The increase in shareholder activity in the Spanish market continues

2016年11月23日

Sixth report on "Corporate Governance and Institutional Investors," prepared by Cuatrecasas and Georgeson
Sixth report on "Corporate Governance and Institutional Investors," prepared by Cuatrecasas and Georgeson

Cuatrecasas and Georgeson presented the sixth "Corporate Governance and Institutional Investors" report in Madrid. It analyzes the participation and voting trends followed in the general shareholders meetings of Ibex-35 companies in 2016, and notes aspects that institutional investors and proxy advisers consider crucial for the 2017 shareholders meeting season. 

The 2016 shareholders meeting season is characterized by an increase in shareholder activity. The many occasions in which active institutional investors have played a central role in the US and British markets are now reflected in the rest of the European market, particularly in Spain. 

In 2016, some hedge funds have mobilized a company's free float to dismiss part of their boards of directors. Likewise, many foreign institutional investors have put greater pressure on Spanish listed companies in the 2016 shareholders meeting season, resulting in non-approval of some points in the agenda of several Ibex 35 companies.

This has also been a year in which listed Spanish companies have consolidated changes in view of the legislative and governance reforms that have come into force in recent years in the Spanish market, including the new Spanish Companies Act and the Good Governance Code. Although these reforms have helped align Spanish companies' corporate practices with international standards, there is still a way to go. 

According to the report, in the 2016 shareholders meeting season, the nomination, re-election or ratification of 31 women were put to vote—7 directors more than in 2015. With regard to women, ISS issued a positive recommendation for 94% of these 31 proposals. With regard to men, there were 108 nominations, 70% of which received favorable recommendations from ISS. 

Both in the Ibex 35 and in the official stock market, the average number of votes against the nomination, re-election or ratification of board members was greater for men than it was for women, and both increased over the figures from 2015. 

The recommendations for companies for the coming year focus on reviewing and adapting internal corporate documents, procedures and internal protocols for action to the latest developments in (i) the reform of the market abuse regulation, resulting in the adoption of a new common framework; and (ii) the reforms of transparency and post-hiring systems.

The main development in the report is the inclusion of the official Spanish stock market Top 40, selected by volume of capitalization. The boards of directors of the Ibex 35 companies have also been examined, including aspects that most concern institutional investors and proxy advisors. Finally, it includes three new chapters of particular interest for Spanish issuers concerning the impact of the new Audit Act, evaluation of the board of directors, and management of retail shareholders in an ordinary/extraordinary general shareholders meeting.  

Relevant points:

IBEX-35 

  • There was a slight decrease in average attendance quorum, which dropped from 68.31% in 2015 to 67.63% in 2016.  
  • In the 2016 shareholders meeting season, the nomination, re-election or ratification of 31 women were put to vote—7 directors more than in 2015. With regard to women, ISS issued a positive recommendation for 94% of these 31 proposals. With regard to men, there were 108 nominations, 70% of which received favorable recommendations from ISS. 
  • The average number of votes against the nomination, re-election or ratification of board members was greater for men than it was for women, and both increased over the figures from 2015. 
  • Twelve companies voted in their shareholders meetings on whether to approve their remuneration policies. For the first time in the history of Ibex-35, a company's remuneration policy was not approved by its shareholders meeting.

 OFFICIAL STOCK MARKET

  • The average attendance quorum of the official Spanish stock market Top 40 increased from 66.39% in 2015 to 68.60% in 2016.  
  • In the 2016 shareholders meeting season, the nomination, re-election or ratification of 24 women were put to vote—3 directors more than in 2015. 
  • The average number of votes against the nomination, re-election or ratification of board members was greater for men than it was for women, although the average number of votes against board members decreased slightly. 
  • In 2016, 11 official stock market companies put their remuneration policies to vote in an ordinary shareholders meeting. The percentage of unfavorable voting recommendations from the ISS decreased from the 2015 shareholders meeting season, dropping from 37% unfavorable recommendations in 2015 to 18% in 2016.

 

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