Corporate Governance

Getting the Vote out Strategy in the Proxy Context

By J Robert Brown Jr.

Its now widely known that posting proxy materials (the statement and annual report) results in a decline in voting by retail investors.  This is not unexpected.  While most shareholders presumably have access to the Internet, a much smaller percentage are comfortable and facile with conducting business on the web.  This will change with time. 

Nonetheless, we note that some companies are employing creative strategies to avoid these problems and get retail shareholders to vote.  In particular, Peggy Foran, a leader in the corporate governance area, has apparently implemented a policy at Prudential.  According to CFO.com:

• Prudential Financial is experimenting with a promotion for its 2.4 million registered shareholders. Those who vote in the 2010 proxy season can choose to either receive an organic tote bag or have a tree planted in their honor. "We had to figure out how to engage shareholders, how to incentivize them, without bothering them," says Peggy Foran, Prudential's chief governance officer. If the program turns out to be effective, Foran says the firm may extend it to retail voters in future seasons.

Increasing shareholder participation and improving the enviornment.  Were voting in political elections only that rewarding!

Full post as published by The Race to the Bottom on April 18, 2010 (boomark / email).