Investor engagement surges as shareholders hold bosses to account on ESG and pay
Shareholder engagement has skyrocketed in the past year as investors piled into annual general meetings (AGMs) to hold bosses to account on issues like ESG and executive pay, new data has revealed.
A record 480,505 shareholders and guests attended AGMs last year, up 70 per cent on 2020 levels, according to data from Lumi, which provides engagement platforms for AGMs.
The first half of 2021 saw AGM attendance double, with investors quizzing bosses with twice as many questions as the previous year.
The firm said engagement had been driven by flexibility, as firms held more meetings throughout the year, and increased demand from shareholders who are keen to scrutinise boards over their performance on issues like ESG.
Kerry Leighton-Bailey, Director of Shareholder Engagement at Lumi said: “We have seen high levels of participation from the retail shareholder group at AGMs, with many Issuers noting the enhanced “quality” of engagement and questions being asked.”
Separate research from investor relations firm Citigate Drewe Rogerson found that engagement had been spurred on by a rise in shareholder activism that was galvanising retail investors to vote against lacklustre ESG performance.
Around one-in-five (21 per cent) organisations reported a rise in engagement with activist investors over the past year, with ESG issues underpinning the boom.
Investor engagement has also been driven by a heightened focus on executive payouts as firms weathered the impact of the pandemic .
More than twice as many FTSE 100 companies faced a shareholder revolt over pay in the last year than in 2020, the Financial Times reported, as investors attacked management teams seen to profiting through the pandemic.
Lumi has predicted that shareholder activism is likely to rear its head throughout this AGMs in 2022 after firms have already faced down a series of high profile skirmishes with investors.
Unilever recently faced calls to set more ambitious health targets in its products from a group of asset managers and WHSmith has faced an investor revolt over executive pay.