Shareholders of Dutch listed companies have rejected a
record number of resolutions this season of annual general meetings of
shareholders (AGMs). However, there was hardly any discussion on these
controversial resolutions at the AGMs. Due to the corona pandemic, live
interaction between shareholders and executives and supervisory directors was
missing. This is one of the main findings in today’s released Eumedion analysis of the 2020 AGM season.
Eumedion is pleased that thanks to the emergency legislation
for convening virtual-only AGMs the continuity of decision-making at the AGMs
could be guaranteed this year. Consequently, new CEOs could be appointed and
authorisations to issue new shares could be granted. On the other hand, the AGM
could hardly perform its function as a discussion and accountability platform.
Questions had to be submitted in writing in advance of the AGM and were
generally answered briefly by executives and supervisory directors.
Shareholders often had to provide their voting instructions in advance of the
AGM, so that the discussion at the AGM – if any – had no real impact. Eumedion
therefore wonders whether it would not be better in the future to separate the
moment of discussion, accountability and deliberation from the moment of
voting. In this way, the quality of the answers to the shareholders' questions
can still influence voting behaviour. Royal Dutch Shell was the first company
that separated the ‘discussion part’ from the ‘voting part’ of the AGM and many
Eumedion members appreciated it.
Remuneration policy was by far the most controversial topic
this season. 24 out of the 50 resolutions that received significant shareholder
dissent (over 20%) were related to this topic. A record of 13 resolutions to
amend the remuneration policy were rejected or withdrawn by the board at the
start or ahead of the AGM. This was partly due to a much more critical attitude
of institutional investors, who for the first time were also legally obliged to
evaluate the resolutions on "social effects". Another important
reason was that for the first time a 75% AGM voting majority was required to
get the resolutions adopted (instead of a simple majority). This made it easier
for responsible and engaged shareholders to reject an excessive remuneration
The 2020 AGM season by the numbers:
- In total, just over 1,000 resolutions were put
to the vote this season. 50 of these resolutions received significant
shareholder dissent (over 20%). 18 Resolutions were rejected by the AGM and 20 resolutions
were withdrawn at the start or ahead of the AGM. Two proposals could only be
adopted with the help of a "friendly" Trust Office.
- In total 41 virtual-only AGMs were held,
representing 43% of the total number of AGMs held by Dutch listed companies. At
the other AGMs, shareholders were discouraged from attending; between 0 and 9
shareholders were physically present at these AGMs.
- The corona pandemic only slightly reduced the average
level of voter turnout: 72.3% at the AGMs of AEX companies (2019: 73.2%) and
63.3% at the AGMs of AMX companies ( 2019: 65.9%). In particular retail
investors faced challenges with remote voting or were less interested in voting
if they cannot attend the AGM in person.
- The number of female executives and supervisory
directors rose sharply. AEX companies now have an average of 19% female
executives. Last year this number was only 10%. For the first time in history,
more new female than male supervisory directors were appointed in an AGM season
(35 out of 67 newly nominated supervisory directors). All AEX companies now
meet the forthcoming statutory quota of at least one-third female supervisory
directors, with the exception of ABN AMRO Bank.
- Twelve listed companies have now set a deadline for
becoming a ‘carbon neutral’ company. Philips and Signify have set this ambition
by year-end 2020, while Royal Dutch Shell, DSM, AkzoNobel, Boskalis and Vopak strive
for becoming carbon neutral by 2050.