Whoa, hold the phone! Recent data has spilled the beans, and it seems like the big cheeses across Europe might have to tighten their belts. You see, more and more European shareholders are giving a big thumbs down to the fat paychecks of top dogs in companies. Why? Well, these investors aren’t too pleased with how these corporations are tackling green and social matters.
In the 2023 chatter-fest of annual meetings, a whopping 42.9% of pay reports got a side-eye from investors in seven countries. That’s the highest side-eye level in, like, half a decade, according to the folks over at Georgeson, a company that’s all about shareholder engagement.
Daniele Vitale, who’s steering the ship for Georgeson in the UK and Europe, had a little chinwag with Reuters. He said shareholders, kind of starved of ways to voice their eco and social concerns, are using these pay reports to holler back. And get this, at least 10% of votes need to shout “Nay!” for a vote to be called “contested.” No small potatoes, huh?
Vitale added, “There’s some buzz going around that certain companies are trying to play it smooth, using green and social goals in their pay to, you know, make life a tad easier for the suits.”
And the plot thickens! Shareholders are now pushing companies to get serious about things like chopping down on greenhouse gas. In the contest of who’s most miffed about executive pay, Switzerland took home the gold medal with a staggering 68.4% contested votes. The Brits, on the other hand, were a bit more chill but are slowly warming up to the idea.
But here’s the real kicker: even the bigwigs in asset management, like BlackRock and State Street, might spice things up. They’re considering letting the little guys have a bigger say, and these folks might sing a different tune than the usual institutional crowd.
Now, don’t get things twisted. While the contested votes on pay policies dipped a smidge to 29.2% from 34.8% in the previous year, there’s a difference between pay “reports” and pay “policies.” The former’s like a yearly check-in, while the latter’s the rulebook.
Interestingly, directors aren’t off the hook either. There’s a tiny bump in contested director elections, but many still walk on eggshells about voting against them. Too confrontational, they say. But as green and social worries mount, that might just be a-changing!
Lastly, Georgeson threw in a nugget about the “Say on Climate” votes. These allow shareholders to have a chitchat about a company’s climate game plan. The count fell to 24 this year, but hey, it’s still a jump from 12 a couple of years back. So, there’s that silver lining!
To sum it up, folks, Europe’s got a whole lot of money talk, and it’s about to get louder! Stay tuned.
