Proxinvest published its 21st Report on General Meetings and Shareholder Activism. Since its founding in 1995, Proxinvest has never witnessed such a contentious proxy season in France.
A record number of rejected resolutions, an accelerated pace of shareholder activism, the first implementation of a binding vote on remuneration policies, and a significant level of dilution from double voting rights: 2017 represented a milestone for shareholder engagement in France
The number of rejected resolutions gained 52% to reach 85 resolutions in 352 general meetings. Interestingly, resolutions were rejected in more than 10% of companies. Shareholders were mostly concerned with authorizations to issue capital, which comprised 56% of rejected resolutions.
Double voting rights played an instrumental role in the 2017 Proxy Season. Had the one-share/one-vote principle prevailed, an additional 28 resolutions would have been rejected, up from 48 and 32 in 2016 and 2015 respectively. Most alarmingly, among the 14 companies that adopted double voting rights in the SBF 120 Index, the average dilution was a staggering 22% of voting rights; an unfortunate legacy of the Florange Law. Far from their ostensible goal of promoting shareholder loyalty, double voting rights, a privilege denied to holders of bearer shares, have been exploited by large shareholders to control general meetings to the detriment of minority shareholders. Proxinvest and Phitrust have long advocated for eliminating double voting rights and bridging the gap between cash flow rights and voting rights.