Following this year’s widespread boardroom disputes, the rise in shareholder activism across Europe is unmistakable. This has been confirmed by an ISS report, which reveals that both voter turnout and protests on pay increased this year to the highest levels since 2008.
The shareholder advisory body surveyed 14 European countries and determined that the average turnout – the percentage of eligible voters who actually cast a ballot at an AGM – had risen by 3.4 percentage points, from 62.5 percent in 2011 to 65.9 percent this year. Turnout was highest in Luxemburg with 74 percent, followed by the UK with 73 percent.
The study reveals that protests on remuneration were most numerous in Belgium, Italy and Spain. These countries have recently introduced legislation that requires shareholders to approve the remuneration policy by an advisory vote. Spain passed a say-on-pay law in 2008, with Belgium and Italy following soon after in 2010.
Predictably, the issues most argued about are salary and share plans, with opposition and abstentions on remuneration rising from 6.5 percent last year to an average of 7.2 percent this year. Share plans were rejected by 9.4 percent of voting shareholders this year, an increase from 8.3 percent last year.
According to the Financial Times, the adoption of the EU Shareholder Rights Directive in 2007, which took until this year to be implemented in all EU member states, has contributed to the recent upsurge in shareholder participation. It also had an impact on the rate of disclosure of voting results, which has risen from 91.4 percent in 2011 to 92.1 percent this year, as well as on the access to vote for non-domestic shareholders.
‘Several markets where it has been more difficult for non-domestic shareholders to vote have eliminated share-blocking systems to comply with the EU Shareholder Rights Directive, driving up turnout. Italy was one of the last of the EU countries [to do this], along with Luxembourg and Belgium,’ says ISS head of European governance Jean-Nicolas Caprasse in the FT.
