2025 Proxy Season Review: Portugal

This year’s review analyzes the 2025 Annual General Meetings (AGMs) of 15 PSI issuers, following the exclusion of Greenvolt from the index. Key trends and developments across governance practices, board composition, and shareholder engagement are highlighted below.

Meeting Formats & Participation

• Hybrid and physical-only formats are equally preferred in 2025, with a slight rise in hybrid meetings and a decline in physical-only formats.
• Virtual-only AGMs remain rare in Portugal, consistent with broader European trends, though their use is increasing modestly.
• Quorum levels dropped to 76.0% from 78.3% in 2024, likely due to reduced participation from free float shareholders.

Board Elections

• Most PSI issuers use classified boards with joint slate voting. Only one of four joint slates received full support from proxy advisors ISS and Glass Lewis.
• Individual elections for replacement directors saw similar opposition levels to previous years, mainly due to concerns over board independence.

Post-AGM Board Composition

• Independent and affiliated directors now each represent ~36% of board seats, with executive directors at 27.8%.
• Controlled companies tend to appoint more affiliated directors, while non-controlled issuers favor independent directors.
• Board chairs are increasingly independent (26.7% in 2025), though affiliated chairs remain the majority.
• Gender diversity improved slightly, with women making up 35.9% of board members. However, executive roles remain largely inaccessible to women, with only two female CEOs and one female chair across the index.

Remuneration Practices

• Only two issuers submit Remuneration Reports annually; most focus on Remuneration Policies every three years.
• Proxy advisors opposed 50% of remuneration-related proposals, citing issues like lack of transparency, excessive pay, and poor governance practices.
• ESG targets are widely used in short-term bonuses (86.7%) but less so in long-term incentive plans (26.7%).

Proxy Advisor Behavior

• ISS and Glass Lewis issued fewer negative recommendations in 2025 compared to 2024.
• ISS shifted focus from board elections to remuneration and non-board matters.
• Glass Lewis increased opposition to remuneration items while reducing objections to board elections and financial proposals.