September 14, 2010
With more companies either
conducting their annual meetings solely online - or holding hybrid
meetings that are both online and in a physical location - many are
wondering what is involved and what issues they should consider before
raising the topic internally. Join these experts who are the pioneers that
have been through the virtual or hybrid experience already:
- Cathy Conlon, Vice President, Strategic Development,
- Carl Hagberg, Independent Inspector of Elections and Editor
of The Shareholder Service Optimizer
- Cary Klafter, Vice President, Legal & Government Affairs, and
Corporate Secretary, Intel Corp.
- Lisa Beth Lentini, Senior Corporate Counsel, Best Buy
- Scott McMillen, Vice President & Senior Corporate Counsel,
The Charles Schwab Corporation
Broc Romanek, Editor, TheCorporateCounsel.net: Welcome to
today's webcast, "Holding the Virtual Annual Meeting: Factors to Consider
and Practice Pointers."
Without further ado, let me go ahead and introduce the panel for today.
Many of these people are my good friends. I always love to do webcasts
where I know the speakers so well.
This is a topic that I've been following before I was an online
personality. It's something that I was dealing with at the SEC back in the
mid 1990's, before there had even been any virtual annual meetings. There
were a few in the early 2000's, and there's been a growing trend of
companies holding these types of meetings. There number of companies that
have done these meetings is still small, but there have been enough of
them to have this webcast, particularly because they included some large
notable companies. So I thought it was a good time to put this program
together, before the proxy season really gets underway.
Cathy Conlon is Vice President, Strategic Development at
Broadridge. Carl Hagberg is an independent inspector of elections as well
as the Editor of The Shareholder Service Optimizer; he is our "go-to"
person on these sorts of proxy season issues. Lisa Beth Lentini is Senior
Corporate Counsel at Best Buy and a former member of the SEC's CorpFin
Staff. Scott McMillen is Vice President & Senior Corporate Counsel of
Charles Schwab. And Doug Stewart is Senior Attorney at Intel.
We're going to start it off with Carl talking about the terminology,
and what the different alternatives are, and then we'll go from there.
Types of Virtual Annual
Carl Hagberg, Independent Inspector ff Elections and Editor
of The Shareholder Service Optimizer: Thanks, Broc. You, like me, are
a bit of a history buff. Two weeks ago, I realized with a shock that the
first virtual meeting that I'm aware of goes back about 15 or 16 years, to
when Pfizer used to broadcast live audio and visual of their annual
meeting all around the globe using satellite technology. They wanted to
expose their meeting to their employees and associates. In those days an
annual meeting was quite a big deal. So I was kind of shocked when I
realized how far back this practice actually went. About three or four
years, ago quite a few states began changing their corporate codes to
allow meetings to take place only in cyberspace, as a little nod to modern
I thought I'd start by going through a taxonomy of virtual meetings.
There are about five or six different kinds that I can see here. As we go
through the alternatives, we want to be asking ourselves two questions:
Does this alternative provide better service to investors, and is it more
cost effective? At the end of the day, I think that's what every corporate
person needs to think about.
We'll start with the virtual-only meeting, that is, a meeting that is
held only in cyberspace. In that situation, the shareholders have no
ability to attend in person. Because it's an annual meeting, shareholders
must be given the ability to cast their votes between the time the polls
are officially opened and officially closed. I believe they also must be
given real-time ability to ask questions on matters before the meeting,
within reasonable parameters. This, to me, is the ultimate goal - a
meeting you would have only in cyberspace. No hotel, no coffee pot, no
nothing - just virtual reality.
The second alternative, which has been the more common one but still
not all that common, is what I would call a "hybrid" virtual meeting. This
is a meeting that is held in cyberspace but is held in real space too. In
a hybrid meeting, shareholders with the proper credentials can attend and
can vote in person if they want to do so. And here's something, Broc, I
think I may have gotten from one of your blogs - In Maryland, when they
enacted a new law permitted virtual meetings, they included a provision
that if even one shareholder asked to attend a meeting in person, the
company would need to designate a physical place for that person to come
and be part of the meeting. So that's a hybrid meeting.
