Published in collaboration with The Conference Board, today's just-released Proxy Voting Analytics (2010-2014) uses FactSet Corporate Activism data to analyze more than 2,500 annual general meetings held at Russell 3000 companies between January 1 and June 30, 2014. This analysis shows a fundamental shift in the types of resolutions shareholders submitted to a vote. It also shows that activist investors have become more sophisticated in their use of technology and social media to agitate for corporate change outside of the AGM and that senior management is increasingly likely to implement precatory shareholder proposals on corporate governance that have received majority support.
A few of the report's key findings:
- Shareholder proposal volume was slightly lower this year, with a sharper decline among larger companies as investors focus on new topics and broaden their targets.
- Excess cash on US companies’ balance sheets fueled the growth of the activist hedge fund industry, and the number of resolutions sponsored by hedge funds in 2014 surpassed the annual levels recorded since 2009.
- Shareholder resolutions on social and environmental policy rose to unprecedented levels while some institutional investors dropped governance issues that were a staple of their past activity but never garnered widespread support.
- The rate of withdrawals of shareholder proposals doubled from a few years ago as companies preempt some of the issues by voluntarily implementing their own reforms.
- Shareholder proposals on political spending and lobbying activities skyrocketed this year, with seven receiving support of at least 40 percent of votes cast (compared to two in 2013).
- Observations made in 2013 that hedge funds were starting to set their sights on larger companies appear disputed by numbers for 2014, when a sharp decline in activism campaign volume was recorded among S&P 500 companies.
Based on five years of SEC filings from Russell 3000 and S&P 500 companies, the annual report covers analyzes aggregate data on shareholder proposals, management proposals, and shareholder activism, segmented by market index and industry group. The report is supplemented with an appendix offering detailed recommendations for companies facing situations of shareholder activism.
View the full report from The Conference Board.