August 5, 2008

Broadridge’s “Final” E-Proxy Stats for the Proxy Season

In our “E-Proxy” Practice Area, we have posted the latest e-proxy statistics from Broadridge. As of June 30th:

– 653 companies have used voluntary e-proxy so far (this pretty much is the head count for this proxy season)

– Size range of companies using e-proxy varies considerably; all shapes and sizes (eg. 32% had less than 10,000 shareholders)

– Bifurcation is being used more as the proxy season progresses (but still not all that much); of all shareholders for the companies using e-proxy, now over 10% received paper initially instead of the “notice only” (up from 5% a few months ago)

– 1.1% of shareholders requested paper after receiving a notice; this average is about double what the trend was a few months ago

– 57% of companies using e-proxy had routine matters on their meeting agenda; another 31% had non-routine matters proposed by management; and 12% had non-routine matters proposed by shareholders. None were contested elections.

– Retail vote goes down dramatically using e-proxy (based on 586 meeting results); number of retail accounts voting drops from 20.6% to 5.5% (over a 73% drop) and number of retail shares voting drops from 34.8% to 16.7% (a 52% drop)

A Note on Bifurcation

A number of members whose companies bifurcated have told me that a primary reason they did so was because Broadridge maintains a database of investors who prefer paper. So far 2.5 million investors have asked to be in this database.

Many companies have a fair number of their shareholders in this database – often over double digits in terms of percentages – and these companies recognized that it would be challenging to do a notice-only delivery and risk fulfillment issues (egs. not printing enough to meet demand; service provider botching the fulfillment, etc.). For these companies, it was better to bifurcate and keep the number of shareholders who requested paper much lower than it otherwise would have been the case.

In other words, the relative level of shareholders that requested paper would be a bit higher than the 1.1% experienced if these companies had not bifurcated (if I comprehend the Broadridge stats correctly). But this all still begs the question of why so many companies didn’t bother to bifurcate? I imagine they will next year to reap the cost savings available…

The Yahoo Annual Meeting: My, My, How Things Change

I got a chuckle out of the Washington Post’s headline for the Yahoo annual shareholders’ meeting this Saturday: “Shareholders Give Yahoo a Vote of Confidence.” It’s funny because each director received over 75% of the vote – meaning that nearly 25% of shareholders “withheld” their votes from these directors, who ran unopposed and without a major “just vote no” campaign. [You may recall that Carl Icahn had initially challenged management by running an opposing short slate, but he was appeased and placed on the board – so he withdrew his campaign.]

It wasn’t that long ago that directors routinely received 98% of the vote – so I really wouldn’t call 75% a “vote of confidence.” And now a major shareholder is questioning the results and asking for a recount of its votes…

– Broc Romanek