More DIY investors are making their voices heard

More DIY investors are making their voices heard and holding big companies accountable for their conduct, new research shows. 

With issues like climate change gaining ever more traction, investing platform interactive investor said the number of votes it processed more than doubled in 2021 compared to the previous year.

Through its ‘voting mailbox’ service online, which allows its customers to vote at the  annual general meetings of companies they hold shares in, some 161,904 votes were cast in 2021, compared to 77,185 the previous year.

Shell’s consultation about its plans to simplify its structure was the most voted on resolution on ii in December last year. 

Shell shareholders overwhelmingly backed plans to move the company’s headquarters from the Netherlands to Britain.   

But the oil giant also faced a significant shareholder rebellion over its carbon-cutting plans at its last AGM, which made it the seventh most voted share on ii in May last year. 

A resolution calling for carbon emissions reduction targets received just 30 per cent of votes, forcing Shell to consult shareholders and report on their views on the matter.

Among the top ten most voted on shares were Lloyds banking group, oil major BP, telecoms giant Vodafone and pharma group GlaxoSmithKline, with the latter inviting shareholders to have a say on future strategy at its AGM meeting in May.

Another pharma giant, AstraZeneca, was among the most voted on shares on ii in May, when 40 per cent of investors voted against proposals to hand its chief executive, Pascal Soriot, bigger bonus awards for the second consecutive year.   

Shell’s consultation about its plans to simplify its structure was the most voted on ii in December last year

Meanwhile, Scottish Mortgage Investment Trust, which has underperformed over the past six months, was the tenth most voted on share in June, when it asked investors to express their view on the directors’ share qualification rule. 

Lee Wild, head of equity strategy at interactive investor, said: ‘More shareholders than ever are seeing the advantages of becoming more involved in the way their companies are run. 

‘And the more of them that exercise their right to vote at company meetings, the greater the influence they can have. We see time and again how effective professional activist investors can be at achieving change at underperforming companies, and management can be held to account by smaller shareholders, especially if they vote in numbers.’ 

In November last year, ii made voting at company AGMs , and other voting events, the default setting on its platform. 

Customers can select to opt out if they wish, rather than previously having to select to opt in. The move followed an education campaign on voting started by the platform at the start of 2021.

Separate data has showed that shareholder activism among British firms soared in the past year, with investors taking a stand on issues from governance to the environment.  

Major revolts against the reappointment of directors at FTSE 350 businesses have climbed by 40 per cent, up from 30 in 2020 to 42 this year, recent Thomson Reuters data showed.

In total, 24 of the directors were members or chairmen of remuneration committees – suggesting shareholders are paying closer attention to over-generous pay deals.

Meanwhile, the 94 per cent of votes at FTSE 350 firms in favour of companies’ pay reports in 2020 slid to 91.6 per cent this year.