Silicon Valley and S&P 100: A Comparison of 2024 Proxy Season Results

In the 2024 proxy season, 149 of the technology and life sciences companies included in the Fenwick – Bloomberg Law Silicon Valley 150 List (SV 150) and all of the companies in Standard & Poor’s (S&P 100) held annual meetings. Generally, such annual meetings will, at a minimum, include voting with respect to the election of directors and ratification of the selection of the auditors of the company’s financial statements. Fairly frequently, it will also include an advisory vote with respect to named executive officer compensation (say-on-pay).

Annual meetings also increasingly include voting on one or more of a variety of proposals that may have been put forth by the company’s board of directors or by a stockholder that has met the requirements of the company’s bylaws and applicable federal securities regulations.

This post summarizes key developments relating to stockholder voting at annual meetings in the 2024 proxy season among the SV 150 and S&P 100.[1]

Significant Findings

Our 2024 Proxy Season Results Survey shows:

• Annual meeting participation was relatively consistent with 2023 participation. Stockholder support for directors remained high for both SV 150 and S&P 100 companies. SV 150 companies saw an increase in average stockholder “say-on-pay” support following four straight years of declining support and S&P companies saw a continuing increase in support for these proposals.
• The number of stockholder proposals saw a slight decrease in 2024 for the SV 150, while the number of stockholder proposals decreased significantly for the S&P 100, primarily as a result of a significant decrease in governance-related stockholder proposals. The SV 150 saw an overall increase in stockholder support for such proposals, while the S&P 100 saw an overall decrease in support.
• Even the smaller public companies in Silicon Valley are not immune to stockholder pressures. However, the majority of stockholder proposals in 2024 were aimed at the largest Silicon Valley companies. As companies grow larger, it is more likely they will come into the crosshairs of stockholder activists that make proposals.

Other Key Findings

Director Elections

• In the SV 150, the median of the average percentage of votes for (as opposed to votes against or withheld) each company’s nominees was 95.9%, ranging from 63.8% up to 99.8% on average who voted for the board-sponsored nominees (compared to a median of 96.4% and range of 73.2% to 98.9% in the S&P 100).
• There were 149 uncontested elections of directors in the SV 150 (and 98 in the S&P 100). Since they were uncontested, election of the board-nominated candidates was generally not in doubt, subject only to any applicable majority voting policy.
• In the 2024 proxy season, only two companies in the SV 150 (zero in the S&P 100) had one or more directors who received more “against” or “withheld” votes than “for” votes in uncontested elections.

Say-on-Pay

• SV 150 companies and S&P 100 companies both saw an increase in support for their say-on-pay proposals in 2024. Seven SV 150 companies failed their say-on-pay votes compared to nine failures in 2023, and the average percentage of votes “for” of shares cast (ignoring broker non-votes and abstentions) for say-on-pay proposals was 87.0%, compared to 84.8% in 2023.
• Two S&P 100 companies failed their say-on-pay vote in 2024, compared to four in 2023. The average percentage of votes “for” of total votes cast (ignoring broker non-votes and abstentions) for say-on-pay proposals increased from 86.7% in 2023 to 88.3% in 2024.
• Opposition to named executive officer compensation reached 15% or more of votes cast (ignoring abstentions and broker non-votes) at 30.2% of SV 150 companies (compared to 17.9% of S&P 100 companies). Within those SV 150 companies with relatively lower levels of support, opposition reached 30% or more at 13 companies (of which 10 had opposition of 40% or more, including seven companies where opposition exceeded 50%), down from 18 companies in 2023.

Auditor Ratification

• A total of 149 companies (out of 149) in the SV 150 and 99 (out of 100) companies in the S&P 100 that held annual meetings in the 2024 proxy season included auditor ratification among the matters being voted upon by stockholders.
• Among SV 150 companies, 12.7% had 5% or more shares that voted against or abstained with respect to auditor ratification compared to 14.9% in the 2023 proxy season and 15.4% in the 2022 proxy season. (1.3% of companies had 10% or more shares that voted against/ abstained in 2024 compared to 2.0% in 2023 and 1.4% in the 2022 proxy season).

