Shareholder Engagement: Optimizing Proxy & AGM Processes

If you’re feeling overwhelmed with designing proxy communications and end-of-year annual shareholder meetings, these five shareholder engagement tips can not only can help make the complex processes more manageable, but also more effective in reaching and engaging investors and shareholders.
 
Tip 1: Consider your goals and key audiences
Important question: Is it “disclosure” or “communication”?
 
You’re trying to reach a busy audience of institutional investors who typically don’t have time (or interest) in reading 70 pages. In order to turn a passive reader into a captive one, focus on key information.
 
In other words, simplify your communication.

• Keep your information clear and concise
• Provide a detailed table of contents to direct readers to content of interest
• Consider including a proxy summary to highlight key information to expand on later in your proxy statement

Tip 2: Tell your best board story
The CEO may represent the face and voice of a company, but it’s crucial to use board members to give year-end communications authority and credibility, too. Highlight the skills and qualifications of your board nominees.

• Outline key attributes and qualifications
• Consider incorporating photos to allow readers to connect with nominees
• Consider highlighting span of strengths by incorporating a skills matrix

Tip 3: Have a clear explanation of your compensation programs
Describe clearly how your compensation programs align with the business model and your efforts to grow shareholder value.

• Recognize that your CD&A will likely be the first destination in the proxy for most readers, as well as the most highly-scrutinized section
• Only include graphs if they can make a key point quickly and support your story

Tip 4: Make sure your document is easily navigable
Proxy communications can contain a lot of information, with some details being more important to investors than others. Be sure it’s easy to find your key information.

• Include a hyperlinked table of contents
• Have clear headings, sub-headings, and page headers and footers
• Use design to help guide the eye to key information
• Include shading, callout boxes, checklists, timelines and other visual elements

Tip 5: Institutional and retail investor reading/voting preferences differ. Give your investors options.
The Notice and Access Form that companies are required to send makes it easy for investors to choose how they view proxies and vote. Now, investors can also request printed financial materials, which used to be the standard for financial communications, or simply access them on the investor relations website. Just be sure your team makes it easy for investors and shareholders to choose for themselves.

• Many larger institutional investors prefer to view proxies online
• On average, retail investors are more likely to vote when they receive a “full set” of hard-copy materials rather than a “notice of internet availability”; so make these available if you value their votes