There's a third variety - I think Schwab is probably an example of this
- which is a hybrid meeting with limited virtual voting ability. In this
type of meeting, if you're a registered holder and you have a PIN, you can
log on and vote in person. If you're a street name holder and you've
pre-registered and gotten a PIN, you can vote during the meeting. Other
people have to vote the old fashioned way. So that's the hybrid meeting
with limited or no virtual voting.
Then there's the type of meeting we're all most familiar with - a
virtual meeting where there is real-time audio and a real-time video
broadcast, but no voting ability. I think this is a pretty good
alternative for companies that just want to get more people to see what
they are about and to attend their meeting.
Then there's the virtual meeting - and maybe this is the most common
type of all - with audio feed only. I must say I hate this model. Most
annual meetings are like watching paint dry to begin with. When you only
have audio feed and maybe some PowerPoints, it's like watching paint that
dried last week and you wonder why you're doing this. That's the virtual
meeting with audio only.
Last but not least is the archived virtual meeting. A steadily growing
number of people are recording the audio and visual of their meeting, and
then putting it up on their website for anyone who wants to view it later.
So that's the taxonomy of virtual meetings. I'm going to turn it over
to Cathy Conlon, who's going to talk a little bit about the mechanics of
virtual annual meetings.
Mechanics of Virtual
Cathy Conlon, Vice President, Broadridge: Thanks, Carl.
My goal is to talk about what we've done for some of our clients on our
platform and give you some of the questions that we have gotten from
clients as we talk to them about this process. Since we rolled out our
virtual shareholder meeting platform in May 2009, we have hosted 22
virtual meetings for our clients, and that includes Broadridge's own
As Carl mentioned, the company has the option of having an audio-only
event or having a live video feed for their meetings. The company also
determines whether they want to do a hybrid meeting or a virtual-only
meetings. Of the 22 meetings we have done so far, 13, or slightly more
than half, were virtual-only. And of the 22, 17 were the audio-only events
that Carl doesn't like so much, versus five video events. For those of you
who want to take a look at what the different meetings look like, we have
virtualshareholdermeeting.com, which has links to all the replays of
the meetings that we have hosted. It also has a list of upcoming meetings.
Feel free to take a look on our website at the different options that
we're talking about here.
For clients that want to conduct a virtual meeting on our platform, we
build web pages where the meeting takes place. Specifically, there are two
pages, the login page and the meeting page. Those pages have the look and
feel of the client's website - the colors and logos and things like that -
so they look like the client's own website to some extent. The login page,
which you can think of as the door to the meeting room, is where the
shareholder goes to get validated. From there, if they are a valid
shareholder, they go on to the meeting page. Once they are on the meeting
page, the shareholders can watch the proceedings of the meeting, ask their
questions and vote their shares.
We develop these pages, and then we give the client the URL that they
can use to direct their shareholders who want to attend. So if it's a
virtual-only meeting, in the company's proxy materials there will be some
www.address which will be the location of the meeting. With a hybrid
meeting, there will be both a physical and a virtual location.
The other option the company has is to direct their shareholders to
their own websites. Many of our clients do this. They will direct their
shareholders to their own web pages, and then they link them through to
the login page.
Most of the companies that we posted virtual shareholder meetings for
have also allowed non-shareholders to attend the meeting, but in
listen-only mode. What that essentially means is that the company is
offering a webcast of the meeting simultaneous with the actual meeting.
Among the most frequently asked questions we get are: How do we
validate those shareholders, and how do we allow them to vote? Another
voting question we always get is: Can all shareholders vote on our
The answer to the first question is that the shareholder is validated
with their control number. The control number is unique ID that is already
sent out to the shareholders with their proxy materials. The answer to the
second question is yes - on our platform we can validate all shareholders.
