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APG Asset Management

PRI reporting framework 2018

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You are in Direct - Listed Equity Active Ownership » (Proxy) voting and shareholder resolutions

(Proxy) voting and shareholder resolutions

Overview

LEA 15. Voting policy & approach

New selection options have been added to this indicator. Please review your prefilled responses carefully.

15.1. Indicate whether your organisation has a formal voting policy.

15.2. Indicate what your voting policy covers:

15.3. Attach or provide a URL to your voting policy. [Optional]

15.4. Provide a brief overview of your organization’s approach to (proxy) voting.

The right to vote is an essential part of a well-functioning corporate governance system and APG therefore exercises this right, wherever possible, at all companies in which it invests. Voting decisions are primarily based on investment considerations. When deciding how to vote, APG takes into account the specific context and market in which the company is domiciled.

The underlying principles of the voting policy are:

  • Optimise returns for shareholders
  • Accountability
  • Transparency
  • One share, one vote
  • Informed votes

We work with our proxy research provider to implement APG's detailed voting policy for the majority of company meetings via their electronic voting platform. We have centralised voting activities in-house to ensure that votes are consistent across all funds in order to send one single message to companies. APG actively seeks input from external managers when voting in markets where they have specialist expertise.

APG actively votes on shareholder proposals. We carefully consider every proposal and support proposals we believe are in the interest of the company and its shareholders. In general, APG supports resolutions that seek to generate greater transparency and accountability about how companies address key environmental and social issues, and/or bring corporate governance into line with best practices.


Process

LEA 16. Typical approach to (proxy) voting decisions

16.1. Indicate how you typically make your (proxy) voting decisions.

Approach

Based on

16.2. Provide an overview of how you ensure your voting policy is adhered to, giving details of your approach when exceptions to the policy are made (if applicable).

APG's dedicated Global Responsible Investment & Governance Team centrally coordinates, oversees and controls the exercise of all equity voting rights globally. We have implemented APG's detailed Voting Policy in our electronic proxy voting system which automatically instructs our votes in line with our Responsible Investment and Governance Policies. In addition, voting items are assessed on a case-by-case basis taking into account each company's unique circumstances and we will, often in consultation with the relevant portfolio managers, override the custom instructions if deemed appropriate, and provide a written rationale for the override decision.

16.3. Additional information.[Optional]


LEA 17. Percentage of voting recommendations reviewed (Not Applicable)


LEA 18. Confirmation of votes

New selection options have been added to this indicator. Please review your prefilled responses carefully.

18.1. Describe your involvement in any projects to improve the voting trail and/or to obtain vote confirmation .

          We discuss the process and potential improvements with our custodians and service providers on an on-going basis. We have identified a number of areas that could be improved and as a result have developed a method that will confirm our votes in part of the voting chain between the voting platform operator and its service providers in the local markets. In addition, we are involved in exploring and providing input into new digital ways of proxy voting at the annual general meetings of the companies in our portfolio directly while circumventing the traditional voting chain.
        

18.2. Additional information. [OPTIONAL]

          
        

LEA 19. Securities lending programme

New selection options have been added to this indicator. Please review your prefilled responses carefully.

19.1. Indicate if your organisation has a securities lending programme.

19.2. Describe why your organisation does not lend securities?

APG does not have a securities lending programme because it is not involved in securities lending.

19.4. Additional information.

          
        

LEA 20. Informing companies of the rationale of abstaining/voting against management

New selection options have been added to this indicator. Please review your prefilled responses carefully.

20.1. Indicate whether you or the service providers acting on your behalf raise any concerns with companies ahead of voting

20.2. Indicate whether you and/or the service provider(s) acting on your behalf, communicate the rationale to companies, when , you abstain or vote against management recommendations.

          APG discusses its voting decisions with some companies in advance of or after the annual general meeting but we do not systematically inform all companies. Before the vote is cast: We communicate to selected companies on the basis of the size of our stake, the issue at hand, and the general intensity of our dialogue with the company at the time.  

After the vote is cast: We disclose all our voting decisions through our public voting disclosure tool on APG's website: https://www.apg.nl/en/asset-management/responsible-investing, and we write to some companies to inform them of how we voted.
        

20.3. Additional information. [Optional]


Outputs and outcomes

LEA 21. Percentage of (proxy) votes cast

21.1. For listed equities where you and/or your service provider have the mandate to issue (proxy) voting instructions, indicate the percentage of votes cast during the reporting year.

Votes cast (to the nearest 1%)

98.5 %

Specify the basis on which this percentage is calculated

21.2. Explain your reason(s) for not voting certain holdings

21.3. Additional information. [Optional]

There are impediments to exercising our voting rights which we actively seek to address. This includes the practice of share blocking in certain markets whereby one cannot trade in company shares when voting, or cumbersome share re-registration procedures. APG has been engaging with companies, investors and policymakers alike to change this and as a result we face this issue less frequently, but the proxy voting chain can be optimised further. To date we cannot always be sure that our vote reaches the company correctly or indeed at all. APG is actively working with custodians, companies and investors, as well as policymakers, to address these shortcomings. In 2017, we did not cast a vote on ~1.5% of the ballots that we could have voted for the above reasons.


