Postpone Your Meeting? Only In The Direst Circumstances, We Advise

In mid-March, the fifth largest U.S. Transfer Agent advised all its customers to postpone their annual meetings until July 15, 2020 or later, if possible - implying that SEC guidance on how to do so was somehow a ‘best practice’ that public companies should follow.

We see no reason whatsoever for a company to postpone its annual meeting - unless the company itself becomes overwhelmed during the crisis. And, in addition to noting potential costs for setting new record dates, and re-mailing materials, and potential hostile attempts by dissident groups to seize control of unwary companies, we would note especially that it is a very simple matter to transmit the necessary shareholder records to service providers who are ready, willing and able - and will be only too eager to mail the necessary materials and tabulate the votes, as we go to press.

As described earlier in this issue, the first-tier service providers are forging ahead confidently - and strongly - to provide annual meeting services very much as usual - thanks to their extensive contingency planning, de-centralized workplaces and to the high degree of automation that permits the vast majority of their employees to work from home.

We would also urge any readers contemplating a postponement to review the excellent March 18 article from Cleary Gottlieb, “Coronavirus & Postponing/Adjourning Annual Meetings” - and we would note, that while the article minimizes the likelihood of repercussions from postponements under the present circumstances, their guidance refers specifically to non-hostile situations…the absence of which is not always a safe assumption for a company to make. In our Inspector of Election business, we have seen about a dozen instances in the past 10 years where court-ordered meetings were used by dissidents against unwary companies…to seize control entirely