It doesn't matter if they're registered or beneficial, we will validate
them and allow them in to vote their shares, and there's no risk of
This question comes up a lot: Can a shareholder vote over and over
again? The answer is yes, but the only vote that counts is the last vote.
Even if a shareholder has previously voted in any format, by sending in
their VIF or voting on proxyvote.com for example, if they come to the
meeting and vote their shares, we will override the other vote that they
Another big concern companies have is how they are going to handle the
questions that come in to the meeting. How are shareholders going to ask
them, and how is the company going to monitor what's being asked?
The company has a few choices on how they incorporate the questions
into their meeting. Companies can collect questions in advance of the
meeting using our shareholder forum platform, which works in conjunction
with the virtual meeting platform and allows companies to collect
pre-meeting questions. That's one option.
The second option is to allow shareholders who have logged in and been
validated, and who are sitting at the meeting page, to type in their
questions right on the meeting page. Behind the scenes, someone from the
company is monitoring all the questions that are being submitted.
There's a third option - companies can have a telephone bridge and take
those questions verbally. That means that, in addition to the webcast, at
the Q&A time they'll open up the phone lines for people to ask questions.
So those are a few different options for how questions are handled on the
A telephone bridge can also be used to enable directors and presenters
who may not be in the same location as the meeting to participate in the
meeting virtually. We have had several clients use a telephone bridge for
that purpose. A telephone bridge is also a way that a shareholder proposal
could be read into a meeting. The shareholder proponent can join the phone
bridge, and at the appropriate time be given the opportunity to read the
proposal to the meeting. So the telephone bridge can be a very handy tool
for the meeting.
Many clients want to know under what circumstances may a virtual-only
meeting format be used, and when is it more appropriate to do a hybrid
meeting? I think this is a very important question and one we've heard a
When we speak with institutional investors, there are those who say
that if there are no governance issues at the company and there are no
shareholder proposals or contentious issues, then virtual-only meetings
are probably OK. But there are others in the industry who believe that
virtual-only meetings are a bad thing for shareholders, because those
meetings take away a shareholder's right to face management. I think there
is something to be said on both sides.
In my practical experience, for many companies, especially smaller
companies, there are economic and logistical considerations in deciding to
go virtual-only, where for budgetary or logistical reasons they have to
choose to either an in-person or a virtual meeting. In the case here you
don't have the option of having both formats - which I agree is the ideal
option for shareholders - which method allows for more participation? I
would argue that it would be virtual-only, because I think technology in
this case is a great enabler.
Most shareholders do not have the ability to attend the company's
meeting, especially if you consider the geographical hurdles. Obviously, a
virtual-only meeting dispenses with that problem.
The company has to also commit to doing the right thing, and they can
more easily do that for the vast majority of their shareholders in a
virtual setting - for example, having phone lines for receiving questions,
committing to answer all the questions, and perhaps showing the questions
to everyone in attendance. That's actually a functionality we're planning
to add to our platform - the ability for all questions to be seen by the
whole audience, so that a company cannot hide behind the technology (which
is one of the concerns we hear a lot). Another option is posting all of
the questions and answers after the meeting. I think there are some things
to be said for the hybrid approach if you can do it, but there's also
something to be said for considering a virtual-only approach when there is
no other option.
Those are my comments. I'll turn it back over to Broc.
Hybrid Annual Meetings
Romanek: Thanks, Cathy. Now we're going to have some of the
members on our panel who have actually experienced hybrid annual meetings
(I guess all of them, except for Broadridge) explain to us what it was
like, any lessons learned, and things of that nature. We'll kick it off
with Doug at Intel.
Doug Stewart, Senior Attorney, Intel: Thanks, Broc. We've
been doing a hybrid meeting for two years now. I fondly recall my
discussions with Cathy as we developed the platform together, which served
as a sounding board for the kind of features and kind of setup we wanted
like to see. Those were great discussions.
