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Shareholders most likely to contest executive pay resolutions during European AGMs in 2023, says Georgeson

During the 2023 AGM season, European shareholders primarily challenged executive pay resolutions, reveals Georgeson’s Annual European AGM Season Review.

In seven key markets, they found 36.1% of such resolutions contested, mirroring the 2022 figure of 37.1%.

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LONDON, UNITED KINGDOM: Shareholders in European companies were most likely to contest resolutions related to executive pay during the 2023 AGM season, according to global shareholder engagement firm Georgeson.

In its annual 2023 European AGM Season Review, Georgeson analysed proxy voting data from annual general meetings (AGMs) in seven European markets (the UK, the Netherlands, Germany, Spain, France, Switzerland and Italy).

The report found that more than a third (36.1%) of resolutions relating to executive pay were contested (defined as attracting 10% or more negative votes) — similar to the proportion during the 2022 season (37.1%).

However, within the category of executive pay, the report found that the proportion of resolutions relating to remuneration reports that were contested by shareholders rose to 42.9% from last year’s 39.4%, while the proportion of resolutions on remuneration policy that were contested declined more significantly to 29.2% from 34.8%.

The proportion of director election resolutions that were contested increased slightly to 11.7% from 11.2% in 2022.

By contrast, the proportion of share issuance resolutions that were contested declined to 13.8% from the previous year (14.5%).

AGM season

The majority of listed companies have already started contemplating their 2023 AGMs, and these AGMs are predominantly scheduled to take place between September and November 2023.

The Georgeson’s report also highlighted the impact of an ‘against’ recommendation from proxy advisors ISS and Glass Lewis, with the majority of company resolutions that received shareholder opposition also receiving ‘against’ recommendations from the advisors.

Domenic Brancati, Global COO of Georgeson, said: “Although the numbers show that shareholders in European companies continue to perceive a misalignment between compensation and shareholder interest, they seem to be taking issue with the way policies are implemented, not how they are structured.

“Director elections also remain in focus, as shareholders continue to use their votes to express dissatisfaction about specific matters such as board diversity and climate change.

“Our work elsewhere in the world tells us that the increase in the portion of disputed director election resolutions is a global trend and underlines the need for companies and boards to actively engage with their shareholders.”

European corporations navigate evolving ‘Say on Climate’ landscape amid heightened investor focus

The 2023 AGM season also marked the third year that European companies have experienced ‘Say on Climate’ resolutions.

24 European companies presented voluntary Say on Climate resolutions: a decrease from the previous year (36), but twice as many than in 2021 (12).

The report noted that companies in the UK (FTSE 350) and France (SBF 120) contributed the majority (17) of Say on Climate resolutions in the 2023 season. Companies in Germany and Portugal introduced their first Say on Climate resolutions this year.

Daniele Vitale, Head of ESG in UK/Europe at Georgeson, said: “Several companies transitioned to a three-year Say on Climate resolution cycle, which may have contributed to the decline in resolutions this proxy season.

“Investors have also conveyed their intention to cast votes against directors they perceive as failing to disclose, manage or oversee climate risk.

“The decline in Say on Climate proposals may indicate that companies are exercising caution because of this heightened investor scrutiny.”

Contrasting corporate governance dynamics

German DAX companies experienced the highest share of contested director elections in 2023 (18.7%). UK FTSE 100 companies saw the lowest share of contested resolutions (3.2%).

Switzerland SMI companies saw the largest share of contested remuneration report resolutions (68.4%). Despite a 5.2% annual increase in the proportion of contested remuneration reports, the UK remained the market with the lowest share of contested resolutions of this type (20.2%).

Spanish IBEX 35 companies saw the highest share of contested remuneration policies (47.4%), followed closely by French CAC 40 companies (45.2%). Whilst only one of the nine remuneration policies (11.1%) put forward at DAX companies in Germany was contested.

 

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Business

Times Bookstores to close after nearly four decades in Singapore

Times Bookstores will cease operations in Singapore after nearly four decades, with its final outlet at Cold Storage Jelita closing on 22 September 2024. The closure is seen as being attributed to high rents, low sales, and rising operational costs, reflecting challenges faced by physical bookstores in Singapore.

