From the Conference Board: 2013 Listing of Shareholder Proposal Subjects

 
(Pix (c) Larry Catá Backer 2013)

This from Matteo Tonello and our friends at the Conference Board:

• Shareholder proposal subjects (November 18, 2013)
• Shareholder proposals on proxy access (November 4, 2013)
• Majority-supported shareholder proposals (October 28, 2013)

The issue of shareholder proposals may indicate those issues currently of importance to at least activist shareholders and may also suggest movement in social expectations of corporate behavior among institutional investors. For civil society elements interested in using shareholder activism to deepen engagement of corporations with issue sof adverse human rights impacts these chars may provide some information about the ways those strategies are being shaped.I would be interesting as well to see how many of these were initiated  or supported by sovereign investors. (e.g., Larry Catá Backer, Sovereign Investing and Markets-Based Transnational Legislative Power: The Norwegian Sovereign Wealth Fund in Global Markets, American U. International Law Revoiew 29:'' (forthcoming 2013)

Matteo Tonello writes

Shareholder Proposal Subjects:

During the first half of 2013, larger companies were far more likely than their smaller counterparts to receive proposals, particularly on executive compensation and social and environmental policy issues. Companies in the S&P 500 index that held meetings during this period received 133 executive compensation-related proposals, representing more than 90 percent of the 144 proposals on the same subject received by Russell 3000 companies. S&P companies received 232 proposals on social and environmental policy (88.5 percent of the 262 submitted at Russell 3000 companies). The proportion decreased to 75.3 percent for governance-related proposals (217 versus 288), presumably due to the large number of those proposals introduced by public pension funds, which often diversify their investment portfolios across a wide range of market capitalizations..

The Chart of the Week series highlights key findings from The Conference Board portfolio of benchmarking reports on corporate governance, proxy voting, and sustainability.

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Shareholder Proposal Subjects by Index; FROM PROXY VOTING ANALYTICS (2009-2013)

During the first half of 2013, larger companies were far more likely than their smaller counterparts to receive proposals, particularly on executive compensation and social and environmental policy issues. Companies in the S&P 500 index that held meetings during this period received 133 executive compensation-related proposals, representing more than 90 percent of the 144 proposals on the same subject received by Russell 3000 companies. S&P companies received 232 proposals on social and environmental policy (88.5 percent of the 262 submitted at Russell 3000 companies). The proportion decreased to 75.3 percent for governance-related proposals (217 versus 288), presumably due to the large number of those proposals introduced by public pension funds, which often diversify their investment portfolios across a wide range of market capitalizations.

Executive compensation proposals were filed in similar proportions by single investors and labor unions, while the highest concentration of proposals related to social and environmental policy issues came from investment advisers, public pension funds, individuals, and religious groups.

Chart 11 [for charts CLICK HERE]
Shareholder Proposal Subject—by Index (2013)
Number of shareholder proposals (percentage of total)

Russell 3000
n=769

Corporate governance, 288 (37.5%)
Executive compensation, 14 4 (18.7 )
Social and environmental policy,  262 (34.1)
Other, 75 (9.8)

 Note: Percentages may not add to 100 due to rounding.
The Conference Board/FactSet, 2013.

S&P 500
n=612

Corporate governance, 217 (35.5%)
Executive compensation, 133 (21.7 )
Social and environmental policy, 232 (37.9)
Other, 30 (4.9)

Note: Percentages may not add to 100 due to rounding.
Source: The Conference Board/FactSet, 2013

Why It Matters. . . 

– While interest in the topic was expected to fade following the presidential election, proposals related to political spending and lobbying made up nearly 40 percent of the social and environmental policy proposals submitted in 2013.
– Following the introduction of mandatory say on pay, shareholders are focusing proposals on specific pay practices such as the elimination of tax gross-ups and golden coffins and the introduction of equity retention periods.