LEA 22. Proportion of ballot items that were for/against/abstentions

22.1. Indicate if you track the voting instructions that you and/or your service provider on your behalf have issued.

22.2. Of the voting instructions that you and/or third parties on your behalf issued, indicate the proportion of ballot items that were:

Voting instructions
Breakdown as percentage of votes cast
For (supporting) management recommendations
78 %
Against (opposing) management recommendations
19 %
Abstentions
3 %
100%

22.3. Describe the actions you take in relation to voting against management recommendations.

          APG discusses its voting decisions with some companies in advance of or after the annual general meeting but we do not systematically inform all companies. Before the vote is cast: We communicate to selected companies on the basis of the size of our stake, the issue at hand, and the general intensity of our dialogue with the company at the time. After the vote is cast: We disclose all our voting decisions through our public voting disclosure tool on APG's website: https://www.apg.nl/en/asset-management/responsible-investing, and we write to some companies to inform them of how we voted.
        

22.4. Additional information. [Optional]

APG's voting decisions are based upon its voting policy which is part of the APG Corporate Governance Framework, available at the APG website: https://www.apg.nl/en/publicatie/corporate-governance-framework/174.


LEA 23. Shareholder resolutions

New selection options have been added to this indicator. Please review your prefilled responses carefully.

23.1. Indicate if your organisation directly or via a service provider filed or co-filed any ESG shareholder resolutions during the reporting year.

23.2. Indicate the number of ESG shareholder resolutions you filed or co-filed.

6 Total number

23.3. Indicate what percentage of these ESG shareholder resolutions resulted in the following.

Went to vote

100 %
Were withdrawn due to changes at the company and/or negotiations with the company
0 %
Were withdrawn for other reasons
0 %
Were rejected/not acknowledged by the company
0 %
Total 100%

23.4. Of the ESG shareholder resolutions that you filed or co-filed and that were put to vote (i.e. not withdrawn) how many received:

1 >50%
5 50-20%
<20%

23.5. Describe the ESG shareholder resolutions that you filed or co-filed and the outcomes achieved.

The resolutions below are all part of the voto di lista process in Italy, led by Assogestioni, in which minority shareholders propose their own candidates to the board of directors and/or the board of statutory auditors. APG co-filed shareholder proposals at the following companies in 2017 with candidates being appointed in all cases (even without the absolute majority vote):

  • Enel S.p.A
  • ENI S.p.A.
  • Mediobanca S.p.A.
  • Poste Italiane S.p.A.
  • Telecom Italia S.p.A.

Additionally, we co-filed an environmental shareholder proposal at ExxonMobil at the end of 2016 which was voted on during the 2017 voting season and received 62% support.

23.6. Describe whether your organisation reviews ESG shareholder resolutions filed by other investors.

23.7. Additional information. [Optional]


LEA 24. Examples of (proxy) voting activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

24.1. Provide examples of the (proxy) voting activities that your organisation and/or service provider carried out during the reporting year.

ESG Factors
ESG issue
          Remuneration based on performance indicators unrelated to the executives’ performance.
        
Conducted by
Objectives
Scope and Process

At the shareholders' meeting we voted against the proposal for the approval of the remuneration policy. Because the remuneration policy takes too little account of the performance of the CEO and the company, we decided to vote against the remuneration policy. 

Outcomes

The remuneration policy received a large percentage of votes against from shareholders.

ESG Factors
ESG issue
          Lack of time-bound, quantitative targets for more energy efficiency and the use of renewable energy.
        
Conducted by
Objectives

Get the company to evaluate the possibility of including time-bound, quantitative targets for the entire company for more energy efficiency and the use of renewable energy and therewith contribute to reducing energy costs and exposure to energy price volatility, energy availability, and a reduction in CO2 emissions.

Scope and Process

At the shareholder meeting of the company, a shareholder proposal was put on the agenda asking the company to evaluate the possibility of including time-bound, quantitative targets for the entire company for more energy efficiency and the use of renewable energy.

Outcomes

40% of the company’s shareholders supported the resolution. 

ESG Factors
ESG issue
          Executive remuneration
        
Conducted by
Objectives

Appropriate quantum of executive remuneration and more disclosure. 

Scope and Process

We met with the company and sent a letter to (re-)emphasize our policies and views on corporate governance and expressed our concern regarding the appropriate quantum of incentives for the company’s executives. Our suggestion was that the board assembles as many relevant case studies as possible, which should not be limited to the sector peers in the market, for reference by both the board and shareholders. Regarding the company’s extent and means of remuneration disclosure we suggested the board to enhance the quality of disclosure on performance measures for variable remuneration. Lastly, we voted against the company’s executive remuneration report at the company’s AGM

Outcomes

At the company’s AGM, more than 25% of the shareholders voted against the executive remuneration report.

24.2. Additional information. [Optional]


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