The Shareholder ForumTM

Electronic Participation in Shareholder Meetings

Forum Home Page [see Broadridge note below]

"E-Meetings" Home Page

"E-Meetings" Program Reference


IR Magazine, April 22, 2010 article


Crossbow logoPeople on the street

Notice and access use rises on last year

Apr 22, 2010

Jump comes despite broker vote change

The use of notice and access (N&A) is up on last year among both large and small issuers, according to new data from Broadridge Financial Solutions.

Issuers that used the notice model stood at 821 for the period July 1, 2009 to March 31, 2010. This compares with 526 over the same period the year before.

Breaking this down, the number of large companies (defined as having more than 300,000 beneficial positions) using N&A rose to 57 over the nine months to the end of March, up from 45 during the previous year. Smaller companies (defined as having less than 10,000 beneficial positions) also saw the number of users jump, from 175 to 295 year on year.

The numbers cover only the first part of the 2010 proxy season and the full-season results will not be out until early July, but the stats do provide some insight into the attitude corporates are taking toward N&A in its third year.

Despite evidence N&A adoption lowers retail voting at the annual meeting, repeat use of the notice model is high, the data reveal. In the nine months to March 31, the number of repeat users of N&A rose to 577, compared with 177 the year before.

This suggests issuers have not deserted N&A following the SEC’s decision to eliminate the broker vote in director elections, which may further lower retail participation during this year’s proxy season.

‘The behavior of companies is that those that use it, use it again,’ comments Chuck Callan, senior vice president of regulatory affairs at Broadridge Financial Solutions.

Cost savings also rose, from $124 mn to $138 mn net of notice fees, estimates Broadridge. ‘There are significant dollar savings on printing and postage and that is reflected in the usage, including the repeat usage,’ says Callan.

Overall, the data show the amount of eligible jobs using N&A rose from 22 percent to 29 percent, while the number of beneficial shareholders covered by N&A climbed from 24 mn to 27 mn.

There are a number of reasons why issuers might still choose to sit out N&A. One is the SEC’s recent change to Rule 452, which blocks brokers from voting uninstructed shares – mainly retail shares – for director elections.

As N&A may also lower retail participation, some feel this year it is safer not to adopt N&A, as to do so would put extra pressure on the retail vote. ‘Some companies have indicated they did not use N&A because of concerns about the broker vote,’ notes Callan.

Indeed, Johnson & Johnson’s senior counsel and assistant corporate secretary, Doug Chia, told IR magazine’s sister publication Corporate Secretary earlier this year that ‘the elimination of 452 is enough of a factor for us to believe this is not the year to be experimenting with notice and access, whether stratified or not’.

Another reason, points out Jeff Morgan, NIRI’s CEO, is that the notice model may not make financial sense under some conditions. ‘Once they start doing the segmentation, companies may feel it’s not cost-effective. I’m thinking of companies that have a lot of retirees or former employees they want to send all the materials to anyway,’ he explains.

By Tim Human




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.