We recently surveyed 1,000 customers about shareholder rights. We share the results and provide some key tips for investors.
Tips for shareholder rights & results from our customer poll
Many shareholders are put off from voting and attending Annual General Meetings (AGMs) as they don’t feel their vote will make a difference, according to a poll we ran.
We surveyed more than 1,000 customers which showed a third (33%) of shareholders don’t vote on company resolutions, with six in 10 (59%) saying they don’t feel their vote would make a difference. Other reasons people don’t vote are because they find the system difficult to understand (18%) or don’t have enough time (17%). However, one in six (16%) said they weren’t aware they could vote.
However, when voting, company pay tops the list of issues that shareholders feel most strongly about. When asked what the single biggest issue is that they would be interested in voting on, over a quarter (28%) of shareholders picked remuneration and a further 17% specifically chose bonuses.
Mergers and acquisitions (M&A) also scored highly, with just over a fifth (21%) choosing this as a topic they’d be most interested in voting on.
Other areas shareholders would want to voice their opinion on include:
- Health and wellbeing (25%)
- Weapons (22%)
- Equality and diversity (22%)
- Animal testing (21%)
79% of shareholders do not attend AGMs of companies they invest in. Many cite a similar reason to those who don’t exercise their right to vote, with just under half (45%) saying they would attend meetings if they thought it would make a difference. Three fifths (60%) say they would be more likely to attend an AGM in future if it was easier to get to, while just under half (47%) would attend if there was an issue they felt strongly about and wanted to voice their view on it.
Of the 21% of shareholders that do attend AGMs, the top reasons are to gather information on company performance (68%) and exercise their right to vote on company resolutions and elections of directors (50%). Over a third (36%) say they go to annual meetings because they want to raise questions to the board, while over a quarter (29%) go along to meet other shareholders.
Many want help to better understand their rights
Shareholders’ knowledge of their rights is mixed. 31% say they know their rights and the processes involved, while half (49%) know some of their rights but need additional help to understand what to do to receive information or vote. One in five stated they don’t know what their rights are as a shareholder.
While the majority of investors take some interest in their rights, only 7% of shareholders would say they are very engaged and attend AGMs regularly and vote on issues they are passionate about. One in five say they are not interested in their shareholder rights and just invest to make money.
It’s disappointing to hear so many shareholders don’t feel like their vote would make a difference when so many are investing their hard earned money. It’s more important than ever for shareholders to exercise their rights and vote, especially on topics and issues they are passionate about. Over the years we’ve seen shareholders become disengaged with the companies they invest in but they should know their votes can shape a lot of important decisions. It’s clear from our research that more needs to be done to educate some shareholders on what rights they have, how they can exercise them, the challenges that can be made to a company and encouraging them to vote. We surveyed 1,557 customers of ours in December 2014 and results showed that 22.28% of customers do not vote at annual general meetings because they feel their vote won’t make a difference, in 2019 however 59.31% don’t vote for this reason
Our top three tips on shareholder rights:
- Every investor in a UK listed company is entitled to receive company communications such as the annual reports and accounts, corporate action documents and notices of general meetings and it is a very simple process to opt in for these
- Gaining entry to shareholder meetings is straightforward, but it is something you need to request attendance for in advance, usually at least four working days, so plan ahead
- Investors may not realise that they can vote at a shareholder meeting without attending. Again, the deadline for voting will likely be a few days before the meeting, so make sure you plan in time for that
All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.