The World Of Shareholder Meetings
An Interview With Michael Mackey, President, Alliance Advisors, LLC
MICHAEL, IT HAS BEEN AWHILE SINCE OUR LAST INTERVIEW WITH YOU. CAN YOU GIVE US AN UPDATE ON HOW THINGS ARE GOING AT ALLIANCE ADVISORS?
Since the last interview four years ago, Alliance Advisors has experienced exceptional growth in the proxy solicitation and governance advisory arena. Our growth has not only been in the number of corporations we have contracted with, but also in the expansion of the services we provide our clientele. These include proxy solicitation, governance advisory, proxy management, market surveillance, not to mention the work we do for the mutual fund industry. Fortunately for us, many of our clients utilize multiple services in accordance with our business model. This is why we consider Alliance a multi-faceted shareholder communications firm rather than a conventional proxy solicitor.
CAN YOU TELL US MORE ABOUT YOUR BUSINESS MODEL?
Proxy Solicitation is our core business and is often the driver for these other services. While governance advisory, proxy management and market surveillance are standalone business lines, many of the clients for these services are the result of our proxy solicitation relationships. This diversification of complementary proxy services is welcomed by our clients and many continue to enjoy the cost and operational benefits. The goal of Alliance is to provide corporations with high level consulting, governance driven proxy solicitation and support services that reduce costs and streamline the shareholder meeting process.
SINCE YOU SAY PROXY SOLICITATION IS YOUR CORE BUSINESS, WHAT DIFFERENTIATES ALLIANCE?
First are our people and their experience. In fact, the top 15 executives at our firm have an average of 20 years of experience in the proxy and governance business – so not only do we have experience but also a deep bench. The second differentiator is having a separate Governance Advisory Group which consists of four former ISS executives and compensation consultants who support our Proxy Solicitation Group. Their fields of expertise include equity compensation, proxy contests, M&A, shareholder proposals and the policies of ISS and Glass Lewis. These two factors have resulted in Alliance building a client base of 300 proxy solicitation and 65 year round consulting clients, as well as becoming one of the leading firms in the industry - both of which were accomplished in a very short timeframe.
YOUR INTERVIEWER OFTEN WRITES ABOUT RETAIL VOTING. AS A PROXY SOLICITOR, CAN YOU TELL US ABOUT THE WORK ALLIANCE DOES IN THIS IMPORTANT AREA?
This is the third distinction for Alliance as a proxy solicitor. Our in-house 100 seat call center not only conducts the retail investor campaigns we do annually for our corporate clients, but also for the mutual funds we service whom typically require much larger call campaigns. This allows Alliance to keep the best telephone representatives on staff year round which increases quality, productivity and effectiveness. This year, Alliance contacted 1.3 million individual investors during the more than 100 call campaigns we conducted on a variety of proxy issues. These large campaigns require detailed shareholder analytics to develop a strategy that focuses the solicitation effort on the most productive and cost effective share range levels. Also, our state-of-the-art technology and stand-alone systems allows Alliance to manage these tremendous volumes and multiple assignments simultaneously.
HOW HAS THE PROXY SOLICITATION BUSINESS EVOLVED OVER THE YEARS?
It has changed tremendously - a proxy solicitor is far more of an advisor these days providing research, strategy and consultation which often involves identifying potential issues while the proxy statement and CD&A are still being crafted. Alliance has been ahead of this evolution by building an excellent relationship with the investment community, preparing our clients for the engagement process and being active participants in the dialogue with their investors. The strength of our relationships stems from Alliance having robust and meticulously maintained databases, extensive knowledge of institutional investor voting policies and the ability of our executives to converse intelligently on the same level with these institutions. These capabilities have drawn both the appreciation and respect of the investment community and our clients. Alliance is proud to be part of the proxy solicitation business because, as an industry, we provide Corporate America with a tremendous amount of shareholder intelligence.
WE ARE ALSO VERY INTERESTED IN YOUR PROXY MANAGEMENT SERVICE. IS THIS SOMETHING THAT IS UNIQUE TO ALLIANCE?
Yes. We believe that Alliance is the only proxy firm that offers such a comprehensive service offering. Our proxy management program is a single source solution to manage the entire shareholder meeting process, whether the client selects to use Full Set Delivery or Notice Only. This includes the broker search, printing of all shareholder documents, web hosting and document posting, mailing and distribution, vote tabulation and invoice processing. Our Proxy Management Group understands the shareholder base from a voting perspective so they guide our clients with selecting the best model in order to maximize voter response and cost effectiveness. We currently serve 130 corporations with our proxy management program and 50% of these clients also use Alliance as proxy solicitor – which illustrates our service diversification focus. This business has grown exponentially because it takes a tremendous amount of workload off the client and reduces their overall shareholder meeting costs.
CAN YOU DESCRIBE THE SURVEILLANCE PROGRAMS THAT YOU OFFER AND THEIR BENEFITS?
Alliance launched our Market Surveillance program which provides corporations with a clear grasp of the capital markets and a thorough understanding of who owns their stock and the institutional investors who are buying and selling on a real-time basis. Our other program is Activist Watch which identifies creeping accumulations by activist investors and hedge funds that practice shareholder activism. This intelligence is also beneficial to our Proxy Contest/M&A Group in a proxy fight or merger transaction because it enhances our ability to identify proxy votes from institutional investors and determine which custodian is used by the activist investor.
MICHAEL, THE FUTURE SEEMS BRIGHT FOR ALLIANCE – DO YOU HAVE ANY FINAL COMMENTS?
Besides building our firm around a strong corporate governance practice, another major reason for our ability to attract so many companies is our service levels. Client service is a significant hallmark of Alliance which is why we have added some of the largest and most recognizable corporate names to our client roster. Since our inception, we have consistently been ranked among the top proxy solicitation firms in the industry for client satisfaction - which is even more impressive considering our rapid growth. Our clients have been both loyal and an excellent source of referrals for us because of our customer oriented approach to the business, addressing the needs of our clients and dealing with their shareholders in a professional manner. You are certainly right, the future does look bright.