As in 2020, the coronavirus
severely affected the format of and discussions at the annual general shareholder
meetings (AGMs) of Dutch listed companies this year. The vast majority of Dutch
AGMs (82%) was held digitally this year. A substantial number of the Dutch
listed companies (41%) responsed the call made in February by shareholder organisations
Eumedion, VBDO and VEB to enable shareholders to raise their questions verbally
at the virtual AGM. But because this facility was often only offered to clients
of the company's ‘house bank’, most institutional investors were unable to make
use of it. As a result, this year too, many shareholders did not have a real
opportunity to hold company boards to account through live Q and A and
discussion. Institutional investors therefore want a return to in-person or -
at most - hybrid AGMs as soon as possible. This is one of the main findings in
today’s released Eumedion analysis of the 2021 AGM season.
The presentations and
(written) questions at the AGMs were dominated by the expected short and long
term impact of the corona pandemic on the company, the impact of climate change
on the company and executive remuneration. As in 2020, executive remuneration
was the most contentious voting item. Nineteen out of the in total 43 resolutions
that received significant shareholder dissent (over 20%) were related to this
topic. Shareholders mainly voted against the remuneration reports. In
particular, disclosures of bonus performance measures, the selection rationale
and an explanation of the outcomes in comparison with the targets set fell
short. This year, by contrast, significantly fewer proposals to amend the executive
remuneration policy were rejected or withdrawn: five compared to thirteen in
2020. Most listed companies that had their remuneration policy rejected in 2020
put forward a more moderate proposal this year. Such a proposal could count on
strong shareholder support.
The 2021 AGM season by the
numbers:
- In total, just over 1,200 resolutions
were put to the vote this season. 43 of these resolutions received significant
shareholder dissent (over 20%). Twelve resolutions were rejected by the AGM and
five resolutions were withdrawn or amended ahead of the AGM. Two proposals
could only be adopted with the help of a "friendly" Trust Office.
- 82% of the AGMs was held entirely
virtual, 4% in a hybrid format and 14% in-person.Of the virtual AGMs, 91% could be followed
live via a video webcast (the remaining 9% offered an audio webcast only). At
45% of the virtual AGMs, shareholders could vote live and at 41% of the virtual
AGMs shareholders were able to raise questions verbally. The majority of AGMs
thus lacked any form of live interaction between shareholders and the company
boards.
- New legislation and reduced short selling
activities resulted in a record number of votes cast at the AGMs of AEX and AMX
companies: an average of 75% and 70.9% respectively (compared to 73.4% and
63.3% in 2020). Only listed companies with a relatively large share of private
investors in the total shareholder base are lagging (far) behind.
- For the second year in a row,
executive remuneration was the most contentious voting item: 73% of the board
proposals rejected by the AGM this year related to the executive remuneration
policy or to the remuneration report, and 43% of all board proposalsthat received
significant shareholder dissent (over 20%) was related to this topic. Around
30% of the Dutch listed companies reduced or cancelled the executive bonus
payments as a result of the corona pandemic. The remaining companies (70%) saw
no reason to intervene in bonus payments as a result of the pandemic.
- The progress in the number of female
executives is slowing down. During this AGM season, 20 new executives were
nominated; only 5 of them were female (25%; in 2020: 37%). Consequently, the
average number of female executives at the AEX companies stagnated at 19%, while
the average number of female executives at the AMX companies even decreased
from 13% in 2020 to 12% in 2021. The picture at the supervisory or
non-executive board level is much more positive. The average number of female
supervisory directors at both the AEX and AMX companies is above the
soon-to-be-required 33%. Nevertheless, 33 Dutch listed companies do not yet
comply with the forthcoming legislation on gender diversity in supervisory or
non-executive boards: 31 because they have too few female supervisory directors
and two because they have too few male supervisory directors (Avantium and
Pegasus Europe). Twelve (small) Dutch listed companies do not yet have a single
woman in their supervisory or non-executive board.
- Partly due to the impact of the
corona pandemic, the average number of supervisory or non-executive board
meetings at AEX-listed companies rose by 20% and at AMX-listed companies by
30%. Several companies established more separate committees within the supervisory
or non-executive board, in particular in the area of sustainability.
- 86% of the Dutch AEX companies and
60% of Dutch AMX companies have committed themselves to achieving certain
climate-related targets. In total, thirteen Dutch listed companies have
committed themselves to having fully climate-neutral operations by 2050 at the
latest. However, it is difficult for shareholders to verify how 'hard' and
credible these commitments are.