The Advisors' Blog

Part 1 of Sullivan & Cromwell’s annual Proxy Season Review shares some helpful details on the nature and outcome of compensation-related shareholder proposals in the 2025 proxy season, noting that they “continue to be difficult to exclude and unlikely to be withdrawn.”

Consistent with H1 2024, over 75% of all compensation submissions reached a vote, the highest proportion across all categories.

As Liz has shared, support is up, but the story isn’t super clear-cut — partly due to the opposing forces of “traditional” proposals versus “anti-ESG” and significant changes this year in proposals related to ESG-linked performance measures.

No proposals passed. Overall, average shareholder support increased slightly from 14% to 17%.

Not counting proposals from “anti-ESG” proponents, which averaged 1% shareholder support and constituted 14% of proposals in this category (vs. 5% in H1 2024), support for compensation proposals increased significantly (from 15% in H1 2024 to 29% in H1 2025).

Last year, we saw for the first time proposals from “anti-ESG” proponents to rescind or reevaluate ESG-linked incentives. There were three such proposals in H1 2024, and the focus was on GHG emissions.

This year, “anti-ESG” proponents were responsible for all ESG-linked compensation proposals. The proposals focused on narrowing or eliminating DEI goals in executive pay incentives . . . These proposals averaged 2% votes cast, consistent with overall shareholder support for proposals from “anti-ESG” proponents.

Voting outcomes for clawback-related proposals also moved against the general trend of increasing support for compensation-related shareholder proposals.

Following the SEC’s adoption of its mandatory clawback rule in October 2022, we saw a sharp increase in clawback proposals last proxy season. Generally, these proposals demanded that companies go beyond mandatory clawback requirements in their corporate clawback policies . . .

This proxy season, the number of submitted clawback proposals remained fairly level with H1 2024 . . . These proposals achieved significantly lower shareholder support (averaging 7% of votes cast vs. 17% in H1 2024). Similar to last proxy season, none passed.

I’m looking forward to a deep dive on the interesting 2025 shareholder proposal season at our October “Proxy Disclosure & 22nd Annual Executive Compensation Conferences.” Join us in Las Vegas on October 21st & 22nd – right before NASPP’s annual conference in the same location – or virtually, if you can’t attend in person, so you don’t miss any of our practical agenda. Sign up online or reach out to our team at info@ccrcorp.com or 1.800.737.1271.

– Meredith Ervine