I think the dawning moment for us came about three years ago. We had
rented a big convention hall for our meeting, and just over 100 people
attended. We were spending hundreds of thousands of dollars on this
meeting, for everything from security to production crew to you name it,
and the economics just didn't make sense for us to keep doing that. What
we've been doing now is holding the physical part of the meeting on our
campus and then having the virtual meeting going out to everyone.
From a messaging perspective, we didn't want this to be seen as taking
anything away from the stockholders. We wanted people to feel that this
was an improvement over their existing experience. So in addition to
having the virtual meeting where people can vote at the meeting online, as
well as ask questions of management, we also have a stockholder forum,
which we developed with Broadridge, and where we get questions year-round.
Just by comparison, we got 17 questions at last year's meeting from online
services during the meeting, but we had over a 100 questions in advance of
the meeting through the forum that we committed to answering. So the forum
essentially expanded the Q&A period from just the hour of the meeting to
at least a month prior to the meeting, as we were gearing up for it.
In terms of how the meeting operated, I think people who were there
would agree that it went fairly smoothly. There were no technology
hiccups. The video feed worked fine. People were able to log in. We had
nearly 100 stockholders log in and attend the meeting, as well as another
50 or so non-stockholders, or people who didn't have their credentials -
anybody who was just curious about how the meeting would operate.
We had 21 different stockholders vote at the meeting representing about
130,000 shares - still a small number, but not insignificant. I think that
would compare favorably to the number of votes and shares being voted at
our meetings in the past. But one of the things that did happen is that
our in-person attendance has really gone down. Last year, only about 30
people showed up at the physical meeting. People are just not going to
physical meetings as much as they have in the past. There are probably a
lot of good reasons for that, everything from Reg FD to people just being
more used with video-on-demand, accessed from the comfort of their homes.
We've tried to move to the virtual-only meeting. We want to keep
getting cost savings by eliminating the physical portion of the meeting.
We've refrained because we have heard a couple of complaints that people
want to make sure that there is procedural fairness, and that stockholders
should still have the ability to confront management. We are more than
happy to engage with stockholders who have concerns to try to figure out
how to design a system that everybody can feel comfortable with, whether
it's having all the questions and answers available and posted, having
stockholder proponents invited to the meetings so they can present their
proposals on an equal footing with management and be on the same camera,
These are the sorts of processes and procedures that need to be worked
out before virtual meetings get accepted by everyone. We're doing our part
to listen and to take all the good recommendations we can to make this
more sustaining and a system people can believe in.
That's pretty much the Intel experience to date.
Romanek: Doug, let me ask you a question or two. You said you
got 100 questions before the meeting. How did the responses work
internally? Were all the questions answered during the meeting? My guess
is not, but if not, then what was the process to determine which questions
would be answered? Were the questions that weren't addressed during the
annual meeting answered elsewhere?
Stewart: Every year, in preparing for the annual meetings, we go
through a process of pulling together people internally who have knowledge
of various hot topics or issues, everything from executive compensation to
conflict minerals and other social responsibility-type concerns. We put
together briefing books so that we have our answers and know how we're
going to respond.
The stockholder forum was actually a very helpful tool in that process.
Since we got some of the questions in advance, we could group them
together and prepare coherent answers. So we'd get, say, a one or two
dozen questions about executive compensation. Rather than answering each
one at the meeting, we would group them together and have an executive
compensation answer to hit all of the main concerns that were raised in
the questions. So that's what we did at the meeting.
Following the meeting, every individual question was answered. The
responses were sent just to the questioners. We haven't posted all the
answers on the forum as of yet. There have been some discussions about
whether we ought to or not, but at this point, that's where we are.
Romanek: Great, thanks. Lisa Beth?
Lisa Beth Lentini, Senior Corporate Counsel, Best Buy: I
work for Best Buy, and this was our first year doing a hybrid meeting. We
looked at the virtual component of the meeting as a communications vehicle
to enhance the experience of our shareholders, our employees, other
stakeholders and customers, and also as an opportunity to explain the
company's brand proposition in a very real way.
