Participating in 8,535 (2017: 7,961) shareholder meetings over the course of 2018, AllianzGI voted against, withheld or abstained from at least one agenda item at 75% (2017: 68%) of all meetings. Globally it opposed 24% (2017: 24%) of all resolutions, whereas in the UK AllianzGI opposed just 6% of meetings, reflecting the UK’s high level of corporate governance standards, significantly ahead of global peers.

Remuneration related proposals stood out as the most contentious area both in the UK and globally during 2018. AllianzGI voted against 52% (2017: 42%) of all management proposals, mostly due to executive remuneration not being sufficiently linked to company strategy.

Analysis also revealed that this trend was particularly prominent in Hong Kong, where AllianzGI voted against management on 95% of remuneration related proposals. AllianzGI wanted to see much higher transparency of performance KPIs, together with actual performance targets for executive directors. In comparison, AllianzGI only voted against management on 16% (2017: 14%) of remuneration related proposals of UK companies, due to insufficient links between performance KPIs under executive incentive plans and key business value drivers.

Board composition – be it the quality, independence and/or diversity of directors - was another prominent area of friction with 27% (2017: 28%) of management resolutions failing to meet AllianzGI’s standards. As with remuneration, there were notable disparities in the quality of proposals from the UK and other countries, with AllianzGI voting against 48% (2017: 31%) of director related proposals in Japan compared to just 7% (2017: 7%) in the UK.

Commenting on the UK’s 2018 voting record, Simon Gergel, CIO UK equities at Allianz Global Investors said:

“For the second year running, the UK has shown real leadership when it comes to corporate governance standards. This is reflected in our 2018 voting record which illustrates the stark difference between how we voted in the UK compared to other countries, with the UK receiving the fewest votes against AGM resolutions.

“Looking ahead to 2019, we will continue to vote against proposals that fail to meet the governance standards we expect of the companies we invest in. In particular, as an active steward of the assets we own, we’ll continue to closely watch issues like the alignment of executive pay with long-term incentives and the number of board directorships that an individual can reasonably manage.”

Commenting on the analysis, Eugenia Unanyants-Jackson, Global Head of ESG research at Allianz Global Investors, said:

On remuneration:
“A poor link between executive pay and company performance, insufficient transparency of performance KPIs and actual performance targets, the short-term nature of incentive awards, and concerns over potentially excessive pay have been the main drivers in our opposition to compensation related proposals. Clear information on KPIs and targets is critical to enable investors to assess the appropriateness and robustness of performance measures. We would also like to see a lot more emphasis on long-term performance across a reasonable range of key value drivers for the business in the total executive compensation package.”

On board independence:
“AllianzGI would like to see majority independent boards, and at least 1/3rd independence in cases where a higher standard is hard to achieve due to market practices and ownership structures. However, independence alone is not enough to achieve high standards of governance – it should be accompanied by diversity of backgrounds, experience and skills that are both relevant and helpful to the business. It is really important that nominations committees adopt a robust approach to board composition and refreshment to ensure our investee companies are led by high quality boards that reflect the current and future needs of the business.”

On overboarding:
“We would like to caution against directors holding a large number of board mandates, which we believe can compromise their ability to discharge their board and committee responsibilities to a high standard both under normal circumstances and when special situations or unexpected developments require substantial additional time commitment from directors.”

On environmental and social matters:
“AllianzGI pays close attention to shareholder proposals related to environmental and social matters. Our voting decisions are determined by the nature and implications of these proposals for our investee companies. We are pleased to have been able to support over 50% of shareholder-led proposals related to environmental and social matters, and see these as an important part of our stewardship programme aimed at reducing environmental and social risks in our portfolios by improving corporate practices.”

As an active manager, AllianzGI engages with companies on strategy, capital management, corporate governance, compensation, environment and climate change, human rights and other topics that are deemed material for the companies AllianzGI invests in. AllianzGI discloses its voting activities on resolutions at thousands of companies in real time, alongside an explanation of why it voted against or abstained.

Total percentage votes against all management proposals by country

Total percentage votes against compensation related proposals by country

Total percentage votes against director related proposals by country

1. These figures purely reflect the number of votes against and do not include abstentions

For further information please contact:
Alastair Fairbrother +44 (0)20 3246 7432
Vivi McDuell +44 (0) 20 3246 7251
Sarah Einig +44 (0)20 3246 7846
ukmedia@allianzgi.com

About Allianz Global Investors:
Allianz Global Investors is a leading active asset manager with over 730 investment professionals in 24 offices worldwide and managing more than EUR 500 billion in assets for individuals, families and institutions*.

Active is the most important word in our vocabulary. Active is how we create and share value with clients. We believe in solving, not selling, and in adding value beyond pure economic gain. We invest for the long term, employing our innovative investment expertise and global resources. Our goal is to ensure a superior experience for our clients, wherever they are based and whatever their investment needs.

Active is: Allianz Global Investors  

*Data as at 31 December 2018

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