AGM analysis
28.06.2024 SWIPRA Newsletter - Swiss AGM Season 2023/24 SWIPRA Newsletter Read More

Observations from the Swiss AGM Season 2024 and 10 years of say on pay

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Zurich, 27th June 2024 – The 2024 Swiss AGM season marks the 10th anniversary of shareholders' “Say on Pay” in Switzerland (“Minder Initiative”). SWIPRA’s analysis reveals a record level of shareholder AGAINST votes on compensation items. Ever since, shareholders have been requesting more transparency on variable pay, recently especially ESG bonus incentives. Such elements are widely used by now, but rarely explained.

And with gender representation on the board increasingly on track, but global challenges growing, shareholders’ focus shifts to other diversity aspects. Boards must demonstrate command over business-relevant skills and experiences to meet strategic challenges and cope with ever more distinct stakeholder expectations. This transparency is often not provided yet.

While 2024 shareholder votes on non-financial reports were overwhelmingly in favor, such an outcome cannot be taken for granted for future AGMs. Companies are increasingly under observation by shareholders and other key stakeholders to act in line with their ambitious goals and have now become even more accountable in their sustainability efforts.


Previous years

SWIPRA AGM Analysis 2023: Newsletter

SWIPRA AGM Analysis 2022: Newsletter

SWIPRA AGM Analysis 2021: Newsletter

SWIPRA AGM Analysis 2020: Newsletter

SWIPRA AGM Analysis 2019: Newsletter

SWIPRA AGM Analysis 2018: Newsletter

SWIPRA AGM Analysis 2017: Newsletter

SWIPRA AGM Analysis 2016: Newsletter

 

21.06.2023 SWIPRA Newsletter - SWIPRA AGM Analysis 2023 SWIPRA Newsletter Read More

Observations from the Swiss AGM Season 2023: Focus on reputation

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Zurich, June 21st, 2023 – In the 2023 Swiss AGM season, boards were again confronted with higher expectations from their stakeholders and faced more criticsm from their shareholders. Also, proxy advisors have started to take a more nuanced view at boards. Consequently, board chairs and board committee chairs were held accountable for issues identified within their respective responsibilities.

Compensation amounts were increasingly scrutinized, not only because of increased executive pay packages, but also due to widening gaps between management and employee pay levels. The inclusion of ESG incentives in management pay plans increased again, but the related targets and resulting payout remained mostly unexplained to external observers.

75% of companies deal with the ESG topic in the full board, while only 25% have formed a specific sustainability committee. ESG efforts are most often reported according to the GRI standard (over 80%), few according to TCFD. Slightly more than half of the SPI100 companies include their non-financial ESG information as part of their annual report and approximately 40% have some form of external verification on it.

The average female representation on boards of the 100 largest Swiss companies has for the first time crossed the 30% threshold.


Previous years

SWIPRA AGM Analysis 2022: Newsletter

SWIPRA AGM Analysis 2021: Newsletter

SWIPRA AGM Analysis 2020: Newsletter

SWIPRA AGM Analysis 2019: Newsletter

SWIPRA AGM Analysis 2018: Newsletter

SWIPRA AGM Analysis 2017: Newsletter

SWIPRA AGM Analysis 2016: Newsletter

 

30.06.2022 SWIPRA Newsletter - Swiss AGM Season 2022 SWIPRA Newsletter Read More

Learnings form the Swiss AGM Season 2022:
More women directors, higher management compensation, unexplained ESG compensation criteria and more pressure on boards

