Know Who is Coming to the Party and How They Will Behave: The Evolving and Increasingly Complicated Annual Meeting Vote

February 2022
Region: Americas

As 2022 annual meetings are approaching for many public companies, the composition of their stockholder base has become increasingly important for companies to evaluate ahead of their stockholder vote. In the 2020 proxy season based on a survey of over 3,500 public companies, institutional investors accounted for 71% of total share ownership and voted 92% of the shares that they own, while retail investors accounted for 29% of total share ownership and only voted 28% of the shares they own. How institutional investors make voting decisions and the lack of participation by retail investors can dramatically affect the outcome of director elections and proposals acted upon at stockholder meetings. Accordingly, to provide a greater understanding as to what results to expect at stockholder meetings, senior executives of public companies should routinely track the composition of their stockholder base, as well as historical voting results in order to be in a position to identify areas where additional efforts can be made to increase participation at stockholder meetings and proactively address issues well before they occur.