Prudential offers gifts to boost proxy vote

Mar 09, 2010

Eco-friendly gifts to encourage shareholder voting and promote CSR

It used to be that buying stock was like a free gift with purchase. Whether it was a box of chewing gum from Wrigley’s or discounts on a Carnival cruise line, it was good to be an investor. At many companies the glory days of shareholder perks are over, but for some of Prudential Financial’s investors, those days may be making a comeback.

Like many companies this proxy season, the insurance giant is on a mission to increase shareholder participation. ‘We all have to figure out why shareholders are not voting and what we can do,’ says Peggy Foran, Prudential’s chief governance officer and corporate secretary. ‘You can create all the websites in the world, but if you cannot engage people, you cannot communicate with them,’ she adds. 

Prudential’s new, experimental method of engagement: free gift with vote. Those who cast a vote at the upcoming annual meeting will receive their choice of an eco-friendly tote bag or a tree planted on their behalf. These environmentally friendly gifts also serve to address the campaign’s dual purpose of promoting Prudential’s CSR program. ‘It is something we are very proud of,’ says Foran, ‘and from a financial services company, some people may not know the type of work we have done.’

For now, the offer applies only to registered shareholders, but if the experiment proves successful, Foran hopes to expand the program to include retail investors. ‘I am hoping that, assuming this works, this is something the SEC would allow in a notice statement,’ she says.

Regardless of how the experiment turns out, the cost, says Foran, ‘is actually one of the less expensive ways of reminding shareholders to vote and it is far cheaper than having a proxy solicitor interrupt them at dinner.’ We will know the results after the shareholder meeting, but really, who doesn’t like free stuff?

By Katie Feuer