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2022 Shareholder Proposal Round Up

Over 500 environmental and social shareholder proposals have already been filed in 2022, exceeding 2021 levels, according to a comprehensive Alliance Advisors analysis. Several of these have already passed with a majority of shareholder support, including proposals on pay equity and civil rights audits. Highlights of the analysis include:

  • Board Diversity. A very interesting consequence of the strong focus on board diversity is that several investors such as State Street and Vanguard have relaxed their overboarding limits, given the high demand for female and minority directors. ISS and Glass Lewis have both issued specific expectations for board diversity with Glass Lewis requiring 30% women by 2023.

  • Workplace Diversity and Civil Rights Audits. The remarkable success of last year’s campaign to require disclosure of EEO-1 forms (84% of the S&P 100 and 11% of the Russell 1000 now do so) led to far fewer shareholder proposals on that topic in 2022. Instead, there has been “an avalanche” of proposals on racial equity and civil rights audits, with a whopping 55 proposals filed so far and another 24 demanding DEI reports. These proposals received an average of 33% support last year, but several have already passed this year. Expect to see more of these as the year progresses.

  • Unadjusted Pay Gap. Arjuna continues its successful campaign, now enhanced to include raw and adjusted pay gap data across both gender and race, with several more companies joining the ranks of those willing to publish unadjusted figures. A proposal at Disney passed with 59.6% this year.

As the article points out, last fall’s revised SEC guidance made it tougher for companies to have proposals excluded, especially on social issues – this may lead to companies being more willing to negotiate with proponents for a withdrawal on topics like diversity, pay equity, and climate.

Ani Huang

President and CEO, Center On Executive Compensation

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