2024 Proxy Season Review: U.S. Director Elections & Governance

Below are key takeaways from ISS’ recently released 2024 Proxy Season Review – US Director Elections & Governance. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Knowledge Center and its Library tab and to corporate subscribers by logging into Compass then selecting Governance and the Governance Library or Governance Exchange tab.

• Investor dissent against directors declines again: For the second consecutive year, the number of directors who failed to receive majority support declined. The proportion of Russell 3000 Index directors who received less than 80 percent support also declined and has returned to pre-pandemic levels.
• More proponents utilize Vote No Campaigns against directors, though overall fewer companies were targeted: A new high of 14 individuals or groups filed Vote No Campaigns against directors in the first half of 2024. However, the total of 15 companies targeted was lower than in 2023 as certain meetings were targeted by multiple proponents.
• Concerns regarding board responsiveness and poison pills appear to be a significant factor in directors receiving less-than-majority support: A perceived lack of responsiveness to governance related concerns continued to appear to be a significant driver of low director support. Cited concerns regarding poison pill adoptions increased as an apparent significant driver.
• Shareholder proposals regarding the elimination of supermajority vote requirements dominated: Proponents focused their efforts on shareholder proposals regarding the elimination of supermajority vote requirements to amend company governing documents. The 31 majority supported proposals on the topic is greater than the number of majority supported governance shareholder proposals in all of 2023.
• SPACs continue to face challenges: The volume of Special Purpose Acquisition Companies seeking shareholder approval for an initial business combination or to extend the time provided to find a suitable merger party declined significantly year-over-year. Proposed Nasdaq listing rules may expedite delisting of ‘zombie’ SPACs.

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