Tips on Shareholder Meetings

We have served as Inspector of Elections at over 500 shareholder meetings so far, and learned that Murphy’s Law is alive and well at these showcase events.  Here are a few tips to issuers that we have learned along the way:

  • Make sure everyone involved with the meeting has a copy of the chairperson’s script as soon as possible, so there is no confusion as to roles…and timing.
  • Have a sign-in sheet for every attendee.
  • Be clear on who can attend the meeting, and establish in advance what will be said to, say, a non-shareholder or a beneficial shareholder wishing to vote without a “legal proxy.”
  • Make sure the Inspector’s Oath is notarized in advance of the meeting.
  • Get and have at the welcome table the affidavit of mailing of proxy material (aka affidavit of distribution) from the Master Tabulator.*
  • Get and have available the company’s Omnibus Proxy from DTC, which is the last page of its “Security Position Listing.”
  • Make sure the record date shareholder list from the transfer agent, also available, is certified.
  • Get the Proxy Committee to officially vote its shares via Ballot of Appointed Proxies in advance of the meeting.
  • Do not use a “blank proxy card” as a shareholder ballot at the meeting, but rather produce one from the company’s own word processor; because, a blank proxy card instructs the Proxy Committee to vote the shares, whereas the Proxy Committee already voted its allotment through the Ballot of Appointed Proxies.  (A blank proxy card might be usable if only the front of the card is photocopied, and as a result the word “proxy” is omitted.)
  • Verify that the Inspector of Elections has double checked any “anomalous” electronic voting results with the Master Tabulator, and possibly the proxy solicitor if retained, as soon as those anomalies appear.
  • Suggest the Inspector have his/her final vote report (aka “Certificate of Inspector”) drafted before arrival at the meeting, so that – in the event no one votes at the meeting – it can be signed and delivered to the company before the Inspector leaves the meeting site, in plenty of time before the company’s press release and required 8-K or 10-Q filing.

We have found that at least two pre-planning conference calls between the company and the Inspector of Elections is good practice – 6 weeks and 10 days before the  meeting – supplemented by a final discussion just before the meeting if anything unexpected shows up in the meeting script.

Many companies we work with say they wonder why they went through all that trouble to conduct a ho-hum shareholder meeting.  We have two answers:  a) the alternative to a ho-hum meeting is no fun, to put it mildly; and b) a smooth and “event-less” meeting is clear and annual evidence of a well-run company.

*The Master Tabulator is the distributor and tabulator of registered shareholder proxies, usually the transfer agent.  In the event both registered and beneficial shareholder proxies are distributed and tabulated by a separate/single entity, like Broadridge, then it becomes the Master Tabulator.