KCGS 한국ESG기준원

Of the 2,229 items reviewed by the KCGS, 354 or 15.9% of them received a negative voting recommendation. The number of firms that received at least one negative voting recommendation amounted to 188 or 62.7%. The ratio of negative voting recommendations slightly increased compared to last year’s figure(14.2%). This is attributable to the amendment to the agency’s proxy voting guidelines concerning director compensation, which raised the ratio of negative voting recommendations in the pertinent category from 2.1 % to 27.1% year on year. The following details key reasons behind negative voting recommendations and the characteristics observed in this year’s proxy season.



(Election of directors) The KCGS issued negative voting recommendations against 14.2% of the proposals of electing directors (111 out of 782), mostly against independent director nominees.

(Auditing body) With regards to the auditing body, out of a total of 318 proposals of electing an auditing body (auditor or audit committee member), the KCGS issued negative vote recommendations against 58 of them or 26.7%.

(Amendments to articles of incorporation) 284 corporations proposed to amend their articles of incorporation this proxy season. Of these, 21 firms or 6.4% received a negative voting recommendation from the KCGS on grounds of potential violation of shareholder rights and deteriorated firm value.

(Director remuneration cap) As for director compensation, due to the agency’s proxy voting guidelines update, the ratio of negative voting recommendations in this category surged to 27.1% from 2.1% last year.

(Dividends) In this proxy season, 307 proposals were tabled to seek the approval of financial statements and dividends. The KCGS opposed 21 proposals or 6.8% citing the dividend is ‘too small,’ up from last year (5 proposals).



* For a full article, please see the attachment.