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Zurich, June 30th, 2022 – Elections of board members account again for the majority (67%) of the most contested agenda items during the Swiss AGM Season 2022. The focus was particularly on directors’ individual roles, such as board or committee chairs. Nomination committee chairs of companies with fewer than 30% women board members received more than twice as many AGAINST votes. This concerns 5 SMI (2021:11) and 51 (2021: 64) non-SMI companies. The average female board representation reached 28.5% for SPI100 companies (34.4% in SMI companies, breaking the 30% hurdle for the first time, and 27.0% in non-SMI companies). CEO compensation levels increased by 27.3% in SPI100 companies on average, driven by higher bonus payments, whereas the multiple of CEO to average employee pay (“Pay ratio”) increased from 24.4x to 29.9x. The fraction of SPI100 companies including ESG-indicators in executive compensation increased from 24% in 2021 to 47%, but these criteria remain unexplained in close to 60% of the cases. Globally, investors’ and proxy advisors’ scrutiny in assessing sustainability reports or policies increased, leading to levels of AGAINST votes more than twice as high as in previous years. Past AGM outcomes may thus be a bad predictor for coming sustainability votes in Switzerland. More Non-SMI companies reported in line with the GRI (62%, up from 52%) and CDP standards (30%, up from 14%), while TCFD only gained followers amongst SMI companies (85%, up from 65%). The consultation process on the Federal Council's ordinance to introduce TCFD as a mandatory standard for climate reporting is still ongoing. However, there is apparently little support for the TCFD standard amongst non-SMI companies.


Previous years

SWIPRA AGM Analysis 2021: Newsletter

SWIPRA AGM Analysis 2020: Newsletter

SWIPRA AGM Analysis 2019: Newsletter

SWIPRA AGM Analysis 2018: Newsletter

SWIPRA AGM Analysis 2017: Newsletter

SWIPRA AGM Analysis 2016: Newsletter

 

24.06.2021 SWIPRA Newsletter - Swiss AGM Season 2021 SWIPRA Newsletter Read More

Swiss AGM Season 2021: Critical shareholders looking for more say

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Zurich, June 24, 2021 - Shareholders becoming more activist on environmental and social issues, requesting a vote on non-financial matters, discussions about the right AGM format, proxy advisors’ recommendations with less impact on the voting behavior of large shareholders, compensation decisions not to be based on financial indicators alone, and diversity expectations that are increasingly influencing board elections: The lessons learned from the 2021 AGM season will keep investors and companies busy for a while. And the COVID year further illustrated the importance of a good corporate governance framework, what it all really includes, and how governance can shape corporate reputation.


Previous years

SWIPRA AGM Analysis 2020: Newsletter

SWIPRA AGM Analysis 2019: Newsletter

SWIPRA AGM Analysis 2018: Newsletter

SWIPRA AGM Analysis 2017: Newsletter

SWIPRA AGM Analysis 2016: Newsletter

 

18.06.2020 SWIPRA AGM Analysis 2020 SWIPRA AGM Analysis Read More

Swiss AGM Season 2019/2020: Active shareholders despite Corona-Lockdown

Zurich, 18 June 2020 – Increasing voting participation despite non-physical annual general meetings, proxy advisors with considerable influence on minority shareholders, corporate social responsibility even more in focus due to the Corona crisis, most critical votes again in Board elections, and distinct shareholder criticism on compensation at SMI and non-SMI companies. These are the main findings of the analysis of the general meetings of the 100 largest Swiss listed companies in the period between July 2019 and June 2020 conducted by SWIPRA Services.

Previous years

SWIPRA AGM Analysis 2019: Newsletter

SWIPRA AGM Analysis 2018: Newsletter

SWIPRA AGM Analysis 2017: Newsletter

SWIPRA AGM Analysis 2016: Newsletter

20.06.2019 SWIPRA AGM Analysis 2019 SWIPRA AGM Analysis Read More

Swiss AGM Season 2018/2019: Shareholders and Proxy Advisors assess Board members more critically

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For the first time, the most critical board elections received more votes against than the most critical compensation items. In the 10% most contested elections to the board of directors, the median proportion of against votes rose to over 20%. Shareholders voted against the election of the nominated board members mainly out of concerns about their independence, followed by doubts about the expected availability of the designated directors. Minority shareholders in companies with an anchor shareholder voted more negatively than shareholders in broadly held companies, especially in the most critical elections to the board, which are very important for minority shareholders. The increased focus of shareholders on board elections, which continue to be judged frequently on the basis of proxy advisor recommendations, increased the influence of proxy advisors, above all ISS. The diversity of the members of the board increased again: Boards became more international and more female. The proportion of newly elected women on boards of Swiss companies reached a new high. The votes on the remuneration report were less critical this season. This is largely due to improved disclosure and adjustments in the compensation systems by companies, rather than a diminishing attention on the part of investors. The latter keep the pressure high: if a company does not react to a compensation-related concern, the median of votes against compensation reports quickly rises to 30% and more.

