Proxy Solicitation – The Next Generation

An Interview With Michael Mackey, President, Alliance Advisors, LLC

Q: Michael, how is the proxy solicitation business going at Alliance Advisors?

Michael: This past September marked our one year anniversary since our expansion back into the proxy solicitation business. During our first year we contracted with 200 corporations for proxy solicitation services. Not only was I pleased with the number of clients but also the size of the corporations which included dozens of Fortune 500 companies as well as the two largest utility companies in America.

In addition, Alliance Advisors (Alliance) was also the proxy solicitor for 6 M&A transactions as well as representing 3 clients in proxy contests. I guess by any measure it would be considered a successful first year.

What do you mean by “The Next Generation” in the title?

Alliance is very focused on corporate governance issues and shareholder engagement so we have made a significant investment in building a governance consulting practice which consists of 4 former ISS executives. While the proxy solicitors who manage our campaigns are well versed on governance matters, we believe our Governance Consulting Group takes it to another level. Their expertise with finance, executive compensation, contested elections and direct knowledge of institutional investors has been a tremendous asset to our firm. To illustrate their effectiveness, consider that seven of our top ten proxy solicitation clients have also retained Alliance for corporate governance consulting services. That is what I mean by The Next Generation.

How have you marketed the name Alliance Advisors?

We have an aggressive business development plan to gain market share which includes meeting with law firms and public companies as well as our executives speaking at various industry conferences. Alliance has also been very active in writing White Papers and sponsoring webinars. During our first year, we published 4 White Papers and sponsored 5 webinars, several being co-sponsored with law firms. Our White Papers have covered such timely topics as Dodd-Frank, Say-on-Pay, shareholder proposals and the most recent one is on the issue of political contributions. The webinars we have conducted have involved issues such as shareholder activism, by-law amendments, voting by institutional investors and a recap of the past proxy season. Our last webinar had more than 300 participants from the corporate and legal community including many prominent law firms which offers us the opportunity to display our expertise.

Are there other proxy services that Alliance Advisors offers?

In addition to our 200 proxy solicitation clients, we also serviced another 200 corporations with proxy management, Notice & Access compliance and distribution services. Alliance is the only proxy solicitor that provides corporations with a turnkey solution to manage the entire shareholder meeting process whether the client selects the “Full Set Delivery” or the “Notice Only” model. Our proxy management program provides for the printing of all shareholder documents, posting of the annual report and proxy statement, web hosting, registered holder mailing, broker search and distribution and vote tabulation. These functions generate a host of cost considerations for issuers and our proxy management service has resulted in many of our clients not only significantly reducing costs but also many hours of work. All told, Alliance provided 400 corporations with proxy related services this past year.

We noticed on your website that you have another company, Alliance Shareholder Communications; Can you tell us about that?

We formed Alliance Shareholder Communications (ASC) to handle asset reunification programs as well as open-end mutual fund proxy solicitations. These services are more event-driven and involve communicating primarily with large numbers of registered holders and retail shareholders by way of a call center application. Alliance and ASC have developed a scientific approach to call center management which includes campaign strategies, research, training, script development, data cleansing, householding, top listing and vote reporting. Also, the work we do in these business lines makes productive use of our call center during the periods that are off the corporate proxy season.

Alliance Advisors seems to have an extensive list of services – can you speak to that?

Our business model has always been about diversification – to provide corporations with multiple service offerings while keeping each service competitively priced. We pride ourselves on our ability to cross-sell and offering a suite of proxy services that are complementary will only benefit the client. For example, our governance consulting practice reinforces our core proxy solicitation business when there are critical management or shareholder proposals on the agenda. The proxy management program that we developed allows our proxy solicitation clients to interface with only one firm to also manage all of the operational aspects of the shareholder meeting process. ASC assists the client with the clean-up of the shareholder files after Alliance has completed their merger transaction. Also, our solicitation work for mutual funds greatly enhances our ability to communicate with thousands of individual investors. This business model has succeeded in the past and appears to be welcomed once again by corporations.

What other things distinguish Alliance Advisors as a proxy solicitor?

Our people. One of the main reasons my brother Kevin and I decided to re-enter the proxy solicitation business was the fact that we were able to work with colleagues from CIC – our former proxy solicitation firm. In fact, 10 of the senior people at Alliance are previous CIC executives who have a long history of working together in this business. Alliance has also been very strategic in hiring people with the right skill sets to build this company. In addition to bringing aboard a number of executives from ISS, we have individuals who worked at Broadridge, a market intel- ligence firm, a transfer agent as well as on the corporate side. This approach has given us valuable insight into all of the different players who are involved in the proxy process. But the main asset that distinguishes our firm is service levels which I believe are not paramount at all proxy firms. Historically, clients have been loyal to us not only based on the quality of the work, but perhaps more important, our responsiveness.

Any final thoughts about Alliance Advisors?

It is evident that we have something very special at Alliance – enthusiasm, teamwork, and a “client-first” approach. By melding veterans with decades of experience with some of the youngest and brightest minds in the industry, Alliance has built an extensive client roster which includes some of the most prestigious names in American business. Our mission is to offer corporations high level consulting, governance driven proxy solicitation, diversified services along with extraordinary results. To this goal, we will dedicate our professional efforts.