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For the purposes of this report, Lexis+® UK Practical Guidance and Market Standards have carried out research to examine shareholder voting trends from the 2024 annual general meeting (AGM) season. The AGM season has been defined as the period in which AGMs were held by FTSE 350 companies with a financial year end from 1 April 2023 to 31 March 2024, where the meeting was held before 30 September 2024.

During the 2024 AGM season, 265 Notices of AGM were disclosed for the FTSE 350 (100 FTSE 100; 165 FTSE 250).

To be included in this report, a company must have been listed on the FTSE 350 at the date of the end of its financial year. The index segment of each individual company at their financial year-end determines their index category for our research, whether or not there has been any subsequent movement into, out of or between indices. Our research also excludes closed-ended investment companies. As a result, the total number of companies included as FTSE 100 and FTSE 250 may not add up to 350 in total.

Data for this report has been sourced from the Market Standards transaction data analysis tool, which allows users to access, analyse and compare the specific features of corporate transactions.

The percentages included in this report have been rounded up or down to one decimal place, as appropriate.

Out of the 265 companies analysed, nine companies (FTSE 100: 2, FTSE 250: 7) received at least one failed resolution (3.4%), which is a slight decrease from the 2023 AGM season (when 11 FTSE 350 companies experienced one or more failed resolutions).

Two companies, and , experienced two or more failed resolutions in the 2024 AGM season (and both of these companies also experienced two or more failed resolutions in the 2023 season). saw a greater level of dissent this year with three failed resolutions (to re-elect a director, to grant the directors’ authority to allot shares and to grant the directors’ authority to disapply pre-emption rights) compared to just two failed resolutions last season (to authorise the director to allot shares and to empower the directors to disapply pre-emption rights). witnessed a lower level of dissent this year, with two failed resolutions this season (directors’ power to allot shares disapplication of pre-emption rights) compared to four failed resolutions in the previous season (directors’ power to allot shares, disapplication of pre-emption rights, further disapplication of pre-emption rights and make market purchase of own shares).

The most common types of failed resolution this season were the disapplication of pre-emption rights and shareholders’ requisitioned resolutions (three of each). This was consistent with trends seen last season, where the disapplication of pre-emption rights resolution was also the most common failed resolution. Additionally, there were two failed resolutions in each of the following categories; the same number as last season:

• to re-elect/elect directors
• to approve directors’ remuneration reports
• to give authority to allot shares each saw two failures this season, showing no changes in the number of failed resolutions in these categories compared to the 2023 season

Failed resolutions were spread across industry sectors, with no single industry sector overwhelmingly dominating the list.

The Travel, Hospitality, Leisure & Tourism industry sector saw the highest number of companies experiencing failed resolutions, with two companies in this sector ( and ) having one or more failed resolutions. , in particular, had two failed resolutions related to the disapplication of pre-emption rights and authority to allot shares.

This was followed by the Mining, Metals & Extraction sector, where experienced three failed resolutions, making it the company with the most failed resolutions in that sector (and the most failed resolutions this season).

The Financial Services and Food & Beverages sectors also experienced failed resolutions, with and both having failed directors' remuneration report resolutions. The Energy sector had one failed resolution at , which related to shareholder requisitioned resolutions.

Of the 265 companies analysed in the 2024 AGM season, the total number of companies in the FTSE 350 receiving significant no votes¹ against at least one resolution was 37 (FTSE 100: 11, FTSE 250: 26), with a combined total of 60 resolutions receiving significant no votes. This represents a significant decrease since the 2023 AGM season of:

• 20% in the number of resolutions attracting significant dissent (down from 75 last season)
• 26% in the number of companies experiencing significant dissenting votes against one or more resolutions (down from 50 companies last season)

The most common resolution attracting significant no votes was the re-election/ election of a director resolution (with 20 resolutions across the FTSE 350 attracting significant no votes). In second place was the directors’ remuneration report resolution (which topped the chart last season), with seven resolutions across the FTSE 350 attracting significant no votes. There were six resolutions across the FTSE 350 attracting significant dissenting votes in each of the authority to allot shares and the directors’ remuneration policy categories.

Resolutions to approve amendments to rules of the performance share plans of , , , a resolution to approve a restricted share plan of , a resolution to approve a re-adoption of long-term incentive plan by and resolutions to approve the company’s climate strategy at each of and attracted significant dissenting votes.

The number of companies experiencing significant no votes against resolutions across the FTSE 350 was at a six-year low in 2024, continuing a year-on-year trend over the last three seasons. 2021 was the peak of shareholder dissent in recent years, which could indicate increased investor dissatisfaction during the COVID-19 pandemic.

This season, we have delved deeper into the reasons for dissenting votes against:

• resolutions to re-elect directors
• resolutions to disapply pre-emption rights

Director re-election resolutions

As noted above, the most common type of resolution attracting significant dissent this AGM season, by far, was the resolution to re-elect directors (20 resolutions receiving significant dissenting votes and two failed resolutions). We were interested to look at whether the dissent could be due to any failings to comply with UK Listing Rule requirements relating to board diversity².

We noted that three companies³ cited concerns over a director’s other appointments and time commitments as a reason for voting against a director’s appointment or re-election.