Best Buy's current brand proposition strategy is the "connected world,"
which is the concept that Best Buy can bring the technology which can
empower folks to connect to the content networks and people that they care
about most - anytime, anywhere, on any device. We looked at the virtual
shareholder meeting concept and said, "What better way to show the art of
possibility in the connected world than to add this virtual component and
additional communication features to our own shareholder meeting?" It
allowed us to show some of the amazing capabilities that are out there and
how they can be used in a practical and real way.
In addition to having the validated shareholder website, which you've
heard about, we provided live streaming of our meeting on our news
website, http://www.bby.com/. This
allowed shareholders who didn't want to be in a validated forum and just
wanted to stream the meeting the opportunity to do that. It gave the
media, our employees and all sorts of other stakeholders, including our
customers, the ability to see our meeting.
For some reason, a lot of annual meetings of shareholders seem to be
shrouded in mystery. We thought it would be great for there to be open
access and transparency so that there wasn't this cloud of mystery about
what happens during these meetings. Anybody can see it, and it's not
anything that is particularly mysterious or difficult to understand. We
also knew that a lot of people didn't want to make the trek out to
Richfield, Minnesota, no matter how beautiful Richfield is. We thought
that this was going to be an easier and a more cost-effective way for
people to be able to really engage.
We did a few things that were special for our shareholder meeting. We
created video biographies of our executive officers and our chairman of
the board, who also happens to be the founder of the company. With all the
changes that are coming up in the corporate governance landscape and the
executive compensation landscape, we thought it would be worthwhile for
shareholders to have a positive introduction to our executive officers and
The levels of trust in corporate America right now are at an all time
low, which I think most people are aware of. I personally believe that,
while it's really easy to vilify a faceless corporation, it's much harder
when you have real people that our shareholders can feel a connection
with. We thought these video biographies were a much more tangible way for
people to feel like they knew our executive officers, and that they were
much more real than a very stale written biography with either a
black-and-white or color picture. So we created these highly stylized,
extremely branded, short (90-second) video bio introductions for each of
these key players and we put them on the shareholder forum, which was the
validated site, on our investor relations page, and on YouTube. So anyone
could see them at any time.
We also had video attendance by a director. We think we're one of the
first companies to have a director attend a meeting virtually during our
virtual shareholder meeting. One of our directors had an executive meeting
for his company on the East Coast on the same day as our shareholder
meeting. Our governance principles set expectations of attendance for each
director at our shareholder meeting. So using technology, this director
was able to attend the meeting virtually through a video conferencing
connection. We used Best Buy products, including a large Insignia
television, so that all of our shareholders could see the "connected
world" come to life, and realize some of the benefits of having virtual
technology in everyday life.
Finally, we used social media extensively during our meeting. Obviously
we had the virtual shareholder meeting going on. We had people tweeting
from the meeting, videos on YouTube and live streaming on our website, so
that people could have a lot of access to the meeting and could very
transparently see what we were doing.
Romanek: You mentioned someone tweeting. But did you have
someone monitoring the online activity outside of your annual meeting
page, just to see what the people were saying about you?
Lentini: We always have people that are monitoring what's being
said about Best Buy, both on Twitter and on other blogging sites, because
Best Buy is highly branded and we sell technology. People are always
saying things, so we had a lot of folks looking to see whether there was
positive feedback, negative feedback or questions. For the most part,
there was a lot of positive feedback and really not any negative feedback
that we were able to identify. And people didn't seem to have a lot of
We had only two items on the agenda - the election of directors and the
ratification of auditors. So there wasn't anything particularly
controversial. But the virtual side of our shareholder meeting saw
participation increase dramatically - twice as many people logged in on
our virtual site as were in attendance at the meeting.
We had a satellite feed, and we were a little nervous about whether
this would work or not, so we had a lot of backup systems. I don't think
we'd do that in the future, because everything went seamlessly. I think
that with our first experience, it was good to have the backup
capabilities, but we feel comfortable at this point that we've got a good
plan going forward.
Romanek: Great, thanks. Scott?
