Electronic Participation in Shareholder Meetings
Review of 2011 Shareholder Meeting Practices
The annual BNY Mellon Shareholder Services report of its corporate
clients' shareholder meetings was released this morning, and can be
downloaded from this link:
The report includes the following observations relating to issues
addressed by the Forum's "E-Meetings" program, particularly the
supported by most of our corporate and investor participants and the
variant "Fifth Analyst Call" proposed by
a group of activist fund representatives:
important trend we continue to observe is the “down-sizing” of the
physical meeting itself. Last year we noted that meetings were shorter
and less elaborate than meetings of the past. This year that trend
continues, with over 90% of those clients for whom we captured data
holding their meetings in company offices. Additionally, almost 60%
either offered no refreshments at all or only offered beverages. The
number of meeting attendees continued to decline as well.
While this trend might not seem significant, it is evidence of the
underlying decline of the physical meeting. It appears that fewer
companies are using the meeting as a marketing or public relations
tool and that fewer shareholders are making an effort to attend the
annual meeting. This trend has led to speculation that a required
in-person annual shareholder meeting may eventually be replaced by
shareholder forums, the controversial “Fifth Analyst Call” on
corporate governance, or an audio broadcast and/or Webcast.
proxy development this year has been a request by some investors
that companies arrange a conference call that focuses on corporate
governance. This would be a “Fifth Analyst Call,” following the
quarterly calls with analysts to discuss strategy and financial
Industry participants have raised concerns about the advisability
of holding a Fifth Analyst Call and its potential impact on
Regulation FD. The concern is that a “by invitation” meeting
chaired by an investor and with director participation could
result in discussions that stray from corporate governance and
into areas that affect compliance with securities regulations.
Addressing another issue that had interested Forum participants,
concerning eligibility for attending meetings, BNY Mellon reported that
47% of the companies for which they collected data did not allow anyone other than shareholders to
attend and another 15% only allowed the shareholder to bring one guest.
The remaining 38% of companies allowed any number of guests.
Your comments and questions will of course be welcomed.
August 31, 2011
Chairman, The Shareholder Forum
c/o Lutin & Company, 575 Madison Avenue, New York, New York 10022