In April, when the COVID crisis first began to be reflected in shareholder meeting proceedings, we served at three VSMs - or just 6% of the 47 companies where we served…

By the third week of May, which has now surpassed April as the biggest meeting month by far, the CTHLLC numbers jumped to 204 meetings, of which 43, or 21% were VSM

And suddenly, in just the last four business days in May, over 500 VSMs were hosted, according to data that was posted by our great friend MaryEllen Andersen of Broadridge, in the Harvard Law School Forum on Corporate Governance.

While our own share of VSM meetings rose significantly in terms of the percentage of VSMs we attended, it declined as a percentage of ALL VSMs in May - primarily, we think, because most of the 500 companies that swarmed the VSM field in the last six days of May were very small companies that appear to have decided to act as their own Inspectors. (More on that decidedly ill-informed decision later down.)

In June, the meetings we handled rose to 222 - with VSMs accounting for 77 of them, or 35% of the meetings we handled.

Here are some general observations from the 477 meetings our IOE Team Members attended between January and June:

• As we had predicted earlier in the year, every single company we worked with that had a quorum last year had one this year, and was able to successfully complete “the business of the meeting.”
• This is no small feat, given the many challenges that were posed when it came to drafting materials with the Covid pandemic growing apace, then printing and mailing materials via suppliers that also were often over-stressed and sometimes under-staffed due to the virus - and typically making new arrangements for the meeting site and meeting logistics, literally ‘on the fly.’ So hats off to the top industry suppliers - and to the majority of public companies too, who came through with amazing grace under pressure…And boo on those second-raters who served up second-rate meetings - and to second-rate suppliers who fled the battlefield altogether.
• Roughly 354 of the 477 meetings we attended (75%) were “in-person meetings” that were held at a designated site, but with strong “keep-away provisions” that limited in-person attendance to three people or fewer - vs. 120 VSMs (25%) our team members attended as IOEs.
• Our Inspectors of Elections attended all but ten or so of the 477 meetings they served at “virtually” - via a dial-in conference line…whether they were VSMs or not. They were able to drive - and in a few cases, walk - to the few meetings they did attend in person, where the office buildings were largely empty and where only a handful of people were in attendance - all safely distanced and wearing masks, except while presenting.
• As best we can tell, there have been NO “Hybrid Meetings” this year, which is as one would expect given state and local rules that strictly limit in-person attendance at any meetings.
• At every meeting where our Inspectors served, the traditional representatives from the companies’ accounting firms attended by phone - AND - at each of these meetings, and in line with a long term trend, not a single question was asked of them (!) exactly in line with our prediction… and our experiences over the past 5-7 years.
• The most surprising thing to our IOEs was how frightened most company officials were by the idea of a Virtual-Only meeting. Some were fearful of technological glitches. But most were fearful of the Q&A period, and how best to handle it. (More on that later down too.)

Rather amazingly, our team observed only a few small “technical glitches” at VSMs - mostly where a few participants had difficulty dialing-in, or controlling that mute-button - and where we think the issues were mostly with the lack of tech-savviness of some of the officers, directors and individual investors who failed to carefully follow directions, or simply pushed the wrong buttons by mistake.

At one small company a recording of a shareholder proposal that the company expected would be played had to be read by the Corporate Secretary, but no big deal. At another meeting one of our IOEs observed, a shareholder with multiple “positions” was only able to vote one time…Then they’d need to sign out and log in again with another of their control numbers…with very limited time to do so…plus, they’d be missing part of the meeting. This needs fixing, for sure!

As you will read below, however, there were numerous reports from big investors - many of them regular investor-proponents - who were shut out of meetings due to a variety of log-in, authenticating and “permissioning” problems, or who felt badly ‘dissed’ with slam-bam Q&A practices.

Sad to say, many public companies disregarded our advice - not to diss their investors - and basically rammed through the business of the meeting at breakneck speed, with little or no attempt to make the meeting interesting or informative or to allow effective participation.

As To VSM Meeting Attendance, The Numbers Of Voters - And Of Votes Cast At The Meeting - And The Number Of Questions Asked And Answered…

The numbers are all over the lot… And frankly, the “averages” that were reported in the Harvard Law Forum are not terribly informative because of the widely varying shareholder demographics at companies with widely varied histories, sizes, businesses - and the presence or absence of individual company “issues.”

Here are a few statistics from the 120 VSMs our Team Members attended, and five others where we listened in:

• As to the number of meeting attendees, the numbers varied widely - from a reported 1,500 at much-in-the-news Wells Fargo (75% shareholders, 25% guests) - to 800 at Coca-Cola, 177 at United Parcel Service (a HUGE increase for them, where normal in-person attendance over 10+ years ranged between 2 and 5 people) and 62 at UnitedHealth Group, vs. their normal 1 or 2. But the statistical MODE (i.e., the most commonly occurring number) was somewhere between zero and five attendees tuning in, thanks to all the small-caps and micro-caps in the mix.
• As to the actual number of VOTERS while the meeting was in progress, the statistical “MODE” was close to ZERO, due, here too, to the large number of very small companies that adopted VSMs this season.
• As to the VOTES, we saw a few instances where a few hundred thousand votes occurred - but most of them had been recorded during the extra 12 or so hours the polls were left OPEN for VSMs, rather than cast at the VSM: Actual and valid on-line votes typically ranged between zero (the most common number by far) and a few thousand.
• There were no instances where we saw added VSM votes “moving the needle” by even one-hundredth of one percent.
• As to the number of questions asked, the statistical mode was ZERO, here too…again, because the vast majority of VSMs were held by small and micro-cap issuers, where there were no issues of consequence whatsoever…AND where no efforts were made to elicit questions in advance as many large-cap and mega-cap companies did. Most large-cap companies managed to take between six and a dozen questions during the Q&A periods, which, on average, was set by large-caps for 30 minutes.
• As to the duration of VSMs, the Broadridge-reported “average time” of 22 minutes is not very instructive as to what actually went on, because of the widely varying results by company-size. In our Team’s experience it would be:
  • Small and micro-cap companies; 5 - 15 minutes
  • Large and mega-cap companies; 1 hour on average - typically on the dot
  • A very few “companies with issues” - and/or many shareholder proposals and many more questions than ‘average’ - 90 minutes…which we feel is way too long for a VSM and certain to lose the audience except perhaps for rabble-rousers, who have no place at a business meeting to begin with.