London, UK, June 25, 2024 – In the first five months of 2024, the 18 environmental and social (E&S) proposals subject to a vote at European companies have secured 17.9% average support, compared to 6.2%, 11.5% and 15.2% throughout 2021, 2022 and 2023, respectively. This is according to the new Diligent Market Intelligence: Corporate Governance in Europe 2024 report from Diligent.

According to the report, produced in association with White & Case and Alliance Advisors, regulatory developments governing ESG disclosure, like the Corporate Sustainability Reporting Directive (CSRD), are prompting institutional investors to seek enhanced environmental- and human capital-related reporting from portfolio companies.

“Evolving reporting requirements are prompting investors to ensure companies are set up for success and prepared to comply,” said Josh Black, Editor-in-Chief for Diligent Market Intelligence. “At the same time, companies must also remain focused on appropriately incentivizing executives and strengthening company performance.”

A growing number of European companies are also increasing CEO pay in a bid to enhance competitiveness, prompting investors to closely scrutinize "say on pay" plans, while shareholder activists are focusing on value creation opportunities in the U.K. and Germany.

Three themes emerge from the report’s key findings that both boards and investors should have on their radar, including:

Regulatory developments prompt renewed focus on ESG disclosure:

E&S shareholder proposals are seeing greater success, with investors seeking assurance that companies are prepared for CSRD disclosure requirements.
In the first five months of 2024, the 18 E&S proposals subject to a vote secured 17.9% average support, compared to 6.2%, 11.5% and 15.2% throughout 2021, 2022 and 2023, respectively.
Seven of the eight proposals seeking enhanced climate disclosure subject to a vote as of May 31, 2024, were directed toward companies in the energy and financial services sectors.

Competitiveness concerns bolster CEO pay, driving investor pay revolts:

European companies are looking to address a growing pay disparity when compared to U.S. peers, with average CEO realized compensation at CAC 40- and FTSE 250-listed companies increasing by 12% in 2022.
Discerning investors are assessing revised pay plans with a heightened level of scrutiny. European “say on pay” proposals averaged 92.3% support in the first five months of 2024, down from 94% four years prior.

Activists eye opportunities in the UK and Germany:

Cheap stock prices have prompted activists to push for sales at U.K. companies to unlock value, while German conglomerates are facing calls for board refreshment.
Of the six U.K. companies targeted in the first five months of 2024, three (50%) have faced push for sale demands, compared to five (31.3%) and three (23.1%) throughout 2022 and 2023, respectively.

To download the full report click here.

Register here to attend our webinar, European Investor Stewardship: Examining Trends in Activism, ESG and Compensation, examining key takeaways from the report.

About the report

Data from Diligent Market Intelligence’sActivism, Voting, Compensation, Shorts and Governance modules run from January 1, 2024, to May 31, 2024. Further data is available on request, although bespoke analysis may take 48 hours. For more information, please email dmi.press@diligent.com

About Diligent Market Intelligence

Diligent Market Intelligence (DMI) is a market-leading provider of shareholder activism, investor voting, and corporate governance data. Through its web application and data feeds, clients can access the most complete solution for listed company intelligence on the market, with broader and deeper insights than ever before.

About Diligent Diligent is the leading GRC SaaS company, empowering more than 1 million users and 700,000 board members and leaders to make better decisions, faster. The Diligent One Platform helps organizations connect their entire GRC practice — including governance, risk, compliance, audit and ESG — to bring clarity to complex risk, stay ahead of regulatory changes and deliver impactful insights, in one consolidated view. Learn more at diligent.com.

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Media Contact Julia Stoyanov Communications Director, Diligent +1 (604) 669-4225 Jhanbury@diligent.com