As companies and investors expand into global markets, the boardroom challenges start to look increasingly similar. One of the best times to evaluate global governance trends is during proxy season when major issues or shareholder proposals are put before investors.
In this special Europen edition of Inside America’s Boardrooms, host TK Kerstetter is joined by Aniel Mahabier, CEO of CGLytics, which is a leading provider of corporate governance analytics and solutions. Mahabier shares key takeaways from the 2018 FTSE 100 proxy season and draws implications for the broader European markets as well: What are the key themes heading into the 2019 proxy season? What kinds of pressure are European boards facing related to shareholder activism, board diversity and refreshment?
According to CGLytics’ 2018 FTSE 100 Proxy Season Review, the number of votes opposing director re-elections doubled in the 2018 proxy season, mostly due to overboarding concerns. Executive compensation was another sensitive proxy season issue in 2018, as roughly one-third of FTSE 100 companies continue to show pay-for-performance misalignment on a one-year and three-year basis.
One of the trends that we see is shareholder activism taking a bigger role in the European market. You have US activists very much focused on the Europen market…You also see institutional investors taking a more passive-activist role and employing some of the techniques being [used] by activists. A lot of the focus is around board refreshment and finding the right candidates to create a better balance within the board.
— Aniel Mahabier, CEO of CGLytics
“Another trend that we saw through our data was a lot of focus around [whether] metrics were sustainable and socially responsible,” said Mahabier, citing the recent controversy around the FTSE 100 company Shell for its CEO pay package. “As a result of that, we now see a sustainability and environmental metric built into the CEO compensation plan.”
For more insights from CGLytics, download the full report.