3%|6%|10% thresholds:
- About 95% of proposals are eligible for resubmission after the first attempt, and 90% after the second and third attempts. Nearly all proposals that clear those thresholds and that are submitted again remain eligible in subsequent submissions.
- About 20% of proposals win majority shareholder support on the first attempt. Less than 5% of proposals that fail to win majority support the first time pass in a subsequent attempt.
- Governance issues comprise the most common ESG proposal subject matter and win the highest levels of support. About 97% of governance proposals, 92% of environmental proposals, and 87% of social proposals satisfy the current resubmission thresholds.
- Raising the resubmission thresholds would reportedly impact proposal excludability as follows:
- Increasing the support thresholds to 5%|10%|15% would roughly double the number of ineligible proposals.
- Increasing the support thresholds to 6%|15%|30% would triple the number of ineligible proposals.
- Increasing the support thresholds to 6%|12%|20% would fall in between the two above scenarios.
The report includes additional detail by submittal frequency, shareholder support, proposal subject matter, and proponent type, and a table identifying the specific proposals voted between 2011 and 2018 that would not be eligible for submittal assuming an increase in the initial threshold to 5% or 6%.