This Year's Shareholders' Meeting Highlights: The Performance of Retail Investors

Expected Voting Advisory Firm Sustainvest During Shareholders' Meeting Season
Attention from Activist Shareholder Funds, Minority Shareholders, and Widely Held Companies

[Asia Economy Reporter Park So-yeon] Key points to watch in this year's regular shareholder meeting season include the expansion of shareholder proposals by activist funds, voting rights exercise in widely held companies, and environmental and social shareholder rights activities. The proxy advisory firm Sustainvest revealed this in its 2023 regular shareholder meeting season preview report.

Sustainvest explained, "Following last year, this year's regular shareholder meeting season is expected to see numerous shareholder proposals from domestic activist funds and minority shareholders. Unlike shareholder proposals related to management disputes within controlling families, proposals raised by general shareholders such as minority shareholders and funds are becoming increasingly prominent."

Looking at the agenda items proposed through shareholder proposals last year, the majority were related to governance and shareholder returns, including outside director appointments (24%), dividends (19%), amendments to articles of incorporation (14%), inside director appointments (10%), auditor appointments (7%), and audit committee member appointments (7%).

Sustainvest expects a similar distribution of shareholder proposal types this year, highlighting particular interest in KT&G’s shareholder meeting, where Flashlight Capital Partners (FCP) and Anda Asset Management are conducting campaigns, as well as dividend expansion proposals for bank holding companies announced by Align Partners.

With the CEO terms of representative widely held companies such as KT and Shinhan Financial Group, where the National Pension Service is the largest shareholder, expiring in March, voting rights exercise in these companies is also presented as a key point of attention. Sustainvest forecasted, "As the National Pension Service emphasizes governance transparency in widely held companies and signals active voting rights exercise, attention will focus on the process and direction of the National Pension Service’s voting on director appointment agendas in these companies." It added, "Another point to watch is that environmental and social risk management by companies may be considered in this year’s director reappointment agendas. Recently, overseas pension funds and institutional investors have increasingly cast dissenting votes in director appointment voting for domestic companies based on failures in environmental and social risk management."

From a regulatory perspective, Sustainvest expects that with protective measures for general shareholders established regarding subsidiary listings after physical spin-offs, the proportion of human spin-off agendas will increase over physical spin-offs in this year’s regular shareholder meeting season. Ryu Young-jae, CEO of Sustainvest, said, "With the market atmosphere expanding shareholder proposals from general shareholders, companies and boards of directors will be encouraged to engage more actively with shareholders regarding long-term corporate value enhancement plans and shareholder return policies."

This content was produced with the assistance of AI translation services.