AllianzGI calls for UK and EU large caps to link pay to ESG

It follows annual analysis of how it voted at AGMs around the world, with the active manager voting on almost 110,000 shareholder and management proposals last year.

In 2021, AllianzGI participated in 10,190 shareholder meetings and voted against, withheld or abstained from at least one agenda item at 68% of all meetings globally.

In the UK, the asset manager opposed just 4% of all proposals down from 5% in 2020 and part of a gradual decline in recent years. It said this trend highlights strong corporate governance standards in the UK and shows boards are well supported.

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Other countries did not fare so well, however, as it opposed 32% of proposals in Italy and Japan and 40% in the US last year.

As such, the manager has made several amendments to its voting policy for 2022, including strengthening its global corporate governance guidelines with regards to sustainability-related issues, including linking executive pay to ESG KPIs.

It has also strengthened voting rules for ethnic diversity in the UK and US, making it clear that it expects companies to come up with a diversity approach that goes beyond gender.

Virginie Maisonneuve, global chief investment officer for equity at Allianz Global Investors, said: "The UK continues to lead the way in corporate governance standards, with our analysis demonstrating the UK has strong leadership.

"Proxy voting is a core part of AllianzGI's stewardship process, and as an active investor it is essential that we exercise our voting rights as we have a duty to our clients and want to ensure that our investee companies are aligned with our company values."

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Matt Christensen, global head of sustainable and impact investing at Allianz Global Investors, added: "As an active investor, exercising our voting rights is one of the most powerful tools we have to effect change.

"In keeping with our desire to shape a more sustainable future with measurable positive outcomes, we want to ensure that our investee companies align their executive remuneration policies with ESG KPIs and we will vote against those that don't."

Following the annual analysis, AllianzGI found that the subject of compensation-related management proposals was the most contentious area, as it voted against 47% of all such proposals globally. In the UK this figure stood at 20%, up from 12% in 2020. Although this was more in line with previous years.

In 2021, the asset manager changed its guidelines to scrutinise generous pay proposals on a case-by-case basis whenever companies in receipt of state aid made substantial lay-offs or cut dividends due to the Covid-19 pandemic.