Other Proposals Voted On

The total number of proposals on which SV 150 companies voted decreased by 0.3% in 2024. In the S&P, the total number of proposals voted on decreased by 11.3%, driven primarily by a decrease in say-on-frequency proposals.

Company Proposals

• Excluding the director elections, say-on-pay (and say-on-frequency) and auditor approval voting covered above, stockholders at SV 150 companies voted on 112 company-sponsored proposals in the 2024 proxy season, primarily on compensation-related subjects, as well as some governance and general business matters (compared to 61 such proposals at S&P 100 companies).

Stockholder Proposals

• The stockholder-sponsored proposals voted on in the SV 150 generally focused on governance matters or policy issues (this was also true in the S&P 100). They were also generally unsuccessful (only five succeeded in 2024 compared to two in 2023).
• The average support for stockholder proposals increased in 2024 at SV 150 companies and decreased at S&P 100 companies. Among the SV 150 companies, average support increased from 15.3% to 20.4% (and decreased from 19.2% to 17.1% at S&P 100 companies). Average support at SV 150 companies decreased for compensation and policy proposals and increased significantly for governance proposals. Average support at S&P 100 companies decreased for compensation and policy proposals and increased for governance proposals.
• The most common topics for stockholder proposals in the SV 150 were human rights (seven proposals, none of which succeeded), anti-discrimination/diversity (seven proposals, none of which was successful) and environmental/sustainability (six proposals, none of which succeeded).
• The most common such topics in the S&P 100 involved environmental sustainability (58 proposals, none of which succeeded), anti-discrimination/diversity (42 proposals, none of which succeeded), political/lobbying activities (38 proposals, none of which succeeded) and human rights (37 proposals, none of which succeeded).

Annual Meeting Participation

• An average of approximately 87.0% of shares of SV 150 companies were represented in person or by proxy at company annual meetings. In addition to the approximately 13.0% that were not represented, approximately 9.0% of eligible shares were represented via proxy by brokers who did not receive instructions as to voting for the bulk of matters for which broker discretionary voting is not permitted (so-called “broker non-votes”). This compares to approximately 14.6% not represented and approximately 10.6% broker non-votes in the S&P 100 in the same period. Annual meeting participation rates were roughly similar to 2023 levels for both SV 150 and S&P 100 companies.
• The ranges of representation and voting were somewhat broader in the SV 150 than the S&P 100 (e.g., 53.7%–99% represented in the SV 150, compared to 66.6%–96.7% represented in the S&P 100 and 22.8%-98.1% voting in the SV 150, compared to 54.6%-93.0% voting in the S&P 100).

In a number of instances, the report also presents data showing comparison of the top 15, top 50, middle 50 and bottom 50 companies of the SV 150 (in terms of revenue),[2] allowing for a more carefully tailored view of the activity and results as they are impacted by company size or scale, as well as more relevant comparison to peers (i.e., the S&P 100 compared to their peers in the top 15 of the SV 150).

The complete publication, which includes additional details on proposal categories and voting results, is available: 2024 Proxy Season Results in Silicon Valley and Large Companies Nationwide.

Endnotes: 

1 To be included in the data set for a particular “proxy season,” the definitive proxy statement for a company’s annual meeting generally must have been filed by the company with the Securities and Exchange Commission by June 30 of that year (i.e., the proxy statements included in the 2024 proxy season survey were generally filed with the SEC from July 1, 2023 through June 30, 2024 for the 2024 proxy season), irrespective of when the annual meeting was actually held (the annual meetings were usually held about two months following the filing of the proxy statement).(go back)

2 The top 15, top 50, middle 50 and bottom 50 companies of the SV 150 include companies with revenue in the following respective ranges: $26.5B or more; $3B to $26.5B; $653M to $3B; and $212M to $653M. The respective average market capitalizations of these groups are $583.9B, $218.8B, $8.5B and $2.5B.(go back)