2024 Germany’s MDAX AGM Season Review – Key Takeaways
For the German mid-cap index (“MDAX”) Alliance Advisors has analyzed all available voting results for AGMs held between 1 January 2024 until 31 July 2024, for all cases where also the recommendations from ISS and Glass Lewis were available. Where applicable, we also excluded non-Germany incorporated companies, as the voting guidelines and expectations from investors and proxy advisors can be different.
This meant that we could compare the voting results of 44 companies for the purposes of this report.
Executive Remuneration-Related Items
- For 44 different remuneration reports, ISS was 16 times against (=36%) and Glass Lewis 14 times (=32%) against them. This also includes 10 times where both were against the same report. The lowest support of such an item was at 37.4% only, and the average support 83.7%.
- For the 14 different remuneration policies, ISS was 6 times (=43%) against and Glass Lewis 3 times (=7%) against them. This also includes 3 times where both were against the same report. The lowest support was 46.6%, and the average support 87.3%
Supervisory Board (Re-)Elections
A total of 65 directors have been (re-)elected to the supervisory board.
- 27 of these 65 candidates have been female (=42%). ISS was against them 7 times (=11%) and Glass Lewis two times (=3%). In these two times, also ISS was against. The lowest support was 86.0% and the average support was at 95.7%.
- 38 of these 65 candidates have been male (=58%). ISS was against them 14 times (=22%) and Glass Lewis five times (=8%). In all these five times, also ISS was against. The lowest support was 75.9% and the average support was at 93.3%.
Discharges of Management & Supervisory Board Members
The discharge voting has an outstanding importance in Germany. First, the supervisory board members are not elected on an annual basis. Second, the management board members are appointed, but not elected.
We have separated the analysis for bundled discharge and individual discharge of each board.
- For the bundled management board discharges, for all 33 cases ISS and Glass Lewis have been against one of the items. The lowest support was at 96.9% and the average support at 89.4%.
- For the individual management board discharges, in all 36 cases ISS and Glass Lewis have been against one of the items. The lowest support was at 77.1%% and the average support at 93.3%.
- For the bundled supervisory board discharges, in all 36 cases both ISS and Glass Lewis have been in favour. The lowest support was at 86.1% and the average support at 98.7%.
- For the individual supervisory board discharges, in all 124 cases both ISS and Glass Lewis have been in favour. The lowest support was at 72.9% and the average support at 95.6%.
Virtual AGMs
Only two MDAX companies had a virtual-AGM related item on their agenda.
- In one case, it was the company to ask for a renewal until 2026, which has been supported by ISS and Glass Lewis, with an approval rate of 88.7%.
- In another case it was a shareholder proposal asking to renew the authorization until 2029 but to limit the option for a virtual meeting to very limited circumstances. Having ISS in favour and Glass Lewis against (together with the management) it failed with only 35.7% support.
Authorizations limited up to two years were a common standard in 2023. Therefore, for the 2025 AGM season, it can be expected that many German companies will ask their shareholders to support a renewal of their authorization to hold virtual meetings, too. As already shown in 2023 – and according to our conversations with investors – mainly German and French investors will again oppose such as a matter of principle.
Interestingly, overall, our research for Austria showed investors to be less rigid.
- Only one company limited the authorization until 2026, whereas five companies limited it until 2027, 10 companies until 2028 and two companies until 2029. Both ISS and Glass Lewis supported them all and none of them failed.
Increase of Supervisory Board Size
Three companies asked their shareholders to approve an increase of their supervisory board.
- One company has increased to six, one to seven, one to eight members.
- In all three cases, both ISS and Glass Lewis have been in favour, and the average support was at 98.3%.
Interestingly again from our observations for the Austrian market (“ATX Prime”), we have seen three similar authorizations, but with the scope of decreasing (not increasing) the supervisory board size.
- One company has decreased to six, one to seven, one to eight and one to 12 members.
- In all cases, ISS and Glass Lewis have been in favour, and the support was always at or close to 100%.
What Is Next?
Shareholders are becoming more engaged and vocal, demanding transparency, accountability, and alignment with their expectations on issues like compensation or board diversity. Companies need to adapt by enhancing transparency, demonstrating strong corporate governance, and addressing shareholder concerns to maintain investor support. Boards play a crucial role in this process and are expected to proactively form a relationship with the relevant stewardship teams prior to the next Shareholder Meeting Season.
Whilst some institutional investors will only file their voting behaviour from votes submitted at Shareholder Meetings in 2024 in late Q3 of 2024, we anticipate that the engagement efforts of German corporates will have to address these concerns. The aim needs to be to provide further transparency and explanatory information to prove that the feedback of investors has been heard and incorporated.
If you would like to receive our suggestions on how to tackle your shareholder dissent prior to your next Shareholder Meeting, please contact us.
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