Shareholder opposition to board-sponsored resolutions fell sharply at FTSE 100 companies this year, resulting in record-breaking investor approvals.

For the first time in more than a decade, all management-sponsored resolutions at FTSE 100 companies received approval during the 2024 annual general meeting season, which spanned 1 July 2023 to 30 June 2024.

Despite this remarkable support for management resolutions, more than half (55) of the FTSE 100 companies received at least one contested resolution, defined as receiving more than 10% shareholder opposition.

The number of contested resolutions across the FTSE 100 dropped to 99 during the 2024 AGM season, a 20% decline compared with 2023 (124) and 2022 (125). This reduction coincided with the significant decrease in ‘against’ recommendations from proxy advisers ISS and Glass Lewis in 2024.

Proxy advisers significantly influence proposal outcomes, and there is a clear correlation between negative (or positive) recommendations from the two most influential proxy advisers and levels of shareholder support.

Director elections saw a 50% reduction in contested votes this AGM season: 26 compared with 46 in 2022. Of the 1,000-plus director election resolutions put forward across the index in 2024, ISS opposed only three, the lowest number of ‘against’ recommendations in at least a decade. Conversely, Glass Lewis opposed 11 director elections, a slight increase from the 9 in 2023.

The tale of remuneration-related resolutions

Shareholder opposition to remuneration-related resolutions also saw a sharp decline this year. In contrast to the 20% of contested remuneration reports in 2023, only a proportional 7% faced 10% or more shareholder opposition. Notably, this is the lowest share of contested remuneration reports—which companies must submit annually across FTSE 100 companies—in at least 10 years.

Proxy advisers were also more supportive of remuneration reports this year. Across the index, ISS and Glass Lewis recommended against only two and four remuneration reports, respectively compared with 9 and 11 in 2023.

The number of remuneration policy resolutions declined in 2024, with only a third of FTSE 100 companies putting forth a resolution. The proportion of contested remuneration policy resolutions dropped from 14.3% in 2023 to 12.1% this year. It is important to note that such resolutions require shareholder approval only every third year. Two companies saw significant shareholder opposition (more than 20%) but still received enough support, resulting in approved resolutions by shareholders in both cases.

It is worth noting that each remuneration report or policy resolution proposed across the FTSE 100 during the 2024 AGM season was specific to that company and its strategy. The reasons why investors choose to support or oppose a remuneration proposal are similarly unique to a particular resolution and investor.

As a result, identifying a single reason for the significant drop in negative recommendations from proxy advisers and contested resolutions by investors across the entire FTSE 100 is challenging.

Factors at play

There are, however, three possible factors that likely contributed to the considerable decline of contested resolutions focused on remuneration across the index this year:

1. Companies significantly enhanced and improved their engagement with shareholders, resulting in better compliance with guidelines and expectations from institutional investors and proxy advisers.

2. Proxy advisers and investors may have taken a more restrained approach to voting at the UK AGMs on specific topics. For example, some companies and investors have raised concerns about the pay gap disparity between UK and US companies, which has garnered attention from the media in recent years. This discrepancy likely poses a challenge for UK-listed companies in attracting and retaining talent. Recognising the importance of executive talent retention and appealing to a broader talent pool, investors may have taken a more tolerant approach to supporting remuneration-related resolutions.

3. The market value of the FTSE 100 index increased more during the 2024 AGM season than during the previous two AGM seasons, with most companies across the index experiencing a strong ‘total shareholder return’ performance. Investors and proxy advisers tend to focus more on how executives are rewarded according to their pay-for-performance guidelines. Therefore, shareholders’ concerns about remuneration outcomes are less likely to be raised when the company’s performance is strong.

Share issuance

In 2024, nearly half (47.5%) of contested resolutions related to share issuance authorities, compared with only 16% during the 2022 AGM season. This increase was due to companies seeking higher levels of share issuance authorities, which were allowed under the new Financial Reporting Council’s Pre-Emption Group’s revised ‘Statement of Principles’ introduced in November 2023.

The new principles double the number of issued share capital (up to 20%) UK-listed companies can request approval for, but some investors are not supportive of this change. These proposals require 75% support from shareholders via a special resolution.

The increase in contested share issuance resolutions in 2023 and 2024 highlights just how shareholder opposition to other resolution types has declined during the 2024 AGM season. Excluding the share issuance resolution, the number of contested resolutions across the FTSE 100 decreased by approximately 50%, from 105 in 2022 to 52 in 2024.

Given this year’s investor support for (and resulting drop in opposition trends on) topics such as remuneration and director elections, we may witness new proxy voting trends emerging in the FTSE 100. Results from the 2025 proxy season will tell us if these trends are set to remain or were an anomaly. Companies that continue to engage shareholders effectively and continuously will likely fare better in the forthcoming proxy season.

Kevin O’Neill is a corporate governance analyst at shareholder advisory firm Georgeson.