Demand for ESG investments may be growing in the U.S., but U.S.-based companies are among the least focused on corporate governance, according to Allianz Global Investors.
The asset manager, with headquarters in Germany and 25 offices around the world, just introduced a proxy voting tool to increase awareness about the importance of corporate governance, disclosing in real time the firm’s proxy votes, including its rationale for opposing resolutions or abstaining from voting, as well as the results of votes at thousands of companies around the world.
“Obtaining these insights will help bridge the gap in global disparity and promote a consistent global approach to ESG integration,” according to a company statement.
The tool reveals that the firm opposed 35% of proposals presented at shareholder meetings in the U.S. Only proposals presented in Japan garnered more negative votes — 45%. In comparison, the firm voted against just 13% of proposals in Germany and 6% in the U.K.
AllianzGI, which has roughly $610 billion in assets under management, opposed 45% of compensation votes in the U.S. and 31% of director-related proposals. It cited “weak alignment between pay and performance, insufficient transparency of Key Performance Indicators (KPIs) and targets and excessive dilution for investors from share-based incentive plans” for its no votes on compensation.
“U.S. companies have a long way to go in this space,” said Eugenia Unanyants-Jackson, head of ESG research at AllianzGI, in a statement.
Many U.S. companies also fell short on board-related issues, according to AllianzGI. The firm voted against 31% of director-related proposals in the U.S. due to “long tenure of nonexecutive directors” and “insufficient attention paid” to succession planning and adding new board members. AllianzGlobal noted it prefers “a clear separation” between the roles of chair and CEO to avoid concentration of power at the top.
“U.S. companies need to take investors’ concerns, especially in ESG context, seriously, and I would expect many to start adapting to globally rising stands,” said Jeff Parker, chief investment officer, U.S. equity, in a statement.
He added that AllianzGlobal will “step up its engagement with issuers” where its “analysts and portfolio managers discern a weak connection between a company’s strategic objectives, business value drivers and business practices.”
AllianzGI voted on 83,488 proposals from management and shareholders at 7,961 shareholder meetings in 2017, including 529 shareholder proposals in the U.S. It voted against at least one agenda item at 68% of all shareholder meetings and opposed 24% of all resolutions.
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