(We’re back with our fourth installment of the AGM voting results, which we’ll continue to provide through June. This week’s covers the voting through May 30th.)
As we reach the end of May, the cadence of new shareholder election data starts to slow, but there are still specific cases that rise to prominence as we sift through how shareholders are thinking. Obviously some shareholder votes are company-specific – we saw our first failed director election vote of the year, with a director at Stericycle falling short of a majority of votes needed to re-elect, with the International Brotherhood of Teamsters conducting a “vote no” campaign against two directors at the firm. However, it’s worth separating these individual votes from broader trends that will come up in every shareholder engagement.
Compensation plan proposals are sorting out at slightly lower results than last year. Ipreo separates compensation plans to those describe exclusively as for executives, as opposed to those with a broader “employee and executive” component; however, they tend to be analyzed in the same way in terms of dilution and appropriate targets. This year, average support for management is about 2.3% lower than the comparable period last year, with two plans (from Wyndham Worldwide and Navient) coming in with only a slight majority of votes in favor of passage, at 56.4% and 54.4%, respectively.
Board structure proposals continue to draw attention – a James McRitchie proposal to declassify the board of Illumina Inc. actually received an overwhelming 84.6% of the vote, in a shareholder base that included major active investors such as Baillie Gifford, Capital Group, Edgewood Management, and Sands Capital (as well as the usual passives of Vanguard / Blackrock / SSGA) each owning over 3% of shares outstanding. Just 10.7% of S&P 500 companies have classified boards (according to Factset) – while this is not a new issue by any sense, shareholders still get an opportunity to express this preference with large cap companies.
See the latest report: S&P 500 AGM Voting Results for 1/1/18 – 5/30/18
5.08.15 report: S&P 500 AGM Voting Results for 1/1/18 – 5/22/18
5.15.08 report: S&P 500 AGM Voting Results for 1/1/18 – 5/15/18
5.08.18 report: S&P 500 AGM Voting Results for 1/1/18 – 5/08/18