Founded in 1969, NIRI is the professional association of corporate officers and investor relations consultants responsible for communication among corporate management, shareholders, securities analysts and other financial community constituents. The largest professional investor relations association in the world, NIRI’s more than 3,500 members represent 2,000 publicly held companies and $5.4 trillion in stock market capitalization.

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Everything is Coming up Proxy

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Everything is Coming up Proxy

As the summer congressional recess continues, eyes in Washington looked west this past week. The trial verdict announcement and news of the likely retrial of ex-governor of Illinois Blagojevich seemed to generate the most discussion around Washington. That was until the SEC announced August 25 (tomorrow) as the date for a final ruling on proxy access (expect a 3-2 vote). Will rumors of a required two year, 3% ownership threshold for shareholder nominated directors hold true? Institutional investors are pushing for lower thresholds, while corporations are pushing for higher thresholds (5% on individuals and 10% on groups). I will attend the meeting and will report to you next week. This Race to the Bottom blog post provides an excellent summary of why many companies are fearful about the unintended consequences of proxy access.

This week I return to the SEC’s proxy concept release and focus on facilitating retail investor participation and data-tagging.

Proxy Concept Release – Facilitating Retail Participation (pp. 78-96)

In this section, the SEC seeks to promote and facilitate shareholder voting in general, and in particular, voices its concern about the significant lack of participation by retail investors in proxy voting. A sampling of the questions include: Should issuers or brokers enhance their Web sites to provide the issuers’ shareholders or the brokers’ customers, respectively, with the ability to receive notices of upcoming corporate votes, to access proxy materials and to vote shares through their personal account pages? Should the SEC encourage the creation of inexpensive or free proxy voting platforms that would provide retail investors with access to proxy research, vote recommendations and vote execution? If so, how? Should the SEC consider requiring that companies using a “notice and access” model for distributing proxy materials be required to use that model on a stratified basis to encourage retail voting participation? Should the SEC regulate fees charged by notice and access providers?

Proxy Concept Release – Data-Tagging Proxy Materials (pp. 96-104)

In this section the SEC examines whether data-tagging the proxy in an XBRL style manner might enhance the level and quality of shareholder participation in the process. Questions include: Should the SEC require issuers to provide proxy statement and voting information in an interactive data format? Should executive compensation information be data tagged?

Last week NIRI issued an Executive Alert on the Proxy Concept paper. The NIRI National Board and I really want your insight and contributions as we prepare for a meeting with the SEC and related comment letter. Your help in the form of thoughts and examples would be greatly appreciated.

In NIRI news, I attended the revamped NIRI/University of Michigan Investor Relations certificate program last week. The changes made in the program this year were terrific. Included were new topics like “cross cultural aspects of dealing in global capital markets,” “persuasive communications” and “effective disclosure research.” While next summer seems a long way off, 2011 budget planning is just around the corner and I encourage you to consider adding this program to your budget.

For those new to IR - less than five years experience – it isn’t too late to attend NIRI’s Introduction to Investor Relations September 12-15 in Boston. Finance Essentials for IR is also open for registration and will be held September 16-17 in New York City. Seats are limited, so do not delay in registering. This recently launched program is recommended for anyone seeking the key financial tools to engage finance professionals ranging from the CFO to the buy- and sell-side and financial media.

Until next week,

Jeff Morgan, CAE
President & CEO
jmorgan@niri.org
www.twitter.com/jeffreydmorgan

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National Investor Relations Institute

Everything is Coming up Proxy