An Update on the 2022 Proxy Voting Season

Stewardship of our clients’ investments is fundamental to Amberwave’s jobs, security & growth (JSG) investing strategy. We have developed a unique proxy voting policy that is engineered to ensure that our clients’ investments are voted in a way that is designed to support U.S. jobs, security & growth.

As the 2022 proxy season comes to a close, here are some of the key observations we’re seeing in the market:

  • The number of shareholder proposals continues to rise. There were nearly 600 shareholder proposals filed in 2022, a significant increase over recent years. We expect the number of shareholder proposals to continue to increase in the coming years, largely as a result of the regulatory backdrop. Typically, shareholder proposals that deal with a company’s ordinary business operations can be excluded from proxy voting based on the principle that the resolution of “ordinary business matters” should be handled by management and the board of directors rather than shareholders at an annual meeting. However, in November 2021, the U.S. Securities and Exchange Commission (SEC) overhauled its guidance on shareholder proposals to make it easier for shareholder proposals that arguably impinge on “ordinary business matters” to make it to a vote.
  • Environmental, social and governance proposals (ESG) are becoming more extreme. The SEC’s recent change in guidance also reinforced the acceptability of shareholder proposals that focus on “a significant social policy.” This has perhaps contributed to the increasing aggressiveness of ESG shareholder proposals, especially those focused on the environment. Some of these proposals are so extreme that even shareholders who have traditionally supported ESG proposals have voted in opposition.
  • We are starting to see the emergence of proposals focused on JSG issues. Innovative shareholder proposals, including those focused on the well-being of U.S. workers and U.S. security, are starting to appear for votes at annual meetings. As awareness of the importance of JSG and its underlying investment themes continues, we expect to see more proposals focus on core JSG issues that impact the health of American communities.

As we complete the 2022 proxy season, we will continue to analyze shareholder proposals for their potential impact on U.S. jobs, security & growth. As investors, how we vote our clients’ shares and how we engage with our companies is critical to advancing the interests of our clients and JSG.

We will share some additional case studies of specific shareholder votes that provide insight into the state of shareholder proposals and Amberwave’s proxy voting process.