These are some of the key findings of SWIPRA Services' analysis of the AGMs of the 100 largest listed Swiss companies between July 2018 and June 2019.


Previous years

SWIPRA AGM Analysis 2018: Newsletter

SWIPRA AGM Analysis 2017: Newsletter

SWIPRA AGM Analysis 2016: Newsletter

03.07.2018 SWIPRA AGM Analysis 2018 SWIPRA AGM Analysis Read More

SWISS ANNUAL GENERAL MEETINGS 2017/2018: LESS CONTROVERSIAL?

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Zurich, July 3, 2018  - In this proxy season, fewer annual general meetings (AGM) were subject to a controversial public debate than in the past years. Yet, the SWIPRA AGM Analysis shows that voting results overall had the same level of dissent as the previous year. In addition, several new developments could be observed:

  • For the first time since the introduction of the Ordinance against Excessive Compensation, the influence of proxy advisor recommendations on AGM results has decreased. Institutional shareholders no longer follow proxy advisors’ voting recommendations uncritically and increasingly base their voting decisions also on their own governance and voting policies, making their voting behavior less predictable for companies.
  • Influential institutional investors increasingly use a multiyear view when taking their voting decisions. They make careful use of advisory and binding votes to guide proactively the development of companies’ governance framework or to respond retrospectively to deficits. In this AGM season, shareholder dissent with compensation-related agenda items increased again for the most controversial companies.
  • In an international perspective, compensation reports of Swiss issuers continue to receive significantly more AGAINST votes than their peers in the UK or the US.
  • Minority shareholders of companies with an anchor shareholder are significantly more critical than shareholders of widely-held companies.
  • Shareholders’ voting behavior as well as proxy advisor recommendations continue to show a clear preference for female board members and issuers keep increasing the fraction of women on their boards of directors.
  • Shareholder interest in AGM participation remains high: in this AGM season, the average AGM participation rate reached 70% in the SPI100 companies.
16.06.2017 SWIPRA AGM Analysis 2017 SWIPRA AGM Analysis Read More
Annual general meetings (AGM) 2017 were characterized by an increasing opposition to compensation-related agenda items. The high level of criticism regarding compensation is to some extent a Swiss phenomenon as compensation reports were seen much more critical in Switzerland than in comparable foreign markets. This is due to the still widely spread standardized view of corporate governance, predominantly affecting smaller companies. They faced significantly higher against votes than larger companies. Proxy advisors also became increasingly critical, and a growing number of prominent, publicly discussed cases were sometimes difficult to objectively reconcile. The actual voting outcomes at the AGMs 2017 were ultimately much less critical than one could have initially expected. Shareholders still seem to have a generally high level of trust in their boards.

The press release of the SWIPRA AGM Analysis 2017 can be found here.

A presentation with graphs and further results can be found here.

 

21.06.2016 SWIPRA AGM Analysis 2016 SWIPRA AGM Analysis Read More
The press release of the SWIPRA AGM Analysis 2016 can be found here.
A presentation with graphs and further results can be found here.
24.07.2015 Newsletter – Swiss AGM Season 2015 SWIPRA Newsletter Read More

SWIPRA analyzed the results of the AGMs held so far of the 100 largest Swiss companies contained in the SPI®. Key findings relate to topics such as management compensation, shareholder representation as well as influence and philosophy of proxy advisors.

For a summary of the findings as well as graphs of the empirical analysis klick here.