A new report on U.S. public company annual shareholder meetings in the first half shows that retail and institutional investors differ on social, environmental, political spending disclosure and proxy access proposals, as well as on how actively they engage in the proxy voting process.
The report, released Tuesday by Broadridge Financial Solutions and PwC’s Governance Insights Center, was based on an analysis of 4,090 companies’ shareholder meetings and on Broadridge’s processing of shares held in street name.
“A new theme emerged over the last few proxy seasons that shows a divergence between how institutional and retail investors view certain topics,” Chuck Callan, senior vice president for regulatory affairs at Broadridge Financial Solutions, said in a statement.
“This divergence suggests companies would be wise to participate broadly with all shareholders.”
According to the analysis, institutional ownership of public company shares dipped to 70% from 71% in 2017, while retail ownership increased to 30% from 29% last year. Institutional shareholder voting participation remained high this proxy season at 91%. Retail shareholder participation declined a percentage point to 28%.
“The increase in shareholder support for ESG-related proposals is particularly notable,” Paul DeNicola, a principal at PwC’s Governance Insights Center, said in the statement.
In the first half, social and environmental proposals were the largest category of shareholder proposals on proxy ballots, with institutional investors more supportive than retail ones, a consistent trend since 2014, according to the analysis.