AllianzGI voting record reveals gulf in governance standards

27/02/2019

Summary

Allianz Global Investors, one of the world’s leading active investment managers has today published analysis of how it voted on nearly 90,000 shareholder and management proposals in 2018, with figures revealing a stark global disparity in corporate governance standards.

  • Rejected almost 25% of all shareholder meeting proposals globally in 2018
  • Remuneration and director-related proposals under heaviest fire
  • UK companies lead the way in corporate governance standards whilst Hong Kong and US lag behind

Participating in 8,535 (2017: 7,961) shareholder meetings over the course of 2018, AllianzGI voted against, withheld or abstained from at least one agenda item at 75% (2017: 68%) of all meetings globally. It opposed 24% (2017: 24%) of all resolutions. These figures reflect AllianzGI’s active and globally consistent approach to stewardship and a willingness to vote against proposals that do not meet its expectations of investee companies.

Remuneration related proposals stood out as the most contentious area globally during 2018. AllianzGI voted against 52% (2017: 42%) of all management proposals, mostly because executive remuneration was not sufficiently linked to company strategy and performance, and/or the incentive schemes lacked robust KPIs.

Analysis reveals that this trend was particularly prominent in Hong Kong, where AllianzGI voted against management on 95% of remuneration related proposals, with AllianzGI wanting to see much higher transparency of performance KPIs together with actual performance targets for executive directors. AllianzGI only voted against management on 16% (2017: 14%) of remuneration related proposals at UK companies, demonstrating the UK’s corporate governance standards are ahead of their peers.

Board composition – be it the quality, independence and/or diversity of directors - was another prominent area of friction with 27% (2017: 28%) of management resolutions failing to meet AllianzGI’s standards. As with remuneration, there were notable disparities in the quality of proposals from one country to another with AllianzGI voting against 48% (2017: 31%) of director related proposals in Japan compared to just 7% (2017: 7%) in the UK.

The disparities are significantly strong that this could be taken as proxy for the standard of governance norms in each country.

Commenting, Eugenia Unanyants-Jackson, Global Head of ESG research at Allianz Global Investors, said:

On remuneration:
“A poor link between executive pay and company performance, insufficient transparency of performance KPIs and actual performance targets, the short-term nature of incentive awards, and concerns over potentially excessive pay have been the main drivers in our opposition to compensation related proposals.

Clear information on KPIs and targets is critical to enable investors to assess the appropriateness and robustness of performance measures. We would also like to see a lot more emphasis on long-term performance across a reasonable range of key value drivers for the business in the total executive compensation package.”


On board independence:
“AllianzGI would like to see majority independent boards, and at least 1/3rd independence in cases where a higher standard is hard to achieve due to market practices and ownership structures. However, independence alone is not enough to achieve high standards of governance – it should be accompanied by diversity of backgrounds, experience and skills that are both relevant and helpful to the business. It is really important that nominations committees adopt a robust approach to board composition and refreshment to ensure our investee companies are led by high quality boards that reflect the current and future needs of the business.”

On overboarding:
“We would like to caution against directors holding a large number of board mandates, which we believe can compromise their ability to discharge their board and committee responsibilities to a high standard both under normal circumstances and when special situations or unexpected developments require substantial additional time commitment from directors.”

On environmental and social matters:
“AllianzGI pays close attention to shareholder proposals related to environmental and social matters. Our voting decisions are determined by the nature and implications of these proposals for our investee companies. We are pleased to have been able to support over 50% of shareholder-led proposals related to environmental and social matters, and see these as an important part of our stewardship programme aimed at reducing environmental and social risks in our portfolios by improving corporate practices.”

As an active manager, AllianzGI engages with companies on strategy, capital management, corporate governance, compensation, environment and climate change, human rights and other topics that are deemed material for the companies AllianzGI invests in. AllianzGI discloses its voting activities on resolutions at thousands of companies in real time, alongside an explanation of why it voted against or abstained.

