Are Top Investors Listening To Proxy Advisors On Pay?

Are Top Investors Listening To Proxy Advisors On Pay?

New research from Proxy Insight demonstrates significant divergence when proxy advisers recommend against Say on Pay

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Large investors are not following the recommendations on executive compensation set out by Proxy Voting Advisers (”PVA”), a study by data company Proxy Insight has found.

Proxy Insight analyzed voting on Advisory Say on Pay (”SoP”) resolutions in the US and UK in 2015 and 2016 for 10 of the largest institutional investors and compared each vote to the recommendations from ISS and Glass Lewis. While voting by top investors correlated with ISS 90% of the time and Glass Lewis 83% of the time for all SoP resolutions, the link is drastically reduced for votes where ISS and/or Glass Lewis recommend against a SoP proposal.

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Correlation between Top Investor Voting and PVA recommendations on SoP resolutions in UK & US

Say on Pay

In aggregate, the 10 investors matched lSS on only 51.4% of recommendations to vote against management on SoP in 2016, and 29.5% of Glass Lewis’. ln each case, the level of opposition was sharply reduced compared to the year before.

The picture is even more noteworthy when both ISS and Glass Lewis recommended voting Against management. Since 2015, the top investors only voted Against 61.896 of SoP resolutions where both ISS and Glass Lewis recommended against.

Commenting on the analysis, Proxy Insight Managing Director, Nick Dawson remarked: “Not only does the data provide a more realistic measure of the influence of Proxy Advisors, which is often overblown, but it also suggests increasing reluctance from investors to oppose management on the perennial issue of compensation.”

The breakdown for the 10 investors is as follows:

Voting on advisory SoP in UK 81 US by 10 largest investors 2015 and 2016

Say on Pay

About Proxy Insight

Founded in 2013 by Nick Dawson and Nick Arnott, Proxy Insight provides the most comprehensive global information source on proxy voting, detailing the voting activity at shareholder meetings for over 25,000 global issuers. In addition, the proxy voting guidelines of top investors are covered in over 1,000 Corporate Governance profiles. A free trial of the database and a monthly newsletter subscription is available on request. If you would like more information about this topic, please contact Nick Dawson at 44410120 7788 7772 or email

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