The Shareholder ForumTM

Electronic Participation in Shareholder Meetings

Forum Home Page [see Broadridge note below]

"E-Meetings" Home Page

"E-Meetings" Program Reference


For the press release and full report to which the article below refers, see

Note: Broadridge was one of the companies that provided invited leadership support of the Shareholder Forum's 2010 "E-Meetings" public interest program to develop standards for electronic communications relating to shareholder meetings. The Securities Transfer Association is partnering with the Shareholder Forum to make the required communication tools broadly available.


Securities Technology Monitor, October 7, 2011 article


Proxy Mailing Costs: Are Transfer Agents Cheaper Than Broadridge?

October 7, 2011
Chris Kentouris

The trade group representing stock transfer agents and Broadridge Financial, the world’s largest proxy mailing firm, are still coming to blows over just who would be cheaper to mail proxy materials to “Street-name” shareholders.

In the latest salvo, the Securities Transfer Association has just come out with yet another study to prove that corporations are spending too much money sending their proxy materials through Broadridge. Its answer: rely on a “market-driven” solution – notably transfer agents which already provide recordkeeping work for registered shareholders.

The STA’s study is aimed at persuading the Securities and Exchange Commission, now studying how to change the “proxy plumbing” process, to allow corporations to send proxy materials directly to Street name shareholders instead of through their brokers and banks.

Doing so will open up the proxy mailing process up to competitive bidding – issuers can pick who they want. Such a scenario would reduce the costs of distribution, the STA claims. Broadridge’s response: it can do the job better and at a lower cost than anyone else.

The STA’s study released earlier this week is the second one done by the STA. A previous analysis which came to similar conclusions was done with a far smaller pool of invoices. The STA’s new study of 20 invoices sent to issuers by Broadridge showed that companies could save an average of 42 percent for distributing annual meeting materials based on a study of twenty companies.

As a group, these 20 companies could save more than $1.6 million in proxy processing fees, or an average of $80,081 per company, under a competitive market system, the STA claimed. A full copy of the survey can be found on

“The latest survey by the STA consists of twenty imaginary prices for services it doesn’t offer, has no idea how to perform, and would never have to deliver,” says Chuck Callan, senior vice president of regulatory affairs for Broadridge in a statement to Securities Technology Monitor on Friday morning. “The STA continues to dodge requests to disclose its rate cards. Its data does not reconcile to any published rates.”

Callan went on to say that although the STA has been interested in providing proxy distribution services for Street-name shareholders that are better, faster, cheaper and more accurate than competitors “its interest is free from any commitment to write the check.”

He suggests that the “market-rates” for proxy mailings to Street name shareholders could come out to be far higher than the regulated rates. The reason: a study conducted by Compass Lexecon, an economics consulting firm on behalf of Broadridge which examined over 12,000 invoices for “actual work performed,” showed that the market-based rates issuers pay Broadridge for delivering proxies to registered shareholders are “substantially higher” than regulated rates for sending proxies to Street-name shareholders.

Transfer agents distribute proxy materials to shareholders who are registered directly with a public company. These agents compete with one another to provide these services to more than 12,000 public companies in the United States. Broker-dealers and banks are responsible for distributing proxy materials to so-called “Street name” shareholders who hold their accounts in the name of their financial intermediaries. Instead of doing the work on their own, they hire Broadridge to do it for them.

However, the bill is paid by corporations who don’t have a say in who the broker-dealers or banks select. The fees charged by Broadridge for these services are currently established by a regulatory fee structure approved by the U.S. stock exchanges and the SEC.

The STA says that its recent survey included companies with as few as 110 shareholders to more than 2 million shareholders. The savings ranged from 13 percent to 80 percent for all of the invoices except one. The STA says that the only invoice which didn’t show any savings involved a company with 110 shareholders. The “average transfer agent price” was $133 higher than Broadridge’s quote.*

“These results show that a proxy processing system subject to competitive market pricing is significantly less expensive for public companies than a system in which prices are established by regulatory rules.,” said the STA.

For companies with 5,000 or more owners, no individual transfer agent quote—including the cost of obtaining a list of owners from brokers and banks—exceeded the Broadridge invoice for the same number of owners. The cost savings were more significant as the number of owners increased, with an average of 50 percent in potential cost savings for companies with 5,000 or more owners.

The STA also says that its survey also documented more than $700,000 in unnecessary charges for processing proxy materials for individuals who typically do not receive annual meeting materials in broker-dealer managed accounts. A substantial majority of these investors have delegated investment and proxy voting authority to an investment adviser. “Public companies should not be charged for any investor who elects not to receive annual meeting materials, pursuant to an account agreement with his or her financial intermediary,” says the STA.


©2011 Securities Technology Monitor and SourceMedia, Inc.



* The article's author explained that the average higher price reported in this sentence was meant to refer only to the single company with 110 shareholders described in the previous sentence, and not to prices for other companies addressed earlier in the paragraph. For the source of this information, see paragraph #6 of the STA's October 3, 2011 press release.




This Forum program is open, free of charge, to anyone concerned with investor interests in the development of standards for conducting shareholder meetings with electronic participation. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

The organization of this Forum program was encouraged by Walden Asset Management, and is proceeding with the invited leadership support of Broadridge Financial Solutions, Inc. and Intel Corporation to address issues relevant to broad public interests in marketplace practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can provide both expertise and examples of leadership relating to the issues being addressed.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.