Total percentage votes against all management proposals by country

Country % votes against all proposals 2018
USA 35%
Japan 44%
United Kingdom 6%
Taiwan 21%
Germany 26%
France 31%
Netherlands 16%
Italy 31%
Switzerland 20%
Hong Kong 26%
Sweden 10%
Spain 21%
Belgium 21%



Total percentage votes against compensation related proposals by country

Country % votes against compensation related proposals 2018
USA 74%
Japan 33%
United Kingdom 16%
Taiwan N/A
Germany 49%
France 38%
Netherlands 60%
Italy 63%
Switzerland 32%
Hong Kong 95%
Sweden 31%
Spain 41%
Belgium 57%



Total percentage votes against director related proposals by country

Country % votes against director related proposals 2018
USA 28%
Japan 48%
United Kingdom 7%
Taiwan 35%
Germany 21%
France 28%
Netherlands 11%
Italy 43%
Switzerland 15%
Hong Kong 30%
Sweden 15%
Spain 18%
Belgium 17%





For further information please contact:
Alastair Fairbrother, Tel. +44 203 246 7432
Sarah Einig, Tel. +44 203 246 7846
Vivi McDuell, Tel. +44 203 246 7251
ukmedia@allianzgi.com

About Allianz Global Investors
Allianz Global Investors is a leading active asset manager with over 730 investment professionals in 24 offices worldwide and managing more than EUR 500 billion in assets for individuals, families and institutions*.

Active is the most important word in our vocabulary. Active is how we create and share value with clients. We believe in solving, not selling, and in adding value beyond pure economic gain. We invest for the long term, employing our innovative investment expertise and global resources. Our goal is to ensure a superior experience for our clients, wherever they are based and whatever their investment needs.

Active is: Allianz Global Investors



* Data as at 31 December 2018
i These figures purely reflect the number of votes against and do not include abstentions

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The views and opinions expressed herein, which are subject to change without notice, are those of the issuer or its affiliated companies at the time of publication. Certain data used are derived from various sources believed to be reliable, but the accuracy or completeness of the data is not guaranteed and no liability is assumed for any direct or consequential losses arising from their use. The duplication, publication, extraction or transmission of the contents, irrespective of the form, is not permitted.

This material has not been reviewed by any regulatory authorities. In mainland China, it is used only as supporting material to the offshore investment products offered by commercial banks under the Qualified Domestic Institutional Investors scheme pursuant to applicable rules and regulations.

This document is being distributed by the following Allianz Global Investors companies: Allianz Global Investors U.S. LLC, an investment adviser registered with the U.S. Securities and Exchange Commission; Allianz Global Investors Distributors LLC, distributor registered with FINRA, is affiliated with Allianz Global Investors U.S. LLC; Allianz Global Investors GmbH, an investment company in Germany, authorized by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin); Allianz Global Investors (Schweiz) AG, licensed by FINMA (www.finma.ch) for distribution and by OAKBV (Oberaufsichtskommission berufliche Vorsorge) for asset management related to occupational pensions in Switzerland; Allianz Global Investors Asia Pacific Ltd., licensed by the Hong Kong Securities and Futures Commission; Allianz Global Investors Singapore Ltd., regulated by the Monetary Authority of Singapore [Company Registration No. 199907169Z]; Allianz Global Investors Japan Co., Ltd., registered in Japan as a Financial Instruments Business Operator [Registered No. The Director of Kanto Local Finance Bureau (Financial Instruments Business Operator), No. 424, Member of Japan Investment Advisers Association and Investment Trust Association, Japan];and Allianz Global Investors Taiwan Ltd., licensed by Financial Supervisory Commission in Taiwan.

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AllianzGI appoints Barbara Rupf Bee to lead EMEA business

28/03/2019

Summary

Allianz Global Investors, one of the world’s leading active investment managers, announced today that Barbara Rupf Bee will join the firm as Head of Europe, Middle East & Africa (EMEA) from 15 May 2019 to lead its distribution function in the region. She will report to Tobias Pross, who continued in this role on an interim basis following his appointment as Global Head of Distribution in April 2018. Barbara Rupf Bee will become a member of AllianzGI’s Global Executive Committee.