NEW DELHI: A recent study by PRIME Database has revealed a decline in the level of dissent expressed by institutional investors against company resolutions. According to the findings, shareholder resolutions with more than 20% institutional dissent, indicated by negative votes, fell to 16% of the total resolutions in the latest proxy season. This marks a slight decrease from the 17% recorded in both 2023-24 and 2022-23 periods. The study covers all companies listed on the National Stock Exchange (NSE), which reported 1,581 resolutions out of a total of 10,092 resolutions for which institutional voting data is available.
In the Nifty-50 companies, the trend of institutional dissent saw a slight increase. Resolutions where more than 20% of institutional investors voted negatively accounted for 11% of total resolutions, up from 9% last year. A closer look, however, shows that 18 of these 63 resolutions were from a single company. Excluding these, the percentage of resolutions facing institutional dissent would drop to 8% of the total.
Pranav Haldea, Managing Director of PRIME Database Group, stated that this trend is a positive one, as it reflects that companies are increasingly attentive to the concerns of minority shareholders. Haldea emphasized that firms appear to be engaging more with institutional investors before putting forward resolutions, particularly those related to board changes and remuneration, which have historically been contentious issues.
On a broader scale, the study shows that in the first half of the 2024-25 fiscal year, a total of 14,494 resolutions were proposed during 2,824 shareholder meetings across 1,995 companies listed on the NSE, up to September 30, 2024. This suggests a busy proxy season, with companies showing a continued focus on addressing shareholder concerns.
