For Laurel Hill, There Is No Denying That The Times Have Changed. And There Is Also No Denying That The Role Of The Proxy Solicitor Has Most Definitely Changed

An Interview with Tom Kies and John Siemann, Partners at Laurel Hill Advisory Group, LLC

The Editor: John, let’s start with you: What led you and your group to form Laurel Hill?

Siemann: As you well know, over the past five years, the proxy process has become increasingly complicated. Each year, it seems, issuers are confronted with a new wave of corporate governance initiatives, regulatory changes and shareholder activism. Almost overnight, phrases such as “Just Say No,” “Say on Pay,” and “Notice and Access” have become part of any proxy dialogue. And, while we didn’t know it at the time – although we did kind of expect it to a degree - it certainly appears, given the current environment, as if the proxy process will get even more unsettled in the future.

Against this backdrop, a group of senior proxy solicitation executives began questioning whether issuers were receiving all the help they could from their proxy solicitor. Surveying the solicitation landscape, we identified the fact that most proxy solicitors interacted with their clients only for a brief period - typically between record date and meeting date - and then went silent until the following year, when the cycle started over again. Information about corporate governance developments or likely voting outcomes was made available only if the issuer specifically requested such information and, typically, only at additional cost.

Believing that the rise in shareholder activism, together with the ever-changing directions of corporate governance reform, warranted a change in the way proxy solicitors interacted with their clients, this group of executives created a new firm in the fall of 2007, Laurel Hill Advisory Group. For all of us in this group - all proxy veterans and each of us with more than 20 years experience in the industry - Laurel Hill needed to be more than just another traditional proxy solicitation firm. Instead, this group was committed to the notion that Laurel Hill should fill the role of a year-round consultant, fulfilling all the traditional distribution and collection functions during the solicitation period, but, equally important, providing specific corporate governance information and consultative advice proactively in the months prior to the solicitation.

Editor: Tom, in the interest of full disclosure, I guess I should tell my readers that I, and my chief lieutenant back then – who has since gone on to be a major player at yet another big proxy solicitation firm – recruited you to start up a stock watch and proxy solicitation business back in the 1980s, at what was then a major bank. So let me ask you; what, specifically, do you do that makes Laurel Hill different?

Kies: Reflecting the commitment of our management team to fully utilize its broad range of industry expertise, and to provide truly comprehensive strategic consulting to all its clients, Laurel Hill offers services that are truly unique in the current proxy arena. These include:

• Meeting with our clients on a quarterly basis
• Reviewing the latest corporate governance developments with them
• Providing a detailed breakdown of our clients’ institutional shareholders, identifying those that will follow third party recommendations (such as ISS) and those that will use in-house guidelines
• Providing detail on what institutions’ in-house policies may be on particular issues
• Providing proactive advice on the various alternatives that are open to our clients regarding a particular proposal, in order to help them make the best choice

Equally significant, Laurel Hill is committed to offering these services in a truly cost-effective manner, typically for a fee very similar to what most issuers pay for their “traditional” solicitation service alone.

Editor: Anything you’d like to add, John? I know you’re a former football coach, and it does strike me that proxy solicitation is becoming quite a lot like a football game.

Siemann: You’re right; there are a lot of similarities. There’s a lot of heavy work, and a lot of basic blocking and tackling that’s needed in both arenas. And, for sure, proxy solicitation, like football, can be a bruising game. Having the right game plan, and the right strategy, and really knowing your opponents, and what they are likely to do - and, most important, knowing how to outplay them - are key components of both of these sports. And, to be successful in either game, having a strong team – and having very strong teamwork is absolutely essential.

Editor:As you know, I’m a big fan of your ads. They certainly seem to me to have helped to put you on the map big time. How do you come up with them?

Siemann:This is something of a team effort too. A lot of us are film buffs, which many of our ads reflect – and Jamie Catacosinos has been one of our leading creative directors – and we’ve had a lot of fun with the ads. This reminds me that being creative – and trying to think outside of the box – and having fun too - is a big part of being successful in any business, but it’s particularly important in our business I think.

Editor: So how has your first year gone for Laurel Hill?

Kies: Fast forwarding to the fall of 2008, the response of corporate issuers to this new approach has been both immediate and highly positive. In less than one year, Laurel Hill has added more than 65 new clients, including such well-known names as American Airlines, Aflac, Goodrich, Southern Company and Waste Management. Whether dealing with shareholder proposals, implementing equity compensation plans, or deciding on Notice & Access, issuers have been especially responsive to the year-round, hands-on, consulting approach introduced by Laurel Hill.

Especially significant, Laurel Hill has also become active in making formal presentations to our clients’ Boards and their related committees, helping to clarify governance alternatives for the group that’s being most prominently targeted by activists these days.

Last, but certainly not least, the experience and expertise of the Laurel Hill team has translated to activity in the proxy contest and M&A arenas, where the firm has been successful in representing a number of regional savings banks in proxy contests and was, most recently, brought on to assist Bank of America in its acquisition by merger of Merrill Lynch.

Preparing to enter the 2009 proxy season, Laurel Hill Advisory Group has grown to a staff of more than 25 highly trained professionals, with offices in New York City, San Francisco, Toronto, Vancouver and Jericho, NY, and the firm is poised to enter into what it feels will be a truly pivotal era in both the proxy process and management-shareholder relations. For Laurel Hill, there is no denying that the times have changed. And there is also no denying that the role of the proxy solicitor has most definitely changed.

For more information about Laurel Hill Advisory Group, LLC, go to www.laurelhilladvisory.com Or contact Tom Kies, at 917-338-3180 – tkies@laurelhillag.com or John Siemann, at 917-338-3191 - jsiemann@laurelhillag.com