01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.8 Exercising our voting rights Principle 7 11 12 Board independence, overboarding We encourage companies to improve Case study: Management Case study: Vote against an and role of the chair gender diversity and, in the UK, the US remuneration at a UK employee stock purchase plan In 2023, we voted against 23% of all and Canada, the ethnic diversity of their investment company At its extraordinary general meeting director-related proposals, consistent boards by broadening the talent pool Given concerns around retention and (EGM), a Chinese food company with the previous year. We opposed 24% rather than overboarding individuals recruitment, a UK investment company proposed a 10-year employee stock of all director elections as we continue and exposing them to heightened initially consulted on its remuneration purchase plan (ESPP) for shareholders’ to have major concerns about the sound professional risks. policy, with a view to increasing the approval. While the plan met our and balanced set-up of many boards In Asia, our highest rates of opposition overall opportunity available to expectation in terms of dilution limits, (2022: 25%). We also voted against several were recorded in Hong Kong due to management. The proposal looked to it failed to disclose company-level companies where we deemed the board the low independence level of many right-size executive base salaries, as well performance challenges, and allowed of directors and/or board committees boards and their committees, as well as increase the maximum opportunity up to 30% of the plan’s shares to be to be insu昀케ciently independent, either as overboarding. For the same reasons, available through a “super stretch” allocated to directors, supervisors and because directors had a long tenure in Europe the most contentious markets mechanism – an additional target senior managers without any detailed or where they were representatives of were Germany and Sweden. In Italy, we beyond the existing maximum target rationale. This 昀氀exibility could change major shareholders. Overboarding is a see speci昀椀c issues due to the bundled objective. We pushed back against the the nature of the plan and provide major ongoing concern in many markets. election of board members in the voto idea behind this additional objective. targeted bene昀椀ts to executives and As demands on non-executive directors di lista system. We would prefer that We also recognised the need for the senior management, which could increase in times of economic uncertainty directors are elected on an individual basis company to remain competitive, but harm minority shareholders’ interests. and geopolitical risk, we voiced our rather than as part of a list of candidates. 昀氀agged the wider macro environment We therefore voted against the proposal concerns and typically voted against when as challenging. The company took and raised our concerns in a follow-up full-time executives take on more than one the investor feedback on board and engagement with the company. We also non-executive role, or when non-executive decided to scrap the additional stretch 昀氀agged this corporate governance risk directors take on too many appointments mechanism while also phasing in the with our investment professionals. in public and private companies. executive increases over a longer time period. We therefore decided to support the remuneration policy at the general meeting. Allianz Global Investors Sustainability and Stewardship Report 2023 68