Shareholders in Brazil are less inclined to increase executive salaries

According to research conducted by Morrow Sodali (which examined shareholder meetings of the most actively traded companies in the Brazilian market (IBr-X 50) between 2020 and 2023), investors are less likely to approve executive compensation proposals than previously. 

For example, the Institutional Shareholder Services (ISS) recommended voting against 34% of executive compensation proposals for IBr-X 50 companies in 2022. Last year, the consultancy declined 37% of such requests.

While approval rates above 90% indicate positive reception from investors, the study data suggests that investors are no longer as willing to tolerate compensation policies that lack sufficient information or solid foundations. Agnes Blanco Querido, Managing Director of Morrow Sodali in Brazil, observes that companies abroad often provide detailed descriptions justifying directors’ earnings and transparent proposals regarding raises. However, Brazilian corporations limit themselves to providing requested information, which may not provide the necessary comfort to investors.

Read the full article here (in Portuguese).