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Forum Report: “Say-on-Pay” and “E-Meetings

Responding to Investor Information Requirements

Marketplace Adaptations

Regulatory Processes

The Shareholder Forum’s public interest programs for both “Say on Pay” and “E-Meetings” have ultimately focused on the same objective: improved communication between investors, who need information for their capital allocation and voting decisions, and corporate managers, who need to understand and respond to their investors’ decision-making interests.

This essential communication objective will require both marketplace and regulatory support.

Marketplace Adaptations

Participants in the Forum’s special project for marketplace practices have prioritized the development of two processes for availability in time to support 2011 investor communications:

   Independent Shareholder Verification – Responding to the need for “reasonable verification” of beneficial stock ownership as a foundation for shareholder communication rights, the Forum has partnered with a technology company to make an independent process available to companies or their selected registrars. The technology has been successfully tested, as reported last month. We plan to work with a few corporate users and service providers to develop application features and have it available for simple integration into any online communication process by December.

   Investor Surveys – The Forum’s development of investor survey methodologies[*] has made it possible to use this kind of quantitative research as a foundation for understanding and responding to investor interests. We will be defining practical service requirements in workshops to make investor survey research broadly available by January, either directly to those with internal market research expertise or through partnering professionals.

Anyone interested in either of these processes is welcomed to inquire about participation in their development.

Regulatory Processes

Those of you concerned with the definition of regulations supporting informed decision-making are encouraged to respond to either or both of two SEC invitations to comment.

As reported last week, the SEC has invited comments relating to its consideration of proxy system reform. The administrative processes of “proxy plumbing” are critical to effective information exchange between companies and their investors, and it is important that the SEC understand the priorities of the ultimate corporate and investor “users” of the information as well as the interests of the service providers supporting the communications. The SEC has asked that comments on proxy reform be submitted by today.

Addressing the Dodd-Frank provisions for “say-on-pay” and related voting and disclosure requirements, the SEC has now published its proposed rules for comment as summarized in the following press release (with links to the proposed rules):

  October 18, 2010, U.S. Securities and Exchange Commission press release: "SEC Proposes Rules on "Say on Pay" and Proxy Vote Reporting"

While some of you who had advocated selective adoption of company-specific advisory voting as it was initially presented in 2006 may be disappointed with the politicized transformation of “say-on-pay” into a mandated universal process, it is important now to accept the legislated requirements and focus on what should be done to make good use of the process. At the very least, this imposition of responsibilities on millions of investors to vote on pay at thousands of companies can benefit the marketplace by stimulating more effective delivery and analysis of decision-making information. That is something all of us want.

GL – October 20, 2010


Gary Lutin

Chairman, The Shareholder Forum

c/o Lutin & Company

575 Madison Avenue, 10th Floor

New York, New York 10022

Tel: 212-605-0335




[*] For an example of a general marketplace investor survey, see the recent October 6, 2010 Forum Report: Survey of Investor Communication Priorities for Voting Decisions; and for a publicly reported example of a company-specific shareholder survey, see the January 6, 2010 Forum Report: Survey of Information Needed for Voting on Settlement and Compensation Issues.




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.