2023-07-10 17:18:19
The wealth manager raised its rate of opposition to the proposals to 37%, from 33% previously.
At the 2023 general meetings, BNP Paribas Asset Management (“BNPP AM”) continued to implement its ambitious voting policy, with an average opposition rate of 37%, all resolutions combined. Constantly increasing for several years (33% in 2022), this opposition testifies to one of the strictest approaches in the industry, and is accompanied by a strategy of dialogue with companies throughout the year.
BNPP AM rejected 55% of resolutions relating to executive compensation
Executive compensation levels are the issue most contested by BNPP AM, with more than one out of two resolutions rejected. BNPP AM notes that the transparency of compensation practices has evolved in a positive way, and the integration of ESG performance criteria is becoming widespread. Nevertheless, BNPP AM continues to see the allocation of variable compensation not subject to performance conditions and a sometimes excessive catch-up effect compared to 2022 – marked by the drop in compensation due to the impacts of the pandemic – is observed. Executive compensation plans should be aligned with the company’s long-term performance and include relevant and demanding extra-financial objectives.
broad support for shareholder resolutions on environmental and social issues
The number of resolutions relating to corporate climate strategy has fallen sharply: BNPP AM voted on 19 resolutions of this type in 2023, compared to 40 in 2022. This decrease in “Say on Climate” submitted to the vote is explained by various factors . On the one hand, several companies have opted for a vote every three years and on the other hand, this is a practice only developed in a few European markets (in France and the United Kingdom in particular). With regard to its analysis grid, BNPP AM opposed more than half of these resolutions, and observes a crystallization of climate issues around scope 3. In addition, BNPP AM significantly supports shareholder resolutions dealing with environmental (88%) and social (96%) issues that improve business performance.
This year, BNPP AM has strengthened its voting policy by increasing the minimum required thresholds of women on boards of directors: 35% in Europe and North America and 20% in Latin America, Asia and the Middle East. In accordance with its policy, BNPP AM opposed the election of male directors when these requirements were not met, leading to a significant increase in its opposition to this category of resolutions (48% in 2023 compared to 36% in 2022). Convinced that investors have a crucial role to play in advancing the feminization of decision-making bodies, BNPP AM thus expressed its position through the vote by rejecting nearly half of the resolutions relating to the election of directors.
In line with its adherence to the Climate Action 100+ initiative and its “Net Zero” roadmap, BNPP AM expects companies to set an ambition to achieve net zero emissions no later than 2050, underpinned by credible decarbonization strategies and milestones. In terms of biodiversity, BNPP AM requires them to assess and report on their main impacts and dependencies on nature, starting with companies from high-impact sectors, with priority on deforestation and related issues. at the water. These requirements, if they are not respected, lead to the rejection of ordinary resolutions such as the re-election of the board of directors, the discharge or the approval of the accounts. BNPP AM opposed more than 1,000 resolutions for these reasons.
Michael Herskovich, Head of Voting and Governance at BNP Paribas Asset Management, comments: “During the first half of the year, BNPP AM voted at more than 1,600 general meetings around the world. Voting is an important part of the dialogue with the companies in which we invest on behalf of our clients and is an integral part of our management processes. This is why it is essential to preserve this highlight of shareholder democracy, where a dialogue is established between managers, individual shareholders and institutional investors. We advocate hybrid general meetings with identical rights for those who vote remotely and on site.”
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