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Coming Soon: California Legislature to Fix E-Proxy Problem

By broc

Coming Soon: California Legislature to Fix E-Proxy Problem

Last week, as an "urgency measure," a bill sponsored by the California Corporations Committee was finally introduced in the California Legislature to address the e-proxy problem that I have been blogging about. It requires a 2/3 vote - but would take effect immediately if passed. Thanks to Keith Bishop for continuing to keep us apprised of the latest.

Broadridge's Latest E-Proxy Stats

In our "E-Proxy" Practice Area, we have posted the latest e-proxy statistics from Broadridge. As of January 31st:

- 96 companies have used e-proxy so far

- Size range of companies using e-proxy varies considerably; all shapes and sizes (eg. 38% had less than 10,000 shareholders)

- Bifurcation is not being used as much as I would have thought; of all shareholders for the companies using e-proxy, only 5% received paper initially instead of the "notice only"

- 0.76% of shareholders requested paper after receiving a notice

- 62% of companies using e-proxy had routine matters on their meeting agenda; another 30% had non-routine matters proposed by management; and 8% had non-routine matters proposed by shareholders

- Retail vote goes down dramatically using e-proxy (based on 61 meeting results); number of retail accounts voting drops from 18.3% to 4.4% (over a 75% drop) and number of retail shares voting drops from 28.8% to 12.6% (over a 55% drop)

Our "Voluntary E-Proxy" Survey Results

Here are the survey results from our recent "Quick Survey on Voluntary E-Proxy," repeated below:

1. Does your company intend to use voluntary e-proxy this year?
- Yes - 33.8%
- Maybe, not decided yet - 13.0%
- No, but maybe next year - 48.1%
- No, we will never use it since we intend to continue to send paper - 5.2%

2. If the answer to #1 is not "Yes," which of these reasons did the company consider?
- Concerned about reaching quorum - 21.6%
- Timeframe is too tight to complete proxy materials - 33.3%
- Timeframe is too tight because board/board committee meeting dates pre-set - 13.7%
- Too many shareholders will want paper - 19.6%
- Want to see how other companies fare with e-proxy - 74.5%

3. In case shareholders request paper, we intend to print this amount of proxy materials:

- 7% or greater - 56.5%
- 5-6% - 17.4%
- 4% - 5.8%
- 3% - 2.9%
- 2% - 1.5%
- Less than 2% - 7.3%
- Print materials on demand (such as making Xerox copies) - 8.7%

Please take a moment to answer this new "Quick Survey on More on Blackout Periods". Always a popular topic, we periodically conduct this type of survey, but it has been three years since the last one...

- Broc Romanek

Full post as published by The Corporate Counsel.net Blog on February 27, 2008 (boomark / email).