2024 Austria AGM Season Review – Key Takeaways
For the most important Austrian listed companies (“ATX Prime”), 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.
This meant that we could compare the voting results of 37 companies for the purposes of this report.
Executive Remuneration-Related Items
- For 37 different remuneration reports, ISS recommended 24 times against and Glass Lewis 17 times against them. This also includes 15 times where both Proxy Advisors recommended against the same report. The lowest support of such an item was at 48.5% of the votes cast only, and the average support being 88.7% of the voted shares cast.
- For the 20 different remuneration policies, the situation is similar. ISS recommended to vote against 14 times and Glass Lewis recommended 10 times against the adoption of a new policy. This also includes 9 times where both were against the same report. The lowest support was 47.6% of the votes cast, and the average support 91.1%.
Supervisory Board (Re-)Elections
A total of 69 directors have been (re-)elected to the supervisory board at Austria’s top companies.
- 31 of these 69 candidates were female (=45%). ISS recommended against 18 of these candidates and Glass Lewis four times. In all these four times, also ISS was against. The lowest support was 85.3% of the shares voted and the average support was at 94.3%.
- 38 of these 69 candidates were male (=55%). ISS recommended to vote against them 25 times and Glass Lewis 13 times. In all these 13 times, also ISS was against. The lowest support was 77.4% and the average support was at 93.4%.
Discharges
The discharge voting has an outstanding importance in Austria. First, supervisory board members are not elected on an annual basis. Second, the management board members are appointed, but not elected.
- For the management board discharges, in all cases ISS and Glass Lewis recommended to support the agenda item. The lowest support was at 84.4% and the average support at 95.8%.
- For the supervisory board discharges, in all cases ISS has been in favour, with Glass Lewis against one. The lowest support was at 84.2% and the average support at 94.9%.
Virtual AGMs
A total of 17 companies have renewed their authorization to hold virtual and/or hybrid AGMs.
- Both ISS and Glass Lewis supported them all. The lowest support was at 83.7% and the average support at 95.4%.
- Only one company limited the authorization until 2026, whereas five companies limited it until 2027, 10 companies until 2028 and two companies until 2029.
Interestingly, whereas in neighbouring Germany such related bylaw changes were highly contested, especially if the authorization was for more than two years, in Austria the proxy advisors and investors apply less rigid guidelines.
Decrease of Supervisory Board Size
Three companies asked their shareholders to approve a decrease of their supervisory board.
- In all cases, ISS and Glass Lewis have been in favour, and the support was always at or close to 100%.
Interestingly, our observations for the German market (“MDAX”) have shown three similar authorizations, but with the scope of increasing (not decreasing) the supervisory board size.
- 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%.
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 Austrian 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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