'Geosugi' Controversy Persists but Opposition Rate Drops to 10% Range
Introduced in 2018... Decrease After 4 Years Since 2020
The proportion of votes against agenda items at shareholder meetings of companies invested in by the National Pension Service (NPS) decreased last year compared to the previous year. For the first time in four years, the rate of exercising dissenting voting rights declined.
On the 14th, CEO Score, a corporate data research institute, investigated shareholder meetings where the NPS exercised voting rights from 2020 to 2023. The results showed that last year, the NPS exercised voting rights at 601 companies, a 3.7% decrease from 624 companies in 2022.
The number of shareholder meetings the NPS participated in last year was 680, down 5.2% from 717 meetings the previous year. The number of agenda items at shareholder meetings involving the NPS was 4,494 in 2020, 4,235 in 2021, 4,345 in 2022, and 4,046 in 2023.
Among these, the NPS opposition rate increased after the introduction of the Stewardship Code (active voting rights exercise by institutional investors) in 2018, rising to 11.2% (503 cases) in 2020, 11.4% (484 cases) in 2021, and 15.3% (665 cases) in 2022, before decreasing to 13.8% (560 cases) last year.
The rate of 100% approval votes increased. Last year, the NPS gave 100% approval to agenda items at 237 out of 601 companies (39.4%) where it exercised voting rights, up 3.5 percentage points from 35.9% in 2022.
Among the opposed agenda items, the opposition rate was highest for executive compensation-related items at 28.6%. The NPS opposed 251 out of 878 executive compensation agenda items last year, a 0.7 percentage point decrease from 29.3% in 2022.
This was followed by opposition rates for articles of incorporation amendments (16.2%), executive appointments (10.3%), stock options (9.8%), and financial statements (3.3%).
Opposition votes were concentrated on certain companies' agenda items. Last year, 4.7% (28 companies) of companies where the NPS participated in shareholder meetings recorded opposition rates of 50% or higher. In some cases, all agenda items were opposed.
Last year, the NPS voted against both agenda items?executive appointments and executive compensation?at the Sebang Battery shareholder meeting.
At the Daechang Forging shareholder meeting, the NPS opposed the appointment of five directors and three audit committee members out of ten agenda items.
High opposition rates were recorded for agenda items at Jinwon Life Sciences (75%), Hanil Holdings (66.7%), Korean Air (62.5%), Daesung Holdings (60%), Cuckoo Holdings (60%), Hansol Chemical (60%), Cosmo Advanced Materials (57.1%), and Cuckoo Homesys (57.1%).
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