Scott McMillen, Vice President, Charles Schwab: Thanks,
Broc. Like Best Buy, this year was the first year that we did a hybrid
annual meeting, where we offered both a physical and a virtual annual
meeting. I think we disagree with Carl's comment that what we did had
"limited" voting. What we set out to do was different than what Best Buy
and Intel did, in that we developed our own virtual meeting. What we tried
to do was mirror our physical meeting to the extent that we could.
Our process was somewhat evolutionary. We did look at prepackaged
solutions like the Broadridge System for virtual meetings, which we
thought was very impressive. But then we looked at what was important to
us in conducting a virtual meeting, and the communications piece was one
of our primary concerns. We worked very closely internally with our
corporate communications department, which had developed a virtual meeting
capability. We thought that we could be best served by using our own
virtual meeting platform, because we wanted to make it look like a company
event - I think many companies are doing that now. With respect to the
annual meeting, we started thinking about the things that we hadn't
previously offered, including the ability to ask a question and to vote.
We have been webcasting our meetings for a number of years. Like Intel,
we had seen a drop off in the number of participants at the physical
meetings. In 2000, we had upwards of 700 people attending our annual
meeting; it's dropped off to below 200 people at the physical meeting. So
we had started thinking over the prior year about how could we reach out,
perhaps promote our annual meeting more and give more people the
opportunity to participate.
Cathy, I think, talked about reaching out geographically, and that the
virtual meeting is a very neat way to do that. Given that about half the
people who participate in our annual meetings are employees, many of whom
are located across the country, we thought it would be really nice to
extend the annual meeting functionality where we would offer, in addition
to the webcast, the ability to ask a question and to vote as well.
When we started looking at our own capabilities and came to the
conclusion that we wanted to make it more like a company event, using our
own virtual meeting platform, then we had to think more deeply about how
we could offer the capability of participating in the meeting as though
you were a shareholder. We decided at least for this year, in 2010, that
to the extent possible we would just mirror everything that we do at the
annual meeting. So we set up a registration very similar to what you would
do at the physical event, where you pre-register. We've always done that
in advance of the meeting, and for a number of years we had offered that
capability online. So for our virtual meeting, you would go online and
register just as you would for the in-person annual meeting. We, like Best
Buy and Intel, also wanted to offer a webcast, so if you weren't
pre-registered or did not want to register or were not a shareholder, you
would have the ability to see the webcast. But registering for our annual
meeting permitted you to access the area that had the full functionality.
The voting piece, we decided to do, again, just by mirroring the annual
meeting. We already at the annual meeting have a ballot that we pass out
to shareholders who raise their hand and want to vote. For the virtual
meeting, we decided to mirror that. So we had the same ballot, and during
the time when the polls were open, a shareholder who was registered would
have the opportunity to fill out the ballot, just as you would at the
physical meeting, and submit it. The ballot went into a secure data file,
which was submitted to our transfer agent, who then authenticated the vote
in the same manner as they would at a physical meeting.
So that's how we treated the voting aspect of the annual meeting. We
didn't have the Broadridge solution, where shareholders are actually
dialing in to the polls, but we had a ballot system that was the same as
you would get at the physical meeting.
For the webcast annual meeting, we used to get about a dozen people who
would view the annual meeting externally, plus about 50 employees. In 2010
we doubled those numbers. We had about two dozen people who were
registered at the virtual meeting - there was just a handful who viewed
the webcast who were not registered. Internally, we had about 100
employees who participated in the virtual meeting. At our physical
meeting, our statistics there were similar to the prior year. We had about
150 people who were actually present at the physical meeting. So we had
about the same number of people at the physical and online meetings -
about 125 participants in the virtual meeting and about 150 people at the
When we set out to do the virtual meeting, one of our concerns was that
voting was going to be a big deal, especially since we were focused on the
communications piece of the annual meeting. Normally, at annual meetings,
when we pass out the ballot, we get anywhere from zero to three back. We
wondered how many we would get at a virtual meeting. Again, the statistics
there were underwhelming - we had six votes come back at our virtual
meeting. We didn't see any dramatic increase from what we were typically
seeing at our physical meeting, at least with respect to the voting piece.
