- Assess where your company is likely to stand at year end vs. peers: If you are not in the top-tenth-percentile performance wise, you are especially vulnerable to (a) getting shareholder proposals and (b) to getting large numbers in favor of them and (c) to getting large Votes-No against some or all directors, or, heaven forbid, on your Say On Pay. (Directors, as we know, do not like that.)
- NOW is the time to reach out to your largest shareholders - to see if there are any issues from their perspective, to review any new ESG initiatives you may have undertaken on your own, to review the issues likely to be on your ballot, to answer any questions or concerns up-front and, of course, to elicit support for your agenda.
- If your company has “issues” of any kind, prepare to address them candidly, at the top of the agenda, and to explain your game plan to deal with them in detail. (Institutional and retail shareholders alike know that every company - like every person - has “issues” from time to time. And the majority of them will be “with you” as long as you are candid - and your story makes sense to them.)
- Rigorously assess your company’s ESG profile against the ‘best-in-class’ - and take action to up your game on ESG matters before you engage with institutional investors and before you begin to draft your proxy statement. (You can’t fix your financials overnight, but when times are tough, companies that are perceived as being “good citizens” tend to do noticeably better, voting-wise, than less-engaged peers.)
- Bone up carefully on how to tell your story in a way that will show your company in the best possible light: Review the proxy statements of BofA, Pepsi and Prudential, we advise - ‘best in class’ for content, visuals and overall reader and shareholder friendliness, we say - and form a task force, including a top-flight financial printer, to up your game here as well.
- Count the house, and resolve to increase your retail investor vote - even if you do not smell any close-calls right now. Directors are more vulnerable to Votes-No than ever before…And if any of them do get targeted by big institutions, or if there are proposals that you oppose, your only hope to get a “respectable margin of victory” will be a bigger than usual vote from your almost-always-friendly retail voters…Please remember: if you wake up to a threat less than 30 days before the meeting, it’ll simply be too late to act. (Do read the many tips on how to do this - on our website.)
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