German asset management group Allianz Global Investors has warned bosses at European large cap companies that it will vote against boards who do not link executive remuneration to explicit environmental, social and governance targets.
In a press statement issued on Tuesday (22 February), the fund management giant said it is strengthening its voting policy for 2022 by updating its corporate governance guidelines on executive pay.
It comes as the company published its annual proxy voting report in which it detailed how it voted at annual general meetings around the world over the past 12 months. This included an analysis of around 110,000 shareholder and management proposals.
In a statement accompanying the report, the company said that it voted against 20% of all remuneration-related proposals in the UK during 2021, compared to just 12% in 2020.
It noted that, while executive pay is “generally well-formed in the UK” that there were still areas of dissent relating to “insufficient remuneration disclosure” and “increases to salaries which were not linked to material changes” within companies.
“In keeping with our desire to shape a more sustainable future with measurable positive outcomes, we want to ensure that our investee companies align their executive remuneration policies with ESG KPIs,” said Matt Christensen, global head of sustainable and impact investing at Allianz Global Investors.
“As an active investor, exercising our voting rights is one of the most powerful tools we have to effect change.”
The company’s own analysis of its voting behaviour, by location, showed that it voted against 40% of all proposals from the United States of America in 2021, ahead of Japan and Italy (32%). By comparison, it only voted against 4% of proposals originating within the UK, 10% in Sweden and 11% in Spain during the same 12 month period.
Allianz Global Investors is one of the largest investment firms in the world with €673 billion of assets under management.
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