Views
Decoding Proxy Season: Key Insights and Strategies You Need to Know
Understanding proxy season is crucial to corporate governance. This comprehensive article offers key insights, trends, and strategies to help issuers and IR teams prepare, while intermediaries and custodians can also benefit from technology-focused tips.
What is proxy season?
Proxy season describes the time of year when many publicly traded companies hold their annual general meetings to engage with their shareholders. During this period, shareholders receive proxy statements or proxy cards, which contain information on company performance, executive compensation, and proposals for shareholder voting.
Why is proxy season a big deal?
Proxy season is a critical time for investor relations professionals, the board, custodians and investors because it offers a platform to engage with each other and influence voting on key corporate governance issues.
It is also a time when shareholder activism can come into play, with investors pushing for changes in management practices (like compensation, board structure, reporting etc.), corporate policies and general business direction.
When is proxy season?
Knowing when proxy season occurs is key to planning effectively. Most companies hold meetings between April and June, though this varies by region. In the US, UK, and Europe, it falls in spring-summer, while Australia and New Zealand see it later in the year. Meetings take place around June in Japan and April in Singapore.
The 2025 proxy season is anticipated to follow this traditional schedule, but staying informed about any shifts in timing is crucial.
2024 proxy season review – a brief look back
The 2024 season saw key trends emerge: governance proposal support rose to 40%, AI proposals tripled, and most director and compensation proposals gained approval. Despite a rise in anti-ESG proposals, they lacked support.
Proxy season trends that are shaping corporate stewardship
While similar to the 2024 season, let’s examine wider proxy season trends that could shape 2025 meetings and outcomes.
ESG issues (or anti-ESG) will continue to be significant
The ESG vs anti-ESG battle, especially in markets like the US, will continue to be a key agenda in 2025.
Most investors are demanding greater transparency and accountability on ESG matters, and companies that proactively address these concerns are more likely to gain shareholder support.
However, a large number of anti-ESG proposals suggest a greater need for the management to remain focused on shareholder value. IR professionals will benefit from early engagement to better manage these conflicting views.
Shareholder activism – not going away any time soon
Shareholder activism continues to grow, with investors becoming more vocal about their expectations.
The recent Fraser group and Boohoo battle exemplifies this trend and underscores the importance of engaging with shareholders throughout the year, not just during season.
Technological advancements – more value derived everyday
Technology is playing a transformative role in proxy season. Virtual shareholder meetings were just the beginning of how tech firms will be integrated into proxy voting and disclosure processes.
AI and data analytics will be crucial tools to understand your shareholder base and predict voting outcomes or possible proxy battles.
Additionally, digital voting platforms like Proxymity Vote Connect are becoming more common, providing greater visibility and efficiency for issuers, investors and intermediaries due to end-to-end connectivity.
Custodian banks have also been able to deliver better client service thanks to these platforms, as recently highlighted by Pierre Brun from BNP Paribas Securities Services.
New age disclosure solutions, like Proxymity Shareholder Disclosure, will enable better engagement for issuers and IR teams while improving compliance for intermediary banks and brokers.
Pass-through voting solutions will continue to involve more retail investors in these AGMs and EGMs.
How do you prepare for proxy season?
To optimise your approach this proxy season, consider implementing the following strategies:
Develop a comprehensive proxy season checklist
For Issuers and IR Teams:
• Review the company’s annual report and financial statements
• Prepare and file your proxy statements
• Work with agents or a digital proxy voting provider to distribute proxy materials in real-time
• Engage key shareholders early and address their concerns
• Schedule and manage logistics for the annual meeting
• Develop an action plan to tackle activists
For custodians and other intermediaries:
• Review client timelines and entitlements
• Coordinate with issuers or agents to ensure distribution of proper meeting materials
• Move away from legacy systems to new gen digital proxy solutions
• Distribute key dates and voting instructions
• Review regulatory obligations like SRD II
Set up data and technology ahead of the season
Utilise data analytics to gain insights into shareholder behaviour and voting patterns.
Apart from the tools highlighted earlier, having in place a voting analytics solution like Proxymity Vote Insights can provide real-time updates on how investors vote on your meeting’s resolutions, driving more informed engagement.
Enhance shareholder communication and engage early
Effective shareholder communication is crucial during proxy season. Ensure all communications are clear, concise, and transparent.
Provide regular updates on company performance and governance practices to build trust and credibility. Make sure to have open lines of communication ahead of the season.
Leveraging your shareholder database, hold meetings with key investors early to garner support for your resolutions.
Engage with proxy advisory firms
Proxy advisors play a significant role in shaping shareholder voting decisions.
Establishing a strong relationship with these firms can provide valuable insights into their recommendations and expectations. Once again, the earlier, the better.
Frequently asked questions about proxy season
When does proxy season typically start?
In the US, UK, and Europe most companies hold their annual meetings between April and June. In Australia and New Zealand, proxy season is October to November. In Japan, it occurs in June and in Singapore, it happens in April.
What are the key trends for the 2025 proxy season?
Key trends for the 2025 proxy season include a focus on ESG matters, growing shareholder activism and technological advancements in proxy voting processes.
How can technology improve proxy season management?
Technology, like Proxymity, can enable better shareholder communications, real-time voting analytics and improved distribution of proxy materials through digital platforms.
Conclusion
Proxy season is a pivotal time for the custody chain, especially for issuers and IR teams. By understanding timing, trends, and leveraging the right tools, you can drive better meeting outcomes.
As you prepare for the 2025 season, speak with Proxymity experts to understand how our latest solutions can bring better connectivity and visibility during the meeting. Contact us to learn more and get started.