As we lurch toward the end of the year, it’s a good time to take stock of our lives. But also, it’s kind of nifty to compare where we are with shareholder proposals compared to a decade ago. This 13-page report from ISS provides this trend data.
Here are my top 10 takeaways from the trends:
- Governance proposals used to be the most common. Governance and compensation topics represented the largest portion of proposals up until the mid-2010s, but their volume has decreased over the past 10 years.
- Big growth in E&S proposals. Proposals related to environmental and social topics accounted for 62% of the total in 2024, up from 44% a decade earlier.
- Anti-ESG proposals drive growth in E&S proposals. The increase in volume of E&S proposals in the past two years is primarily due to the higher prevalence of “anti-ESG” proposals – as those reached a record number of 108 in 2024.
- Shareholder proposals withdrawn less frequently. After the percentage of withdrawn proposals increased in the 2010s, since 2021, the percentage of withdrawn proposals has steadily declined, reaching 31% of submitted proposals in the year through June 2024.
- Parties more willing to negotiate out E&S proposals compared to governance proposals. Nearly 70% of governance and compensation proposals went to final vote across the decade, compared to 51% for E&S proposals – indicating a limited willingness among parties to resolve an issue through negotiation and less success for companies in blocking governance and compensation proposals.
- Climate proposals’ volume is high but engagement is nuanced. The volume of voted environmental proposals remains at historically high levels, with 97 and 82 proposals going to a vote in 2023 and 2024, respectively. However, engagement around these topics is becoming more nuanced, as target companies exhibit more mature environmental management programs and more advanced climate disclosures.
- Support for governance proposals remains steady. The number of governance and compensation proposals voted upon – along with their support levels – have been relatively stable over the years, though both have trended downward. During the decade, 2015 saw the highest number of proposals voted, with more than half gaining more than 30% of votes cast and roughly a quarter of them passing.
- Number of governance proposals declines but good governance practices increase. Both the volume of and support level for governance and compensation proposals declined since 2015, but there was a consistent and steady enhancement in corporate governance practices. Among S&P 500 companies, which are the target of most shareholder proposals, those granting proxy access rights increased by more than 50 percentage points, from 33% in 2016 to 85% in 2024.
- Climate disclosure on the rise. Sustainability disclosures and practices have also evolved considerably in the past five years. Larger gaps in disclosures are found among mid- and small-capitalization firms, but the same trends toward greater disclosure are prevalent across companies of all sizes.
- Economic relevance matters for support. When it comes to investor support for shareholder proposals, two factors have remained constant over the decades: the extent to which the investment community recognizes the economic and business relevance of the topic in question and whether companies sufficiently address the associated economic risk. Economic relevance remains the most important determining factor for investor support of shareholder proposals.
Authored by
Broc Romanek