2022 Shareholder Proposals Break the Record – Again

If the levels of shareholder proposals observed so far in 2022 continue, it will be another record-breaking year, according to a new Georgeson report. The study found that a total of 924 proposals have been submitted so far, significantly higher than this time last year. Georgeson estimates that as many as 621 proposals could go to a vote this year – an extremely high number. Other highlights of the survey include:

• 286 proposals have been voted to date, including 30 environmental, 107 social and 149 governance proposals.
  
  
  • So far, the pass rate for each category is 20% environmental, 9% social and 19% governance.
    
    
  • Several passed for the first time, such as proposals on racial equity audits, sexual harassment and pay equity.
    
    
  • However, with such a large number of proposals, many extremely aggressive (such as seeking explicit targets on Scope 3 emissions), large investor support may be reduced.
    
    
• Coordination among proponents may be increasing, with well-known advocacy groups partnering with each other on ESG issues. This may be a way to get around new rules that prohibit filing more than one proposal per company at a time.
  
  
• “Conservative” proposals, often critical of ESG initiatives, have doubled from 26 in 2021 to 52 so far in 2022. This is reflective of increased animosity among Republican lawmakers toward ESG and “woke” investors and companies in general. However, support for these remains low.
  
  
• DEI issues have generated 50 proposals so far, with half of them being withdrawn after successful negotiation with companies. Average support for those that go to a vote has been 36%.
  
  
  • New topics this year include requesting disclosure of recruitment, retention, and promotion information specifically addressing diverse employee populations.
    
    
  • Racial equity audit proposals continue to increase, along with risks related to sexual harassment and mandatory arbitration.

The report above was issued as of late May and will be updated after June 30, since hundreds of proposals remain pending.