Institutional Investors: How Well Do You Know Their Compensation Policies?

The blog draws on insights from AQTION’s second edition of “Stewardship in AQTION”, which analyses the voting and engagement practices of the world’s largest 65 Investors. 

Key takeaways include:

• Proxy Advisors Usage: While proxy advisors remain influential, over 90% of investors’ votes reflect custom policies rather than proxy advisor recommendations.
• Voting Guidelines: Investors are shifting towards less prescriptive, more principles-based voting guidelines. However, they are demanding higher standards of board responsiveness, particularly regarding unequal voting rights and exceptional executive pay.
• Exceptional Remuneration: 34 of the top 65 investors disclose a position on extraordinary awards. While most investors are cautious about non-standard executive compensation, with notably J.P. Morgan Asset Management and Aberdeen Investments opposing non-standard pay as a principle, some are willing to consider exceptions if the company demonstrates “truly exceptional circumstances and significant value creation”.

The full blog can be accessed here.