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Diversity, pay equity and sustainability emerge as key proxy themes — Ernst & Young report

Board diversity, gender pay equity and environmental sustainability emerged as key themes this proxy season, said a 2017 proxy season review from Ernst & Young's Center for Board Matters.

While proxy access proposals remained the most submitted proposal type this year with 157 proposals submitted, social- and environmental-related proposals accounted for the "largest category of proposals submitted, at 49% of the total, up from 41% in 2016 and 43% in 2015, according to the report.

Just more than half of the 55 investors with whom EY spoke ahead of this year's proxy season said they considered diversity — particularly gender diversity — a board priority in 2017, the report indicated. Shareholder proposals requesting that companies report on and increase their board diversity were also among the top shareholder proposals filed this year, the report said.

Gender pay equity also came into the spotlight this proxy season, with nearly 30 high-profile companies facing shareholder proposals requesting that they report on the pay gap between male and female employees and their plans to close those gaps. About half of those proposals were withdrawn due to companies' agreements with filers ahead of their annual meetings.

Another board priority identified by nearly 18 of the 55 investors surveyed by EY ahead of the 2017 proxy season was climate change. Shareholder support for climate-risk reporting proposals rose to 43% in 2017 (through June 2), up from 7% in 2011. At Exxon Mobil and Occidental Petroleum, climate-risk reporting proposals received more than 50% support this year.

Among the report's other findings (data through June 2):

  • Half of the more than 100 companies that received proxy access proposals this year agreed to enact a proxy access bylaw;
  • Average director support among shareholders was 96% in 2017, in line with 2016; 18 out of the 13,065 directors nominated failed to get majority support in 2017;
  • Average say-on-pay support from shareholders was 93% in 2017, up from 91% in 2016; 16 out of the 1,731 say-on-pay proposals failed to pass in 2017.