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16 September 2024

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Times Bookstores will end its operations in Singapore after nearly 40 years, as its last remaining outlet at Cold Storage Jelita on Holland Road is set to close on 22 September 2024.

In a farewell statement posted on Instagram on 16 September, the English book retailer, established in 1978, invited customers to visit the store one final time. “Our happily ever after has finally come,” the post read. “It is with both a heavy heart and a sense of fulfilment that we announce the closure of Times Bookstores.”

The closure of Times Bookstores has been anticipated for several years. The company, owned by regional consumer group Fraser and Neave Limited, closed its branches in Plaza Singapura and Waterway Point in February 2024.

The shutdowns triggered a discussion in Singapore’s literary community about how to better support bookstores.

Struggles Facing Book Retailers

Times Bookstores has been affected by increasing rent, low sales, and rising operational costs. The Covid-19 pandemic exacerbated its challenges, with the business quietly closing outlets at Marina Square and Paragon in 2021.

A key warning came in 2019 when the retailer closed its 8,000 sq ft Centrepoint branch, once one of Singapore’s largest bookstores.

These closures reflect a broader struggle for physical bookstores in Singapore. Rising rent, higher goods and services taxes (GST), and increasing printing costs have driven book prices up, making it difficult for traditional retailers to compete.

Popular bookstore also shut its Marine Parade outlet on 18 June 2023, citing similar reasons, while Books Kinokuniya closed its JEM branch on 9 May 2022 due to slow sales and rental costs.

Future of Singapore’s Bookstores

Following the closure of Times, few large bookstore chains remain in Singapore. Books Kinokuniya, the largest bookstore in Singapore, continues to operate its flagship store at Takashimaya Shopping Centre.

According to a spokesperson from Toshin Development Singapore, cited by the Straits Times, Kinokuniya remains a key tenant, though no specific renewal dates were disclosed. The spokesperson added that Kinokuniya continues to engage with the landlord regularly to appeal to patrons and remain in trend.

Although Times Bookstores will no longer have physical stores in Singapore, its book distribution business, which supplies books from international and local publishers to other retailers, continues to operate.

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ST Telemedia Global Data Centres reinforces commitment to Digital India with US$3.2 billion investment

ST Telemedia Global Data Centres (STT GDC) is investing US$3.2B to expand its data centre capacity in India by 550MW, tripling its IT load. The move supports India’s growing digital economy and aligns with PM Modi’s Digital India vision, discussed during his recent visit to Singapore.

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6 September 2024

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ST Telemedia Global Data Centres (STT GDC), a leading data centre colocation services provider headquartered in Singapore, has announced a major investment of US$3.2 billion (INR 26,000 crores) to significantly expand its data centre capacity in India.

This investment will add 550MW of data centre capacity over the next 5-6 years, nearly tripling the Temasek-backed company’s IT load capacity to meet the increasing demands of India’s rapidly growing digital economy.

The expansion is set to support the surge in data consumption, cloud computing, digital transformation, and the adoption of artificial intelligence (AI) applications across India. STT GDC, which already holds a 28% market share in India by revenue, views this move as a reflection of its confidence in the country’s digital infrastructure needs and the broader vision of Digital India.

“India’s digital economy is growing at almost three times the overall GDP growth rate and is expected to reach US$1 trillion by 2027-2028,” said Bruno Lopez, President and Group CEO of STT GDC.

“As we celebrate our 10th anniversary, this ambitious expansion underscores our commitment to Digital India, and we are confident in our ability to contribute to its long-term success.”

STT GDC India, majority-owned by STT GDC in partnership with Tata Communications Ltd, currently operates 28 data centres across 10 cities with a total capacity of over 318MW.

It serves approximately 1,000 enterprise clients, including many Fortune 500 companies. STT GDC India has also been recognized as a Great Place to Work for five consecutive years and is ranked among the Best Places to Work in Asia.

The announcement follows STT GDC’s participation in a Business Roundtable with Indian Prime Minister Narendra Modi on 5 September 2024, hosted by the Singapore Business Federation.

This strategic engagement further emphasizes STT GDC’s commitment to supporting India’s digital transformation through long-term investment and collaboration.

Prime Minister Modi’s visit to Singapore resulted in various agreements across key sectors, including a healthcare cooperation agreement between India and Singapore to collaborate on healthcare delivery, medical research, and digital health solutions.

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