Whilst the Shareholder Meeting Season is for some a long distant event that happened a couple of months ago, some companies are still preparing for their yet to come Shareholder Meeting. Alliance Advisors is keenly observing the voting behaviours and support levels for the various key topics that are put to the Shareholder vote this year and have summarized a few initial observations on Shareholder Meetings that have been held already:
Advisory Vote on Sustainability Report
Following the revision of the Swiss Code of Obligation prior to the 2024 Swiss Shareholder Meeting Season, companies had to adopted the new reporting requirement and if not already practice put their non financial report ( “Sustainability Report”) to the advisory Shareholder vote.
The results so far have been very supportive from the institutional shareholder base so far. It being a new item to vote on, investor guidelines are also still being developed in order to be applied. However, general feedback has been that this is a very welcome and useful additional piece of disclosure that with consistency over time will become a valuable assessment tool for the investor.
UBS Group AG
UBS Group AG ‘s Shareholder Meeting results show a great deal of support for their first shareholder meeting under the combined group. The Remuneration report came under scrutiny by institutional shareholders that were looking for more disclosure rather than discretionary elements taking effect for an award.
We are looking forward to seeing how the enlarged operation will continue to integrate and position itself for the future.
Gidauvan AG
With only a portion of the issued share capital being held by institutional investors, the voting result as published by the company on their website show the clear decline in support for certain director’s re-elections. Citing concerns over insufficient diversity on the overall board of the company, overboarding of individual candidates as well as holding committee members accountable for the perceived shortcomings in the board structure, certain candidates received more than 40% of the votes cast, cast against their re-election. In comparison to just over 32% in 2023. Whilst institutional influence may remain negligent for the securing of the vote outcome, the trend shows that there is not much more room to maneuver and that a pro-active engagement with shareholders together with a robust board refreshment could be advisable.
Nestle AG
Key topics of shareholder dissent at the recent Nestle Shareholder Meeting were the Remuneration Report and the Shareholder Proposal to report on non-financial matters regarding disclosure of sales of healthy versus less healthy foods.
The Compensation Report still lacks disclosure that is now routinely looked for by the largest institutional investors such as:
- Key performance targets under the STI Plan
- Claw-back clause as part of the LTIP
- Disclosure on how progress and level of ambition is assigned to each KPI
Interestingly, the Shareholder Proposal brought forward by ShareAction and Legal & General Investment Management received very little support from the institutional investor base. With only just over 11 % approval rate, and looking at currently available public voting disclosures, only a handful of the larger investor base supported this item, despite it being intended to better align the company strategy with global goals including Sustainable Development Goal 3 and the goals of the Access to Nutrition Initiative.
Alliance Advisors will be evaluating the shareholder voting behaviour and application of voting guidelines for all Shareholder Meetings held in Switzerland in 2024 in the near future. If you would like to receive a copy of our findings including our suggestions on how to tackle any shareholder dissent prior to your next Shareholder Meeting, please enter your details in the form below to register for the report.
