What to expect in the 2023 proxy season: Four areas rising to the top

As we head into the heart of the 2023 proxy season, we expect shareholder proposal activity to remain high, but not to the level it was in 2022. This anticipated activity is reflective of a challenging business environment alongside a shifting regulatory landscape, a continued focus on environmental and social issues, and evolving shareholder expectations. More boards can also expect to see shareholder proposals seeking to prevent or roll back environmental and social reporting and disclosure (sometimes called “anti-ESG” proposals).

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Shareholder proposals

During the 2022 proxy season, shareholder proposals relating to environmental and social issues were generally split between broad and narrowly prescriptive in terms of the action requested. Early indications are that the percentage of environmental and social proposals this year will continue to increase relative to the overall number of proposals — with a trend towards more specific requests from some investors. However, several institutional investors have expressed a preference for broader proposals. For example, shareholders may have an easier time supporting a proposal to adopt GHG emissions goals than one to provide more specific information about methane emissions. This divergence could result in overall support for shareholder proposals declining, continuing the downward trend that began last year.

The regulatory landscape may lag shareholder expectations

While companies and stakeholders await final SEC rules on climate and cybersecurity disclosures, and proposed rules on disclosure of human capital management, some large institutional investors are encouraging companies to disclose more about the risks and opportunities associated with these topics. Many companies will need time to prepare for the new disclosure rules, while others continue to provide disclosures based on existing guidance (e.g., the SEC’s 2010 guidance on climate disclosures) and voluntary climate-related and other risk disclosures in their proxy statements and annual reports. Regardless, shareholder expectations may be ahead of the regulatory agenda when it comes to climate, cyber and human capital management disclosure.

Consider universal proxy rules

In November 2021, the SEC adopted amendments to the proxy rules mandating that companies use universal proxy cards in contested elections. Traditionally, shareholders had to choose between voting for the company’s slate of candidates on the company’s proxy card or a dissenter’s competing slate on that proxy card. Universal proxy allows shareholders to mix and match from competing slates. The new rules — effective for shareholder meetings involving contested director elections held after August 31, 2022 — may be a significant change in corporate governance if proxy contests run by investors other than hedge funds become more common.

Prepare for new pay-versus-performance disclosures

In August 2022, the SEC adopted rule amendments requiring registrants to disclose information reflecting the relationship between executive compensation a registrant actually paid and that registrant’s financial performance. The new disclosure requirements are effective for the 2023 proxy season, including fiscal years ended on or after December 16, 2022. All reporting companies that file proxies or information statements that require executive compensation disclosure are required to comply with this new rule.

…read more in the report.

Contact us

Maria Castañón Moats

Leader, Governance Insights Center, PwC US


Paul DeNicola

Principal, Governance Insights Center, New York, PwC US


Matt DiGuiseppe

Managing Director, Governance Insights Center, Boston, PwC US


Gregory Johnson

Director, Governance Insights Center, New York, PwC US


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