With respect to lessons learned, one of the things that we had been
most concerned about was whether we could do it ourselves and develop
something using our own virtual meeting platform. It turned out to be a
lot simpler than we thought. At most virtual meetings that companies
conduct, there is already the capability to ask questions, and often there
are ballot capabilities as well. Adding the voting piece was not too
difficult to do at the virtual meeting.
The other lesson learned is that a virtual annual meeting really can
increase your outreach. Because this year was somewhat experimental, we
did not set out to promote the virtual component of our meeting. But we
noticed from the people who were signed up that it really did expand our
Almost all the people who registered externally were from locations
outside of San Francisco, where we hold our physical meeting. It was nice
to have that extra reach, and it was also nice from an employee relations
standpoint to be able to offer that participation across the country,
where previously we only had the ability for a webcast. It felt, both to
employees and to our shareholders, that they could really participate in
the full annual meeting. So our experience was very positive.
Romanek: Carl is always saying "Don't forget the employee
shareholders." I think that's a great point to make, Scott.
Broadridge itself had a virtual annual meeting. Cathy can speak to
Conlon: We had a virtual meeting this year, our first time
obviously, since we're a fairly new company. We spun off from ADP a few
years ago, so we haven't had a lot of experience with our own annual
meeting. We have held a couple of meetings in our corporate headquarters
in a conference room that did not get much attendance, and the annual
meeting was a fairly routine event for us. Clearly we wanted to use our
own platform to show the capabilities, and we were very happy with the
We had 184 attendees at our virtual meeting this year, which we thought
was a phenomenal number, especially in comparison to the handful we had
the prior years. Out attendance was divided about half and half in terms
of shareholders and non-shareholders. In terms of employee participation,
we had set up conference rooms throughout our locations to show the
meeting, so that our people could get a sense of the platform and get a
feel for what we were doing.
We had about 15 people logged in directly, but we had a lot of people
watching in conference rooms, so we had very good shareholder attendance
in terms of participating in the meeting this year. We had 22 votes come
in at our meeting, representing a small number of shares.
We had a shareholder forum to collect pre-meeting questions, and we
also did a survey of our shareholders. We had about 100 people participate
on that forum and we got quite a few of the surveys back. We had eight
questions before the meeting, and at the meeting we got 12 questions. We
committed to answering all the questions that came in, and we did so. Our
chairman and our CEO went back and forth and answered them all.
The feedback we got from our chairman after the meeting was, "I think
it's good, I loved how it went, and it was a very successful event for us.
However, nobody knows for sure that we answered all those questions." He
felt that there needed to be more transparency in the process in terms of
showing those questions. That's one of the reasons I mentioned before that
we're looking to add functionality to our platform that would allow a
company to show all the questions as they're being submitted. We thought
that was a very good suggestion, which answers some of the concerns in the
Just as an aside, we actually had a call center set up for our
shareholders who were having difficulty in any way, whether they had
questions or whatever. We've done this for other clients as well. There is
concern, since this is fairly new technology, so we set up a shareholder
support line. We got a handful of questions, mostly about where the
control number was, so people needed just to identify where they could
find that piece of information. That's consistent with the other companies
that we've done that for.
So I would say overall we thought that the results were extremely
positive from the feedback we received. We were clearly happy with the
results, and fortunately our senior management was very happy with them as
Romanek: Great. Well, I never heard Carl so quiet, so I know he
must be chewing off his leg somewhere.
Hagberg: No, this is really a fascinating discussion. I did want
to clarify something that I said about the audio feed only, and maybe this
is a way of looking at the issue in general.