At other companies, engagement with shareholders over their dissenting votes highlighted worries regarding board diversity, board composition, balance of skills and experience, length of tenure of certain directors and independence⁴.

At and , directors either chairing the remuneration committee or with remuneration expertise received significant dissenting votes at the same time as the directors’ remuneration report received significant votes against it, which would indicate overall dissatisfaction with directors’ remuneration.

In the case of , the re-election of directors received significant dissent because the directors do not hold any shares in the company.

At two companies⁵, there were significant votes against the chair of the nomination committee in combination with non-compliance with the requirements regarding board composition and diversity.

Resolutions to disapply pre-emption rights

We were also keen to look at the reasons behind shareholders voting against resolutions to disapply pre-emption rights. In particular, we wanted to see if there was a connection between such resolutions failing or receiving significant dissenting votes and the level of disapplication authority sought by the company.

Given that the (PEG) increased its percentage threshold recommendations in November 2022 (see News: ). We wondered whether our findings would show that shareholders were unhappy with companies extending their disapplication authorities in line with the expanded 2022 PEG guidelines, but this wasn’t the case. We found that only 50% of companies (3 out of 6) receiving high votes against their resolutions to disapply pre-emption rights were seeking levels of disapplication in line with the new recommendations.

We also looked at the AGM results statements and (if available) the companies’ six-month update statements to review any explanations regarding votes against the pre-emption disapplication resolutions.

In the case of , it was explained that their shareholders felt that authority to disapply pre-emption rights should be sought on a case-by-case basis rather than as a general or annual authority:

In the case of , which experienced a failed pre-emption disapplication resolution despite seeking only a 5% disapplication authority, the failure of the resolution to pass (both in 2024 and 2023) was due to an ongoing debate with a single significant shareholder that didn’t want its interests to be diluted.

Five companies withdrew at least one resolution prior to holding their AGM.

The only withdrawn resolution type was the re-election/election of a director. The reasons for such withdrawals were not disclosed in some case, but where they were disclosed included:

• the director had stepped down from the board
• health or personal reasons

This season's analysis of AGM formats revealed a range of approaches. We identified five distinct formats, breaking types of AGMs down beyond the virtual, physical, and hybrid categories:

• physical only AGM, where shareholders attend and participate solely in person with no live webcast option
• physical AGM with live webcast, where attendees attend and participate physically, but with the ability for others to remotely view a non-interactive webcast of the AGM (which does not enable virtual attendance or voting)
• hybrid AGMs, giving a dual option for in-person attendance or virtual participation with voting, question and answer capabilities in either case
• fully virtual AGMs, held exclusively online with comprehensive voting and engagement options for remote participants
• virtual AGMs with restricted physical attendance, where most shareholders attend online, but a limited number can participate in person

This variety of approaches highlights the evolving flexibility of AGMs in addressing accessibility and engagement preferences.

However, physical AGMs remained the dominant format choice, accounting for 82.3% (191 physical meetings and 27 physical meetings plus webcast), followed by hybrid at 15.5% (41), fully virtual at 1.5% (4), and virtual with restricted physical attendance being the least common at 0.8% (2).

Comparing AGM formats between FTSE 100 and FTSE 250 companies reveals a strong preference for physical meetings (including physical-only and physical plus webcast) among both FTSE 100 and FTSE 250 companies, but particularly in the FTSE 250. In the FTSE 250, 133 (89.7%) opted for this format. In the FTSE 100, it was 70 (70%).

This shows that FTSE 100 companies are more inclined towards hybrid AGMs than the FTSE 250, with 27 (27%) using this format versus 14 in the FTSE 250 (8.5%). This could indicate that the shareholders of the largest listed companies value flexibility and shareholder accessibility, but it may also reflect the higher cost and administrative burden of hosting a hybrid meeting format, both at an in-person physical venue and virtually on an online meeting platform.

Physical AGMs with a live webcast, chosen by 15 FTSE 250 (9.1%) and 12 FTSE 100 companies (12%), provide an option for remote viewing without interaction, which might appeal to shareholders interested in observing the proceedings without live active participation, perhaps having pre-submitted their proxy votes.

Just four companies (, , and ) held fully virtual AGMs (the same as last season) and two companies ( and ) held a virtual AGM with restricted physical attendance. , and also held virtual meetings in 2023. These meeting formats were rare across both groups, showing limited adoption across the FTSE 350.

We assessed the countries of incorporation of those companies adopting a virtual meeting format to see if companies incorporated outside of the UK held a higher proportion of virtual meetings, but this was not the case. Five out of the six companies holding either fully virtual meetings or virtual meetings with limited physical attendance were incorporated in England and Wales. The reasons given by these companies for holding virtual AGM were:

• increased accessibility convenience
• flexibility, and
• environmental considerations

The Lumi Global platform was the meeting platform for five out of the six companies holding a virtual meeting (or virtual plus limited physical attendance).

Our UUÂãÁÄÖ±²¥ Market Standards news analysis covers the latest developments in public company transactions and corporate governance, tailored for Corporate lawyers. The following news items are relevant to the topics covered in this report. To read more analyses on the latest developments in the market reported by Lexis+® Market Standards, subscribe to the alert (subscription required).

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