by Michael Mackey, President, Alliance Advisors
Some practical advice, cost savings tips, and details of the hot topics and trends in the field of proxy solicitation and governance advisory work: As a proxy firm, our business brings us in contact with the most influential institutional investors in the world and millions of individual investors each year, so we offer the following:
Practical Advice
• Know your shareholder profile by category and share holdings (institutional, retail, registered).
• Have up-to-date contacts at each institutional investor and know their voting policies.
• Shareholder engagement off the annual meeting cycle is now the norm (70% of S&P 500).
• Lead the conversation with the right people on the phone ( Legal, IR, HR).
• For critical proposals we advise calling institutions from the bottom up so questions/objections from smaller institutions will sharpen presentations to your largest investors.
• In call campaigns to retail investors do not hesitate to drop share range levels to gain support. Once a share range has been “dialed” multiple times it is time to move to greener grass in the form of shareholders who have not been solicited.
Cost Savings Tips
• Consider Notice & Access (N&A) if it is right for your shareholder profile and proxy agenda. • Utilize N&A only to certain shareholder groups or stratify by share range as an alternative.
• Consider combining 10K & PS into one, to consolidate printing and to provide “one pass” mailing.
• Reminder mailings to retail investors should not be via the old “Letter from the CEO”; but rather an oversize postcard with the use of imagery, color, call-out boxes and an 800 number to call: Higher response rates will eliminate calls and more than cover the additional print costs.
• Use Marketing Mail rate instead of First Class postage when ample time is built into schedule.
Hot Topics/Trends
• Today most governance issues have either been widely adopted or addressed through the shareholder engagement process, although resolutions calling for amendments to existing by-law provisions for proxy access will continue.
• Evolving views of institutional investors, particularly index funds, will bring Environmental and Social proposals to the forefront and will dominate the shareholder proposal landscape.
• Environmental issues include emissions reduction, sustainability reporting, reduce greenhouse gas, coal ash risk and climate change concerns.
• Social issues include board diversity, lobbying, political expenditures, the opioid crisis, drug pricing, gun violence and corporate culture.
• Board diversity and composition ( female and minority) are laser-focused issues for some institutions particularly BlackRock, SSGA and CalSTRS.
• Opposition to Virtual-Only meetings will continue with NYC Pension Funds at the forefront.
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