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Spanish shareholders' rebellion reaches the Ibex 35

27 April 2022 Articles

Spanish shareholder meetings have undergone a change and the attitude of large institutional investors is now very active.

Board remuneration is one of the aspects that arouses the most suspicion among shareholders and their voting advisors. Investors penalize the payment of bonuses not linked to specific metrics, the lack of transparency in remuneration policies, or not linking them to the evolution of the company.

Board composition remains an area of interest for investors. They aim to ensure that companies are following the recommendations of the CNMV which stipulate that 50% of board directors should be independent and that at least 40% are female. They are also focused on the separation of the roles of CEO and Chair. The CEO should control the executive function of the company, and the Chair should not be part of the day-to-day functions.

In this article by Cinco Días, Borja Miranda Johansson, Head of M&A and Activism for Spain and Portugal at Morrow Sodali, reports that investors are increasingly demanding, have very clear expectations and are not afraid to act.

Mirroring what is already happening in the US or the UK, Spanish AGMs have become an all-out battle. On one hand, the management teams of companies fear the censoring of the funds on board remuneration and the role of new directors. On the other hand, investors are increasingly willing to demonstrate their discontent by dissenting votes at the AGMs.