The Freshfields’ team reviewed trends and developments for the 2024 proxy season, summarizing the key takeaways and guidance across the following core areas: shareholder proposals; board, director and senior management trends, including diversity; ESG and anti-ESG trends; SEC updates; shareholder activism; executive and director compensation; investor updates; and proxy advisory firm updates.
An overview of the takeaways is outlined below, and the full report can be found here. We hope this continues to serve as a helpful resource to navigate evolving investor and stakeholder expectations and regulation as companies prepare for the engagement and 2025 proxy seasons.
- The number of shareholder proposals continues to increase. In 2024, the number of known shareholder proposals exceeded the prior record set in 2023.
- Environmental and social proposals continue to receive low levels of shareholder support, with only three E&S proposals receiving majority support.
- Governance proposals continue to have higher support, with more than double receiving majority support compared to 2023. While many governance proposals are similar year-over-year, this year there were a significant number of proposals focused on "zombie holdover directors".
- No-action relief is back. Almost 100 more requests for no-action relief were submitted in 2024 compared to 2023 and the SEC granted relief to nearly double the number from 2023.
- The anti-ESG movement continues to gain momentum. Although support for proposals remains minuscule, proponents and proposals are increasing, anti-ESG proponents and entities are using notices of exempt solicitation and anti-ESG shareholder engagement trends align with the legislative, political and media anti-ESG pressures.
- Broad socio-economic issues continue to impact the proxy season. This year labor is a considerable focus: shareholder proposals focus on a myriad of labor-issues, and labor unions have begun to emulate activists with a single-issue proxy contest and proxy solicitation in the 2024 season.
- Investors are in the hot seat and continue to accelerate pass-through voting as they are subject to ESG and anti-ESG pressures. Investors have publicly left investor coalitions, continue a multi-year trend of failing to support E&S proposals and increasingly face their own proposals on their policies and voting records.
- Executive compensation considerations are expanding beyond say-on-pay and approval for company equity plans. This year a variety of executive compensation proposals emerged, including one seeking to fix director compensation at $1 absent shareholder approval.
