What to Expect From the 2022 Proxy Season

Written By Vini Oliveira, Senior Director & Delphine Robert, Senior Consultant

February 9, 2022

The COVID-19 pandemic has brought about significant systemic change in society, and shareholder activism is no exception. Investor scrutiny has grown in a variety of corporate governance topics, especially those involving employee health and executive compensation. Similarly, investors are honing in on political spending, especially as we approach mid-term elections in the U.S. In fact, more than one-in-three social proposals in 2021 were related to political spending, and that trend should continue in 2022.

Ahead of the 2022 annual general meetings (AGMs), corporate leaders should expect discussions with shareholders requesting climate reports, workforce demographics information, and employee safety initiatives. Leaders’ ability to address these issues (or at least convey an openness to address them) will strongly influence whether or not the company receives an unwanted shareholder proposal.

The focuses for any given group of investors vary widely by company, but we have outlined the most likely topics for activism in 2022 and what type of information shareholders will presumably demand. Use this to ensure your leadership team has appropriate talking points and a potential pathway to enhanced disclosures in place.


Whether through shareholder proposals, “Vote No” campaigns, or board accountability (i.e., votes against director elections), climate will continue to be a key area for investor activism.

The most common proposals are requests for climate lobbying disclosure, reports on greenhouse gas emissions, and “Say-on-Climate” resolutions—formal requests for a company’s strategy to achieve carbon neutrality. In fact, through the first five weeks of 2022, 75 climate-related shareholder proposals have already been filed.

As usual, large asset managers will be the determining factor between successful and unsuccessful shareholder proposals. And while their voting behavior is not always predictable, the position of climate-friendly shareholder coalitions, such as the Net Zero Asset Managers Initiative (made up of 220 signatories with $57 trillion in assets under management), should be watched closely.

Diversity & Inclusion

New forms of diversity-related shareholder proposals appeared during the 2021 proxy season, including requests of racial equity audits. These received significant support—in some cases over 30%—despite representing a new type of proposal.

Looking to 2022, however, the expectation is that Equal Employment Opportunity proposals will become the standard. Currently, U.S.-based companies with more than 100 employees are required to complete EEO-1 forms, which are filed with the U.S. Equal Employment Opportunity Commission and the Department of Labor. The EEO-1 forms detail the workforce’s demographic makeup across categories including race, ethnicity, and gender. These shareholder proposals require companies to publicly disclose their EEO-1 forms to highlight the demographics of their employees. In 2021, proposals requesting workplace diversity data received about 22% support.

There may be a growing trend of shareholder proposals requesting a civil rights audit, as exemplified by the recent Apple proposal filed by SOC Investment Group and Trillium Asset Management, among others. Most likely, though, these shareholder proposals will be reserved for companies that are facing legal and regulatory disputes regarding their treatment of employees.

Human Capital and Compensation

Understandably, the COVID-19 pandemic has put issues pertaining to employee health and safety at the center of many stakeholder groups’ concerns, including investors. Shareholders are increasingly taking action to request greater oversight and visibility into protective measures adopted by companies. Therefore, it’s important for senior leaders to ensure they have both the right actions in place and the appropriate plan to disclose those actions, regardless of whether they receive a shareholder proposal or not.

Similarly, the pandemic shed light on the magnitude of many executives’ pay packages, especially in the aftermath of major layoffs. Large compensation packages have received additional scrutiny through shareholder proposals and the expectation is that this trend will maintain. As a result, senior leaders should proactively consider the potential response to a change in compensation resulting in greater pay. Keep in mind that bonuses tied to transparent and measurable metrics are inherently less controversial than significant base salaries, and these may be the necessary avenue to increase some executives’ payout.

New Proposal Rules

Two important new rules by the Securities and Exchange Commission (SEC) will shape the way proposals are filed in 2022. The first rule changes the minimum threshold of shareholder support needed in order to resubmit the same proposal for the same company in subsequent years. The support required will now be 5% in the first year, 15% in the second year, and 25% in the third year. This is up from 3%, 6%, and 10%, respectively.

The second rule revises the SEC’s definition of “ordinary business” exceptions, used by companies seeking to omit shareholder resolutions from their ballot. The SEC will now consider social and environmental issues in a societal context as opposed to simply their impacts on a company. This ultimately means that fewer shareholder proposals will be omitted under the ordinary business exception and companies may have to address proposals that could otherwise be ignored.

Don’t Wait to Prepare

The important takeaway with all of these proposal trends is that every company should do its due diligence to appropriately prepare for a variety of scenarios. No single company will receive proposals addressing all of these topics, but it is a good idea, nonetheless, to have a plan for each. Whether you’re looking to build a plan for proxy season or respond to shareholder proposals, we have the expertise to help. Reach out to us to set up a conversation and better understand how we can help your proxy season go smoothly.

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