As the 2021 proxy season comes to a close, the contentious nature of this year’s season was more intense than predicted and support for shareholder proposals related to climate risk and diversity and inclusion rose sharply.
Voting trends for the S&P 500 say-on-pay proposals break down as follows:
- 386 companies received more than 80% say-on-pay support
- 34 companies received between 50-80% support
- 16 companies failed to receive 50% support
Drug maker Biogen saw shareholder support for its pay-for-performance alignment decline substantially after several challenging years of performance and concern regarding a severance benefit. Meanwhile Activision Blizzard, long targeted by activists for excessive compensation, took the unusual step of delaying the vote on its say-on-pay proposal.
- Biogen (BIIB) has struggled to produce consistent TSR results. In 2020, shareholder support for the proposal declined to 83% but fell to 51% this year. Shareholders expressed concerns about negative TSR and declines in revenue. Additionally, the board waived a requirement to recoup the departing CFO’s cash sign-on bonus and granted him a discretionary cash payment in recognition of the smooth transition to the incoming CFO, which drew fire.
- Activision Blizzard (ATVI) again faced criticism for excessive pay despite strong stock price performance. In 2020, the company received 56% support for its say-on-pay proposal. During the annual meeting on June 14, the company announced it was delaying the 2021 SOP vote until June 21, noting “based on requests from shareholders for additional time…it is in the best interest of shareholders to extend the opportunity for shareholders to vote on this important matter.” The company also announced several changes to the compensation program in response to shareholder concerns. Ultimately, however, the proposal received only 55% support.
