01 Our sustainability approach 02 Sustainable investing 03 Active stewardship 04 Corporate sustainability 05 Appendix 03.4 Engagement outcomes Principles 7 9 Engaging Swedish companies on may impact their ability to dedicate governance practices sufficient time and energy to fulfil Shaping sustainable pathways towards change In 2022, we voted against 29% of director their duties. This often extends to the elections at Swedish companies. While we chairperson. Second, we found that many appreciated that most companies have boards and committees are not sufficiently Improving board structure started to unbundle directors’ elections independent due to long tenure and allowing us to assess board candidates shareholder representation. This remained and executive pay with a US on a case-by-case basis, we still have a major reason for us to cast dissent votes. two main issues which impact the quality As we found this to be prevalent in the construction company of boards and prompted many against Swedish market, we started a broader votes. First, directors often have various engagement campaign and sent letters Following up on a failed Say on Pay this could imply informal balance other commitments at boards and/or to our investee companies detailing vote at the AGM, we engaged the of executive power that is not executive level of private and public our governance expectations. We will Compensation Committee of a US transparent. Additional outcomes companies. We are concerned that this continue our engagement in 2023. construction company to encourage requested include the introduction certain governance improvements. of a more challenging vesting We met virtually with the committee scale for the long-term incentive chair. The company committed plan. Our conclusion following this to reduce the gap between pay engagement was that the board, via levels of the chairman and the CEO, the actions taken by the Compensation a key request from us to improve Committee, met our expectations governance. Our expectation is that for responsiveness to shareholder the lead executive role commands concerns. Their action resulted in the highest pay. Lack of clarity on material improvements to governance. Allianz Global Investors Sustainability and Stewardship Report 2022 81