This comprehensive report covers trends in stockholder voting at annual meetings in the 2019 proxy season among the technology and life sciences companies included in the Fenwick – Bloomberg Law Silicon Valley 150 List (SV 150) and the public companies included in the Standard & Poor's 100 Index (S&P 100).
In the 2019 proxy season, 143 of the SV 150 companies and 99 of the S&P 100 companies held annual meetings that included voting for the election of directors, ratifying the selection of auditors of the company's financial statements and voting on executive officer compensation ("say-on-pay").
Key Findings Include:
Annual Meeting Participation
- An average of approximately 88.2% of shares of SV 150 companies was represented in person or by proxy at company annual meetings during the 2019 proxy season. However, in addition to the approximately 11.8% not represented, an additional 14.2% were represented via proxy by brokers who did not receive instructions on voting for the bulk of matters for which broker discretionary voting is not permitted. This compares to 12.6% not represented and 15.3% broker non-votes in the S&P 100 in the same period.
- The ranges of representation and voting, though, were somewhat broader in the SV 150 than the S&P 100 (e.g., 55.6% – 98.8% voting in the SV 150, compared to 56.8% – 94.2% voting in the S&P 100).
Director Elections
- For the first time in a number of years, there were no contested elections in the SV 150 or the S&P 100 (compared to one SV 150 company and two of the S&P 100 companies in 2018).
- In the 2019 proxy season, all directors in the SV 150 and S&P 100 received more "for" votes than "against" or "withheld" in uncontested elections (compared to one in the SV 150 that did not and none in the S&P 100 in 2018).
- There were 143 uncontested elections of directors in the SV 150 (and 99 in the S&P 100). Since they were uncontested, election of the board-nominated candidates was generally not in doubt, subject only to any applicable majority voting policy.
Say-on-Pay
- Opposition to named executive officer compensation reached 15% or more of votes cast (ignoring abstentions and broker non-votes) at 20.9% of SV 150 companies (compared to 17.9% of S&P 100 companies). Within those SV 150 companies with relatively lower levels of support, opposition reached 30% or more at 16 companies (of which 11 had opposition of 40% or more, including six companies where opposition exceeded 50%).
Other Proposals Voted On
- Setting aside director elections, say-on-pay (as well as say-on-frequency) and auditor approval voting, stockholders at SV 150 companies were asked to vote on 127 proposals, while stockholders at S&P 100 companies voted on 223 proposals. The difference is primarily driven by the fact that stockholder proposals are primarily a large company phenomenon. There were only three such proposals voted on by stockholders outside of the top 50 companies in the SV 150.
Company Proposals
- Excluding director elections, say-on-pay (as well as say-on-frequency) and auditor approval voting, stockholders at SV 150 companies voted on 75 company-sponsored proposals in the 2019 proxy season, primarily in compensation-related subjects, as well as some governance matters (compared to 38 such proposals at S&P 100 companies).
Stockholder Proposals
- The stockholder-sponsored proposals voted on in the SV 150 generally focused on governance matters or policy issues (this was also true in the S&P 100).
- The average support for stockholder-sponsored proposals was approximately 25.7% at the SV 150 companies (compared to approximately 25.8% at S&P 100 companies).
- The most common topic for stockholder-sponsored proposals in the SV 150 were anti-discrimination/diversity (eight proposals, none of which were successful) and elimination of supermajority (seven proposals, three of which succeeded).
- The most common such topic in the S&P 100 was regarding political/lobbying activities (28 proposals, none of which succeeded).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.