Glass Lewis released the results of its inaugural annual policy survey for the 2024 proxy season. There were 557 responses to the survey consisting of 140 responses from institutional investors (asset managers and asset owners) and 417 responses from non-investors, which consisted of public companies, corporate advisors, shareholder advocates, and other non-investors. Unfortunately, for purposes of reporting the survey results, responses from shareholder advocates (albeit presumably not more than 16 responses based on the demographics detail) were aggregated with issuers and other non-investors, which dilutes or potentially skews the analysis of the data and any resulting conclusions. The number of respondents varied by question.
The Society submitted a comment letter to address several questions in detail and to respond to the balance of the questions in the online survey that were pertinent to issuers, notwithstanding significant concerns about survey bias and other issues manifested by the questions and prepopulated, multiple choice answer selections, which we addressed in the letter (see Section I. General Comments).
Key takeaways from the online survey on the topics the Society addressed in the comment letter include:
Plurality Voting
Question 14. Majority voting is common in most markets, and many U.S. companies have adopted the practice; however, the plurality voting method is still widely used in U.S. director elections. In your opinion, should boards that use the plurality method for uncontested elections be subject to adverse recommendations? (n=71 investors; 130 non-investors)
- Approximately one-quarter of investor respondents indicated that use of the plurality voting method is problematic, but that it doesn’t warrant an adverse vote, while another approximately one-quarter said “it depends.” A plurality of non-investor respondents said boards should not be subject to adverse recommendations and that the plurality method is not problematic.
Question 15. Some U.S. companies that use plurality voting also maintain a majority resignation policy, whereby directors who fail to receive a majority vote must submit their resignation to the board of directors for acceptance or rejection. If you consider plurality voting problematic, are your concerns mitigated by a majority resignation policy? (n=68 investors; 152 non-investors)
- A plurality of investor respondents (43%) and a majority of non-investor respondents (64%) indicated that their concerns about plurality voting are mitigated by a majority resignation policy.
Board-Level Responsibilities
Question 19. When a non-executive director serves on multiple boards, should their specific roles on those boards (e.g., lead independent director, audit committee chair, etc.) be factored into the analysis of their total commitment level? (n=85 investors; 203 non-investors)
- A majority of investor respondents (60%) said that all committee memberships should be factored in, while a plurality of non-investor respondents (32%) said that only board and committee leadership positions should be factored into the analysis.
Emerging Board Skills
Question 27. How important do you consider the following director skills/qualifications to be in your assessment of board skill sets? (n=86 investors; 167 non-investors)
Responses to prepopulated enumerated skill sets and response choices (other than “no opinion”) are shown below. Plurality or majority responses are highlighted.
Question 33. Is it appropriate for all multi-national companies to set their pay to global industry peer levels, rather than local peer levels? (n=68 investors; 152 non-investors)
- A plurality of investor respondents (32%) selected the response: “Only large-cap multi-nationals that don’t have similarly sized local peers should ignore the local pay environment,” while a plurality of non-investor respondents (40%) selected the response: “Yes, any companies with operations overseas should be able to compete globally.”