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    ISS-Corporate Forecasts Board Accountability, ESG Pushback as Key Themes for 2024 Proxy Season

    ROCKVILLE, Md. (February 29, 2024) – ISS-Corporate, a leading provider of compensation, governance, cyber risk monitoring, and sustainability offerings to help companies improve shareholder value and reduce risk, today released an analysis of key themes, trends, and notable shareholder proposals expected to shape the 2024 U.S. proxy season. Against a backdrop of high-profile court cases bringing to the forefront corporate governance and sustainability, the report forecasts two main themes dominating the 2024 season: an increased focus on board governance and increasing pressure against corporate consideration of environmental and social (E&S) matters.

    The report forecasts two main themes dominating the 2024 season: an increased focus on board governance and increasing pressure against corporate consideration of environmental and social (E&S) matters.

    Key findings and predictions from the analysis include:

    • The report suggests that board accountability will be in the spotlight in 2024. Shareholder proposals aimed at enhancing board independence and accountability increased dramatically between 2020 and 2023, and early data suggest a continuation of that trend in 2024.
    • Director election support continues to erode, particularly for some senior board members with certain committee responsibilities and ISS-Corporate predicts this trend will accelerate in 2024. Within the Russell 3000, median support levels for non-employee board chairs, lead directors, and nominating and governance committee chairs markedly declined to 94.9 percent in 2023 from 96.8 percent in 2018.
    • Say-on-pay support has also eroded in recent years, and the report suggests that special equity grants likely will be an area of focus for investors in the 2024 season.
    • Emerging data points to a continued increase in so-called counter-ESG proposals based on approximately 350 shareholder proposals tracked by ISS-Corporate as of mid-February with counter-ESG proposals representing more than 13 percent of the total submitted thus far for 2024 shareholder meetings.
    • The report forecasts support levels for E&S proposals will remain flat through the 2024 season after falling significantly in 2023.
    • A growing number of asset managers are offering voting choice to enable their underlying to direct how the votes are cast. As a result, votes cast by a single fund may represent a myriad of opinions and policies.

     

    “The Delaware Chancery Court’s landmark decision regarding Elon Musk’s pay package will serve to put governance firmly back in the spotlight this annual meeting season,” said Jun Frank, Managing Director and Global Head of Compensation & Governance Advisory at ISS-Corporate. “That, coupled with increasing pushback on environmental and social issues, will necessitate that both investors and their portfolio companies carefully navigate these changing dynamics as the U.S. proxy season kicks off.”

    Read ISS-Corporate’s full analysis here.

    ISS-Corporate is a leading provider of robust SaaS and expert advisory services to companies, globally. ISS-Corporate’s datadriven, research-backed Compass platform empowers businesses to understand and shape the signals they send to institutional investors, regulators, lenders, and other key stakeholders. By delivering essential data, tools, and advisory services, ISS-Corporate can help businesses around the world to be more resilient, align with market demands, and proactively manage governance, compensation, sustainability, and cyber risk initiatives. ISS Corporate Solutions, Inc. (“ISSCorporate”) is a wholly owned subsidiary of Institutional Shareholder Services Inc. (“ISS”) and part of the ISS STOXX GmbH group of companies. ISS-Corporate provides advisory services, analytical tools and publications to companies to enable them to improve shareholder value and reduce risk through the adoption of improved corporate governance practices. The ISS STOXX Governance and ESG research teams, which are separate from ISS-Corporate, will not give preferential treatment to, and are under no obligation to support, any proxy proposal of a corporate issuer nor provide a favorable rating, assessment, and/or any other favorable results to a corporate issuer (whether or not that corporate issuer has purchased products or services from ISS Corporate). No statement from an employee of ISS-Corporate should be construed as a guarantee that ISS FOR IMMEDIATE RELEASE STOXX will recommend that its clients vote in favor of any particular proxy proposal or provide a favorable rating, assessment or other favorable result. For more information, please visit https://www.iss-corporate.com

    ISS STOXX GmbH, through its group companies, is a leading provider of comprehensive and data-centric research and technology solutions that help capital market participants identify investment opportunities, detect qualitative and quantitative portfolio company risks, and meet evolving regulatory requirements. With roots dating back to 1985, we today deliver world-class benchmark and custom indices across asset classes and geographies and serve as a premier source of independent corporate governance, sustainability, cyber risk, and fund intelligence research, data, and related offerings. Our products and services give clients the scale and leverage they need to grow their business more effectively and efficiently. ISS STOXX, which is majority owned by Deutsche Börse Group, is comprised of more than 3,800 professionals operating across 30 global locations in 20 countries. Its approximately 5,500 clients include many of the world’s leading institutional investors who turn to ISS STOXX for its objective and varied offerings, as well as companies focused on ESG, cyber, and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS STOXX’s expertise to help them make informed decisions to benefit their stakeholders.