TheCorporateCounsel.net

Over on CompensationStandards.com, I recently highlighted an interesting trend identified by Exequity: ISS’s adverse say-on-pay recommendations tend to spike in June. Exequity has now published additional data that shows this “June Phenomenon” also applies to director elections. Here’s an excerpt:

But the June Phenomenon for directors has an added twist: The trend of adverse recommendations in June appears to be increasing over time, whereas with say on pay the “Against” rate has been stable. In 2015 and 2016, the average rate in June was below 15%, and beginning in 2018, the recommendations “Against” have been above 20%. It is unclear what has caused the increase in “Against” recommendations during this time. Recommendations “Against” in other months have trickled up slightly, from 8% to 10%.

Unlike say on pay, votes for directors are not advisory and over the past 10 years, less than 0.1% of director nominations have failed. Failures in June appear equally likely as in other months, and Exequity finds no discernible trend in the number of companies with directors failing to be re-elected.

On average since 2015, directors have received 96% support when ISS recommends “For” and 83% when “Against.” Average support for directors when ISS recommends “Against” has trickled 1.7% higher since 2015 (from 82.4% in 2015 to 84.2% in 2025), but average support when ISS recommends “For” trickled down by 1.6% (from 97.6% in 2015 to 96.0% in 2024).

The cause of the June spike isn’t clear – and it’s probably not worth getting too neurotic over it. But with June being a popular time for annual shareholder meetings, a significant number of companies could be affected. Those with meetings this month may want to pay extra attention to proxy advisor expectations – if for no other reason than to avoid surprises.

– Liz Dunshee