Institutional Support for Shareholder Proposals Declines to Record Low, New Report Reveals
The latest ProxyPulse™ Report from Broadridge Financial Solutions reveals a troubling trend in corporate governance. Institutional support for shareholder proposals has experienced a significant decline, hitting an alarming low at just under 25%. This marks the lowest level of institutional backing since 2021. Concurrently, retail investors have seen a minor increase in their support—from 19% to 21%—indicating a narrowing gap in the sentiment between institutional and retail investors, the closest it's been in nine years.
The implications of this decline are profound, as highlighted by Chuck Callan, Senior Vice President of Regulatory Affairs at Broadridge. He noted, "Ongoing legal, regulatory, and legislative changes have impacted corporate governance, which is evidenced by the drop in the number of shareholder proposals and the diminishing support for them." Despite this decline, voting support for directors and say-on-pay initiatives remains robust, demonstrating the continued desire for shareholder voices to be represented in decision-making processes.
Interestingly, the report also shows a steep decrease in the submission of environmental and social proposals. These proposals fell sharply from 166 in 2024 to only 118 this past season, a 29% drop. Notably, the overall shareholder support for these proposals plummeted under 15% of the shares voted, with institutional backing hitting its lowest point in nine years. However, retail investor support has risen slightly, by one percentage point compared to the previous year, and has now exceeded institutional support in this area.
In another notable trend, proposals related to political spending disclosure also underwent changes. The number of these proposals declined significantly, from 46 in 2024 to just 18 in the most recent season. However, this reduction came with increased backing from investors. Retail support for political spending proposal disclosures surged from 18% to 25%, while institutional support rose even more dramatically from 24% to 35%.
The Broadridge ProxyPulse report, which analyzes trends over the past five proxy seasons, serves as a wake-up call for businesses and investors alike. It underscores the shifting dynamics in shareholder engagement and the need for companies to reconsider their approaches to governance and sustainability. Investors are increasingly looking for responsive and responsible management, not just in financial performance but also regarding environmental and social governance.
Broadridge’s insights indicate a strong foundation for enhancing investor experience and promoting more inclusive governance frameworks. "By ensuring companies remain compliant amid ever-changing regulatory requirements and consistently innovating in the proxy space, we can work toward a future of fully democratized and digitized governance," added Callan.
For those interested, the complete report is available for download, offering a comprehensive view of voting trends and investor sentiments in the capital markets. As Broadridge continues to process over 7 billion communications annually, its commitment to enhancing the investor experience and fostering transparency remains unwavering. Broadridge Financial Solutions, based in New York, is a global technology leader pivotal to the operation and enhancement of financial services.
For more information about Broadridge and its services, visit www.broadridge.com.
The implications of this decline are profound, as highlighted by Chuck Callan, Senior Vice President of Regulatory Affairs at Broadridge. He noted, "Ongoing legal, regulatory, and legislative changes have impacted corporate governance, which is evidenced by the drop in the number of shareholder proposals and the diminishing support for them." Despite this decline, voting support for directors and say-on-pay initiatives remains robust, demonstrating the continued desire for shareholder voices to be represented in decision-making processes.
Interestingly, the report also shows a steep decrease in the submission of environmental and social proposals. These proposals fell sharply from 166 in 2024 to only 118 this past season, a 29% drop. Notably, the overall shareholder support for these proposals plummeted under 15% of the shares voted, with institutional backing hitting its lowest point in nine years. However, retail investor support has risen slightly, by one percentage point compared to the previous year, and has now exceeded institutional support in this area.
In another notable trend, proposals related to political spending disclosure also underwent changes. The number of these proposals declined significantly, from 46 in 2024 to just 18 in the most recent season. However, this reduction came with increased backing from investors. Retail support for political spending proposal disclosures surged from 18% to 25%, while institutional support rose even more dramatically from 24% to 35%.
The Broadridge ProxyPulse report, which analyzes trends over the past five proxy seasons, serves as a wake-up call for businesses and investors alike. It underscores the shifting dynamics in shareholder engagement and the need for companies to reconsider their approaches to governance and sustainability. Investors are increasingly looking for responsive and responsible management, not just in financial performance but also regarding environmental and social governance.
Broadridge’s insights indicate a strong foundation for enhancing investor experience and promoting more inclusive governance frameworks. "By ensuring companies remain compliant amid ever-changing regulatory requirements and consistently innovating in the proxy space, we can work toward a future of fully democratized and digitized governance," added Callan.
For those interested, the complete report is available for download, offering a comprehensive view of voting trends and investor sentiments in the capital markets. As Broadridge continues to process over 7 billion communications annually, its commitment to enhancing the investor experience and fostering transparency remains unwavering. Broadridge Financial Solutions, based in New York, is a global technology leader pivotal to the operation and enhancement of financial services.
For more information about Broadridge and its services, visit www.broadridge.com.
Topics Financial Services & Investing）
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