2019 Dutch AGM season: large number of board proposals rejected by shareholders or withdrawn ahead of shareholders meeting


Shareholders of Dutch listed companies are increasingly voting against board proposals. In particular poorly substantiated proposals for exorbitant executive pay packages and proposals that would lead to a "carte blanche" for the board to issue new shares led to shareholder rebellion. This is one of the main findings in today’s released Eumedion analysis of the 2019 AGM season.

This year 14 board resolutions were voted down or withdrawn ahead of shareholders voting, due to concerns over significant shareholder dissent. This number was much higher than in previous years (2018: 5; 2017: 8). At the same time, the number of resolutions that received significant shareholder dissent (over 20%) decreased from 36 in 2017 and 29 in 2018 to 26 in 2019. According to Eumedion, this shows a dichotomy between listed companies that do and do not actively consult shareholders and other stakeholders ahead of the publication of the final proposal. If such consultations are held, the risk of rejecting the proposal or of a high number of dissent votes is much lower. The importance of creating broad support for at least the remuneration policy will only increase in the upcoming period now that the Dutch legislator has determined that companies must take into account the "social acceptance" when drafting a new remuneration policy and that such a proposal needs at least 75% shareholder support. “The 2020 AGM season will be a crucial year for Dutch listed companies, since all listed company must submit the 2019 remuneration report for an advisory vote to the AGM and most will have to renew their remuneration policy following the implementation of the revised EU Shareholder Rights Directive”, according to Eumedion.

Eumedion finds it striking that this AGM season none of the companies that saw one or more proposals rejected issued a statement how the board interprets the voting result and what actions it intends to take to consult shareholders in order to understand the reasons behind the result. Eumedion believes this is a missed opportunity for relationship-building.

Other highlights were:

- Diversity, in particular gender diversity, within the boardroom has become a prominent theme during dialogues between shareholders and companies and at AGMs. Dutch listed companies are showing encouraging signs that they are listening to shareholders and wider concerns about the lack of female executives and supervisory directors. There is now more or less gender balance with regard to new nominations for the Executive and Supervisory Board. The number of Dutch listed companies without any female executives and supervisory directors decreased from 17 to 11. Out of all Dutch AEX and AMX companies, only Flow Traders still has two all-male boards. Mainly as a result of this situation, the proposed re-appoint of Flow Traders’ supervisory director Roger Hodenius, also member of the company’s remuneration and nomination committee, received 20.7% dissent votes (35.7% if all Flow Trader board-related parties are exempted).

- The average number of votes cast at the AGMs of the largest - AEX - companies reached for the sixth year in a row a new record: 73.2% (2018: 72.4%). Also the shareholder participation at the AGMs of the midcap (AMX) companies has regained its upward trend: 65.8% in 2019 versus 64.9% in 2018. These results show the still increasing interest of in particular institutional investors to participate in the decision making process at AGMs and the value they attach to casting their votes.

- The auditor’s reports become more informative and therefore more meaningful for shareholders and other users of annual reports and accounts. A number of auditors expanded their description of the audit scope this year to their company-specific activities in relation to the possible detection of fraud and non-compliance with laws and regulations. The auditor of Altice Europe explicitly warned shareholders on the governance risks at this company.