Georgeson—Georgeson’s “A Look at the 2024 Proxy Season" includes a plethora of informative and instructive data on Russell 3000 shareholder proposals for annual meetings held July 1, 2023 - June 30, 2024, with comparisons to the prior two proxy seasons.
Of a record-breaking 1,000 identified shareholder proposals submitted, 37% were governance-related, 34% were social-related, 17% were environmental-related, and 11% were anti-ESG. Of the 635 (64% of submitted) voted proposals, 38% were governance-related; 35% were social related; and 13% were environmental-related.
Average support declined to a three-year low for E&S proposals (21% and 20%, respectively, this season, down from 39% and 29%, respectively, in 2022) and increased season-over-season for governance proposals (up from 29% last season to 35% this season). Passage rates for E&S proposals were also very low at 2.4% for environmental proposals (down from 27% in 2022) and 0.4% for social proposals (down from 11.6% in 2022), in stark contrast to the 21% passage rate for governance proposals.
More than half of submitted environmental proposals related to GHG reduction or plastic/sustainable packaging, as shown here:
Only two of 83 voted environmental proposals garnered majority shareholder support:
Environmental proposals supported by both ISS and Glass Lewis garnered average shareholder support of 31% as compared to 21% for all voted environmental proposals, whereas shareholder support for proposals where both ISS and Glass Lewis issued “against” recommendations averaged 11%, illustrating the significant impact of the proxy advisory firm recommendations.
Similarly, average support rose to 27% for social proposals supported by both ISS and Glass Lewis compared to 10% average support in the context of both firms recommending against.
More than 2x as many governance proposals were approved this season compared to last season at 50 and 24 proposals, respectively. Passing proposals and average shareholder support for the 2023-2024 season are shown here:
While the number of independent chair proposals declined significantly this season compared to last season, it was generally on par with the 2022 season and average support has been consistent each season since 2022 at 31%.
Glass Lewis—In its “2024 Proxy Season Briefing,” Glass Lewis provides an informative overview of its voting trends across the US and other markets for companies that held annual meetings between January 1 and June 30, 2024.
PwC—While PwC attributes the ongoing reduction in shareholder support for environmental- and social-related (E&S) shareholder proposals to proponents’ failure to pick up on the market sentiment evidenced clearly last season that such proposals were overly prescriptive and thus not broadly supported, it also cites companies’ increased sustainability disclosure as a likely factor that is bridging the investor expectations information gap, which is generally consistent with major institutional investor voting reports. In addition to E&S proposal trends, the report: “2024 proxy season recap: Disclosures catch up with investor expectations” notes and provides insights on (among other things) multi-year high rates of support for say-on-pay and director elections, as well as no-action submission and disposition trends.