Broadridge expects almost 14,000 annual and special meetings to take
place this year. That's a lot of meetings, and that's a lot of money and
preparation going into those meetings. And at all but a few hundred of
those meetings, nothing really happens. The meeting takes place, it takes
less than five minutes to conclude, and there's nothing controversial. So
there is really tremendous saving potential with virtual-only meetings,
for companies where there's nothing terribly exciting happening. But of
course, you have to give people a fair chance to be heard.
I think Warner Music still probably has their meeting posted. It took
10 minutes. It was strictly business - they were just transacting the
ordinary business of an ordinary annual meeting, and it was over in 10
minutes. I think Edgar Bronfman was disappointed that there were no
questions, but there was really nothing to ask. So for the vast majority
of companies there is a tremendous amount to be said for having meetings
only in cyberspace. Would I as a stockholder want to see a fancy video
camera and fancy production values? No. I would like to see this done lean
and mean and nice.
On the other hand, I think there are still a lot of companies that
couldn't have a virtual-only meeting and wouldn't want to. Companies that
are shareholder-oriented, that are locally oriented, or that have strong
brands, like Best Buy or Charles Schwab, may not want to have a
virtual-only meeting and exclude people.
We're seeing a fascinating evolution and really fascinating
opportunities to open meetings up to many more people. That's actually
been my pet peeve - that annual meetings have in many cases become
perfunctory, and they don't really do much for shareholders. I think this
is a wonderful way to strike the right balance.
And you don't have to do it the same way every year. Some years you may
want to have a big and elaborate disclosure, and other times there's
really nothing much and you just want to get the meeting over with as
expeditiously and cost effectively as possible.
This webcast has been, for me at least, a fascinating exploration of
the different changes you can make on the virtual meeting model.
I want to say one other thing, since I have been so quiet. We do have
to keep this in the back of our mind. With 14,000 meetings a year, if we
ever get to, say, 5,000 virtual meetings, you can bet your life that
someday, somebody will sneak up and engineer a "voting surprise." That's
not a reason not to have these meetings. But it is a reason to always be
cautious and well prepared for a meeting.
As sure as I'm sitting here, someday somebody is going to pull off a
surprise at a virtual-only meeting. But it will probably be 10 years from
Romanek: There could be that surprise today in person, but it
just doesn't happen that often. You're right, it would be much easier to
Hagberg: It does happen a few times a year in person, but
usually when there's a formal proxy fight. Of course, the opposition tries
to keep everybody in the dark until the last minute and then tries to fool
the management thinking they're winning and then surprise them.
Conlon: We do get asked that question a lot - will I get a lot
of votes at the meeting? Nobody wants a big swing in the position that
they're surprised by because of the virtual meeting. Because of the way
electronic voting works, an institution typically uses a voting platform,
whether it's proxyvote.com, which is our platform, or another one, which
consolidates their position and votes it. Those votes have to be in prior
to the meeting. So just by the nature of those systems, the really big
positions are not going to get voted at a virtual meeting. If there was a
very large individual shareholder who was not using one of those
consolidation platform, it's possible, but I think it's fairly unlikely. I
think that the good news for companies is that they don't really have to
worry - in the near term, anyway - about a big swing in their vote.
Hagberg: You're absolutely right. This is the remotest of
possibilities but eventually it will probably happen.
McMillen: Cathy is right about that. That's something that we
considered as well at Schwab, and we came to the same conclusion - that
most of the larger positions would be voted before the meeting as they
normally are and reflected in the preliminary results. When we thought
about the meeting, we thought to the extent that you could mirror
something that was happening at the physical meeting, we felt very
comfortable with putting that online in a virtual meeting. As Broc said,
there could be a surprise at the physical meeting, but if you had the same
capabilities and the same functionalities, the concern should not be
greater than it currently is.
Romanek: Great. I want to thank everyone for doing this program.
It has been very interesting. We really are at the pioneer stage of this,
but it's happening and it's real. I think it's an important webcast to
have. Hopefully we'll be doing some follow-up program, and hopefully you
all will still be doing your virtual meetings and I'll ask you to
participate. So thanks very much Scott, Doug, Carl, Lisa Beth and Cathy
for joining us today.