Shareholder opposition to executive pay eases globally

By Simon Jessop

LONDON, Sept 1 (Reuters) - Shareholder rebellions over executive pay eased across many of the world's biggest stock markets this year, with opposition falling in Europe, the United States and Japan despite a handful of high-profile revolts.

The move comes as pay and perks continue to dwarf the average worker's wage, with average CEO pay at S&P 500 companies hitting a record high even excluding a bumper pay plan for Elon Musk, the billionaire owner of SpaceX.

It also follows a push by the U.S. administration of Donald Trump to rein in proxy advisory firms and curb shareholder activism, and comes amid shifts in shareholder voting behaviour, including efforts by some asset managers to hand more decisions back to end-investors.

"The result is a more fragmented environment in which voting outcomes can be less predictable, even when overall dissent levels remain relatively low," said Cas Sydorowitz, head of Georgeson Advisory.

Contested pay reports in Europe, where investors sign off on payouts for the prior year, fell almost 6 percentage points year-on-year to 25.2%, data from shareholder advisory firm Georgeson Advisory showed — the lowest average level since at least 2018.

As well as fewer 'oppose' recommendations from proxy advisors, which help institutional investors decide how to vote, companies were increasingly engaging their investors to head off any discontent at the annual general meeting, Georgeson said.

A contested vote is defined as one that receives at least 10% shareholder opposition, Georgeson said.

Opposition to future remuneration policies also declined, albeit to a lesser extent, to 36.6% from 37.9%, the data showed, led by the Netherlands where opposition fell to 10.5% from 25%. Belgium and Germany were exceptions, with contested votes in Germany rising to 88.9% from 47.6%.

Companies to face material pushback included British medical technology company Smith & Nephew and German potash company K+S, both of which saw pay policies opposed by more than 40% of the votes cast.

"Investors in the UK and Europe remained noticeably more sceptical of proposed remuneration policies than of remuneration outcomes, suggesting continued concern about the design of future pay arrangements rather than simply their implementation," said Sarah Wilson at Minerva Analytics.

In the United States, the world's biggest equity market that typically has few rebellions, average support for "Say on Pay" votes in the S&P 500 rose to 90.4% from 89.7%, although the share of "failed" votes, with less than 50% support, also inched higher to 1.4% from last year's 1.2%.

"The modest increase in support for Say on Pay during 2026 likely reflects a combination of stronger corporate performance and a generally favorable market environment," said Rajeev Kumar, senior managing director at Georgeson.

In Japan, 11 of the 126 director compensation resolutions put forward by Nikkei 225 companies during the 2026 AGM season were contested, some 8.7%, down from 16 instances, or 12.4%, of resolutions in 2025, although the total number of resolutions varies by year.

(Additional reporting by Ross Kerber in Boston; Editing by Lisa Shumaker)