Blue chip, more support from shareholders for remuneration policies

Support for remuneration policies at Italian Annual General Meetings (AGMs) has slightly increased, from 86% to 89%, indicating progress in aligning with European best practices. Despite this, a notable gap remains, particularly in executive remuneration and bonuses, which are still contentious issues among shareholders. 2024 marks a positive shift from the previous year’s dissent, especially concerning Environmental, Social, and Governance (ESG) criteria.

Sodali & Co’s research highlights this change, showing a rise in favourable votes for both the Remuneration Policy and the Report among FTSE Mib companies. Support for the Remuneration Policy increased from 86% to 89%, and for the Report, from 84% to 89%. This improvement is partly attributed to more supportive recommendations from proxy advisors like ISS and Glass Lewis.

In the interview with Il Sole 24 Ore, Fabio Bianconi, Managing Director of Sodali & Co, attributes this year’s advancements to enhanced disclosure and transparency. However, there’s still a significant minority dissent, with an average of 20% against both the Policy and the Report when excluding controlling shareholders’ influence. This dissent is higher than in other European markets, with approval levels closer to 90%.

“Investors call for greater clarity on annual objectives and a stronger link between targets and performance. Additionally, there’s a need to bridge the gap between Italian and European practices regarding technical aspects like severance packages and non-compete agreements, signalling room for further improvement”, explains Bianconi.