Trends and Updates from the 2024 Proxy Season

The Freshfields’ team reviewed trends and developments for the 2024 proxy season, summarizing the key takeaways and guidance across the following core areas: shareholder proposals; board, director and senior management trends, including diversity; ESG and anti-ESG trends; SEC updates; shareholder activism; executive and director compensation; investor updates; and proxy advisory firm updates.

An overview of the takeaways is outlined below, and the full report can be found here.  We hope this continues to serve as a helpful resource to navigate evolving investor and stakeholder expectations and regulation as companies prepare for the engagement and 2025 proxy seasons.

• The number of shareholder proposals continues to increase.  In 2024, the number of known shareholder proposals exceeded the prior record set in 2023.
• Environmental and social proposals continue to receive low levels of shareholder support, with only three E&S proposals receiving majority support.
• Governance proposals continue to have higher support, with more than double receiving majority support compared to 2023.  While many governance proposals are similar year-over-year, this year there were a significant number of proposals focused on "zombie holdover directors".
• No-action relief is back.  Almost 100 more requests for no-action relief were submitted in 2024 compared to 2023 and the SEC granted relief to nearly double the number from 2023.
• The anti-ESG movement continues to gain momentum.  Although support for proposals remains minuscule, proponents and proposals are increasing, anti-ESG proponents and entities are using notices of exempt solicitation and anti-ESG shareholder engagement trends align with the legislative, political and media anti-ESG pressures.
• Broad socio-economic issues continue to impact the proxy season.  This year labor is a considerable focus: shareholder proposals focus on a myriad of labor-issues, and labor unions have begun to emulate activists with a single-issue proxy contest and proxy solicitation in the 2024 season.
• Investors are in the hot seat and continue to accelerate pass-through voting as they are subject to ESG and anti-ESG pressures.  Investors have publicly left investor coalitions, continue a multi-year trend of failing to support E&S proposals and increasingly face their own proposals on their policies and voting records.
• Executive compensation considerations are expanding beyond say-on-pay and approval for company equity plans.  This year a variety of executive compensation proposals emerged, including one seeking to fix director compensation at $1 absent shareholder approval. 

Read the full report here.