New data and analysis on key shareholder voting trends and behaviors shows that although retail shareholders own 32% of beneficial shares, they vote only 29% of the shares they own.
The ProxyPulse report, produced by technology vendor Broadridge and PwC’s Center for Board Governance, covers 2,858 meetings held between Jan. 1 and May 23, 2013. This represents 55% of all meetings expected this season, says the report.
The report found that retail shareholders own 32% of the street shares but only vote about 29% of shares they own. Institutional shareholder ownership is highest at large cap companies and lowest at micro caps. Overall, 71% of street shares were voted; 62% of those by institutions, and 9% by retail. In the case of micro caps, although institutions owned 39% of the shares, they represented 63% of the shares voted. With low rates of retail participation that leave 71% of retail shares unvoted, companies should revisit strategies to encourage voting.
Eighty-one percent of all directors received favorable votes of at least 90%, and directors of larger companies attained more support than those of smaller companies. Ten percent of all say on pay proposals received less than 70% support, with micro cap companies showing the least amount of support. Proposals to declassify boards received significant support at companies of all sizes.
“Over the last few years, shareholders have continued to push boards to declassify their structure and hold annual elections for all directors. However, annual elections are significantly more pervasive at larger companies. Perhaps this is why more than three-quarters of board declassification proposals were at companies that are mid cap or smaller,” said the report.
New to this edition is “Political Spending Proposals” data. While companies are not required to disclose political contributions, some large cap companies have increased the transparency around contributions, partly due to shareholder pressure. These proposals, though, had low levels of support, with 98% of companies receiving less than 50% of shares voted in favor.
Shareholder Voting Report Reveals Low Levels of Retail Participation
New data and analysis on key shareholder voting trends and behaviors shows that although retail shareholders own 32% of beneficial shares, they vote only 29% of the shares they own.