The Conference Board Governance Center Blog

Jan
08
2013

The Conference Board Unveils Proxy Voting Analytics

By Melissa Aguilar,  Researcher, Corporate Leadership, The Conference Board

With another proxy season underway, many of the major themes for 2012—the effects of say on pay on shareholder engagement, the introduction of proxy access proposals, and the resurgence of board declassification resolutions—will remain center stage during 2013.

Those issues and other proxy voting trend s are the subject of a new report by The Conference Board in collaboration with FactSet Research Systems Inc. Proxy Voting Analytics (2008-2012) analyzes data on voting by shareholders of U.S. companies that held their annual general meetings (AGMs) in the January 1-June 30 period during the last five years. Aggregate data on shareholder proposals, management proposals, and proxy contests is examined and segmented based on market index (whether the Russell 3000 or the S&P 500) and 20 business industry groups.

The report also provides a comparison of 2012 and 2011 shareholder advisory votes on executive compensation plans. “Generally, year-over-year comparison of voting results proved that say on pay can function as a catalyst to greater company awareness of current compensation issues as well as to more engagement and transparent communication with investors,” says Matteo Tonello, managing director of Corporate Leadership at The Conference Board and the co-author of the report.

Reported results reaffirmed that shareholders are determined to question the rationale for not having all corporate directors face a confidence vote on an annual basis. While interest in board declassification by activist investors had been shown for some time, the volume of proposals increased in 2012, and among the Russell 3000 companies where those proposals went to a vote, shareholder support averaged 80 percent.

During their first year on corporate ballots, two proposals on proxy access received the approval of a majority of shareholders, signaling that there might be room for increasing shareholder support for resolutions that are similar in formulation to Securities and Exchange Commission rules that were vacated by federal courts in 2011.

Notably, proxy access proposals generated more shareholder support than majority voting did in the first year it was proposed by shareholders, according to John Laide, vice president at FactSet. “Majority vote standards to elect directors are now overwhelmingly supported by shareholders and have become a corporate governance best practice,” says Laide. “If proxy access follows a similar trajectory it will have significant implications for shareholder activism and future proxy battles.”

Read the press release here. Download the complete report here.

About the blogger:

Melissa Aguilar, Researcher, Corporate Leadership

Melissa Aguilar, Researcher, Corporate Leadership

Melissa Aguilar is a researcher in the corporate leadership department at The Conference Board in New York. Her research focuses on corporate governance and risk issues, including succession planning, enterprise risk management, and shareholder activism. Aguilar serves as executive editor of Director Notes, a bimonthly online publication published by The Conference Board for corporate board members and business executives that covers issues such as governance, risk, and sustainability. She is also the author of The Conference Board Proxy Voting Fact Sheet and co-author of CEO Succession Practices.

Prior to joining The Conference Board, she reported on compliance and corporate governance issues as a contributor to Compliance Week and Bloomberg Brief Financial Regulation. Aguilar previously held a number of editorial positions at SourceMedia Inc.



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