New website promotes proxy plumbing changes
Computershare along with four other transfer agents today launched www.reformtheproxysystem.com. The site is designed to fan the flames around the SEC’s proxy plumbing concept release and its comment period ending October 20.
After years of lobbying by the issuer community, the SEC is finally looking at fixing a broken proxy voting system. Reforms could include allowing issuers to identify objecting beneficial owners (OBOs), opening the business of proxy distribution to competition, and introducing rules for proxy advisers such as RiskMetrics/ISS. Many investors, on the other hand, want to keep the status quo.
The new website opens with dramatic music, strident text and images of a brick wall tumbling down. That leads into a lighthearted, two-and-a-half-minute, animated video, ‘Stop the madness! Influence the vote!’, portraying Tom, a hardworking small investor, and Bob, CEO of the Big B Company, who are both frustrated with the proxy system.
Computershare and Georgeson, its proxy solicitation division, unveiled the site in conjunction with American Stock Transfer, BNY Mellon Shareowner Services, Continental Stock Transfer and Registrar and Transfer Company.
Paul Conn, Computershare’s president, global capital markets, says some aspects of the SEC’s concept release have been well covered in the media, including the role of proxy advisers and voting influence problems like over-voting. But voting mechanics, including the need to communicate easily and cheaply with OBOs, have been largely ignored.
‘I think we’ll see the campaign on both sides stepping up over the next three weeks,’ Conn predicts. ‘With the video, we’re using social media to talk about a deep-rooted market structure issue.’
While the site is targeted at issuers, the animated video appeals to investors as well, and at a level accessible to anyone, not just experts in the finance industry. The site also has a video of Mary Schapiro from the SEC’s July meeting launching the proxy concept release, plus links to the release itself, the Shareholder Communications Coalition and other resources. There are sharing buttons, a link to Computershare’s Twitter feed, @proxyreform, and instructions on submitting comments to the SEC
Conn says the issuer community is heavily focused on changes coming out of the Dodd-Frank financial reform bill, including proxy access and say on pay, but is not paying enough attention to proxy plumbing. ‘With those changes coming, issuers can’t forget the operational processes they’ll be left with,’ he says. ‘This may be the only opportunity they have to get this piece of the equation right, and they have to communicate that to the SEC.’