Shearman & Sterling LLP 19 | A Review of the 2023 Proxy Season: An E&S Backlash?
Several investors noted that as the number of E&S
proposals increased, their overall quality declined, with
more prescriptive, non-targeted, or repetitive proposals
having been submitted in the 2023 proxy season than
ever before. Reiterating its statement from the 2022
proxy season,
8
BlackRock remarked that in the 2023
proxy season "there was an uptick in the number
of such shareholder proposals that were overly
prescriptive or unduly constraining on management
decision-making. The number of single-issue proposals
where the request made did not have economic merit
also increased. Importantly, many proposals failed to
recognize that companies had already substantively
met their request".
9
It also noted that many of the E&S
proposals it declined to support in 2023 were "over-
reaching, lacking economic merit, or simply redundant,
[and] they were unlikely to help promote long-term
shareholder value."
10
Similarly, Vanguard said that
"many shareholder proposals submitted during the
2023 proxy year went beyond requests for disclosure
and instead sought specific actions from companies,
including changes in company strategy or operations."
In 2023, there was also a notable increase in the
number of shareholder proposals submitted and voted
on and, correspondingly, a decrease in the number of
proposals withdrawn. E&S proposals were the most
likely to be withdrawn of all shareholder proposal
types, with a withdrawal rate of 31% in 2023 compared
to 36% in 2022 but the lowest exclusion rate of 8% in
2023.
11
While this could suggest that more companies
are refusing to negotiate compromises with E&S
proponents (and therefore, are allowing proposals to
go to a vote), it could also reflect the impacts of the
SEC's revised 2021 guidance on Rule 14a-8,
12
which
outlines the basis upon which a company can exclude
a shareholder proposal from its proxy statement.
11
See The Conference Board, "Shareholder Voting Trends (2018-
2022)," https://www.conference-board.org/topics/shareholder-
voting/proxy-trends-2022-executive-summary (September 27,
2022); see also "Proxy Season Review: Navigating ESG Backlash &
Shareholder Proposal Fatigue," https://www.conference-board.org/
publications/2023-proxy-season-review-navigating-ESG-backlash-
and-shareholder-proposal-fatigue (October 18, 2023).
12
See U.S. Securities and Exchange Commission, "Shareholder
Proposals: Staff Legal Bulletin No. 14L," https://www.sec.gov/corpfin/
staff-legal-bulletin-14l-shareholder-proposals? (November 3, 2021).
8
See BlackRock Investment Stewardship, "2022 Climate-Related
Shareholder Proposals More Prescriptive Than 2021," https://www.
blackrock.com/corporate/literature/publication/commentary-bis-
approach-shareholder-proposals.pdf (May 12, 2022).
9
See BlackRock Investment Stewardship, "Overview of the 2022-23
Proxy Voting Year," https://www.blackrock.com/corporate/literature/
publication/2023-investment-stewardshipvoting-spotlight.pdf
(August 23, 2023).
10
See BlackRock Investment Stewardship, "Overview of the 2022-23
Proxy Voting Year," https://www.blackrock.com/corporate/literature/
publication/2023-investment-stewardship-voting-spotlight-summary.
pdf (August 23, 2023).
Source: The Conference Board, Shareholder Voting Trends (2018-
2022) (September 27, 2022), at 12, https://www.conference-board.org/
topics/shareholder-voting/trends-2022-brief-1-environmental-climate-
proposals, and Proxy Season Review: Navigating ESG Backlash &
Shareholder Proposal Fatigue (October 18, 2023), at 3, https://www.
conference-board.org/publications/2023-proxy-season-review-
navigating-ESG-backlash-and-shareholder-proposal-fatigue.
*The data shown above covers companies constituent of the Russell
3000 index for the full year, except for 2023, in which the period
considered was from January 1 through June 30.
2019
2022
2020
2021
Number
% of Total
% of Total No.
Withdrawn
Excluded
Voted
60.5% 443
18.4% 135
149 20.4%
2019
% of Total No.
Withdrawn
Excluded
Voted
62.9% 464
16.9% 125
148 20.1%
2020
% of Total No.
Withdrawn
Excluded
Voted
60.7% 480
17.8% 141
168 21.2%
2021
% of Total No.
Withdrawn
Excluded
Voted
68.3% 555
8.7% 71
187 23%
2022
% of Total No.
Withdrawn
Excluded
Voted
70% 586
9% 76
170 20%
2023
% of Total No.
Withdrawn
Excluded
Voted
60.5% 443
18.4% 135
149 20.4%
% of Total No.
Withdrawn
Excluded
Voted
62.9% 464
16.9% 125
148 20.1%
2020
% of Total No.
Withdrawn
Excluded
Voted
60.7% 480
17.8% 141
168 21.2%
2021
% of Total No.
Withdrawn
Excluded
Voted
68.3% 555
8.7% 71
187 23%
2022
% of Total No.
Withdrawn
Excluded
Voted
70% 586
9% 76
170 20%
2023
% of Total No.
Withdrawn
Excluded
Voted
60.5% 443
18.4% 135
149 20.4%
2019
% of Total No.
Withdrawn
Excluded
Voted
62.9% 464
16.9% 125
148 20.1%
2020
% of Total No.
Withdrawn
Excluded
Voted
60.7% 480
17.8% 141
168 21.2%
2021
% of Total No.
Withdrawn
Excluded
Voted
68.3% 555
8.7% 71
187 23%
2022
% of Total No.
Withdrawn
Excluded
Voted
70% 586
9% 76
170 20%
2023
% of Total No.
Withdrawn
Excluded
Voted
60.5% 443
18.4% 135
149 20.4%
2019
% of Total No.
Withdrawn
Excluded
Voted
62.9% 464
16.9% 125
148 20.1%
2020
% of Total No.
Withdrawn
Excluded
Voted
60.7% 480
17.8% 141
168 21.2%
2021
% of Total No.
Withdrawn
Excluded
Voted
68.3% 555
8.7% 71
187 23%
2022
% of Total No.
Withdrawn
Excluded
Voted
70% 586
9% 76
170 20%
2023
Voted
Excluded
Withdrawn
Voted
Excluded
Withdrawn
Voted
Excluded
Withdrawn
Voted
Excluded
Withdrawn
2023
Withdrawn
149 20.4%
% of Total No.
Withdrawn
Excluded
Voted
62.9% 464
16.9% 125
148 20.1%
2020
% of Total No.
Withdrawn
Excluded
Voted
60.7% 480
17.8% 141
168 21.2%
2021
% of Total No.
Withdrawn
Excluded
Voted
68.3% 555
8.7% 71
187 23%
2022
% of Total No.
Withdrawn
Excluded
Voted
70% 586
9% 76
170 20%
2023
Voted
Excluded
Withdrawn
All Shareholder Proposals Voted,
Excluded and Withdrawn
