Fund manager Allianz Global Investors has announced it will vote against directors of large cap European companies that fail to link executive pay policies to ESG performance metrics.

In a February 21 media release, Allianz revealed its latest annual analysis of its voting record at annual meetings, and introduced a new stewardship policy that will see the fund manager vote against the directors of high-emitting companies with insufficient net-zero targets and disclosures from 2024.

Allianz stated that it voted against 43% of compensation-related proposals, particularly at companies that failed to support the packages with robust targets and sufficiently transparent key performance indicators. In the U.S. alone, Allianz voted against 78% of compensation-related proposals.

“We often had concerns on transparency,” explained Antje Stobbe, head of stewardship at Allianz. “In particular when it came to clearly disclosing the link between performance and pay-out, as well as discretionary pay components that were not backed by performance as well as high pension payments.”

Stobbe added that Allianz expects high emitting companies to share their net-zero strategy with shareholders.

“As of 2024, depending on the set-up of the board [Allianz] will vote against the chairperson of the sustainability committee, the strategy committee or the chairperson of the board of certain high-emitting companies if the net-zero ambitions or the climate-related financial disclosures are deemed dissatisfactory,” the company concluded.