It is important for companies to recognize changes in corporate governance, as the shareholder conference season is approaching rapidly. Therefore, companies need to know not only which institutional investors have their own shares, but also how they behave. For example, do they outsource voting decisions, or are they made internally? And if a decision is made in the company, which team will own or participate in voting decisions? Investment team or steward ship team? And which institutions lent inventory to make the water area more muddy, do it reduced the status of stocks that were advantageous on the record date? In order to provide accurate roadmaps, Alliance Advisors has outlined five important considerations that companies must undertake before making a final decision.
1. Analyze shareholder -based and determine how the person who owns shares and how to vote will be made. All companies need to complete the analysis of institutions and retailers that hold company shares. Many company executives will know who owns their inventory, but they are not because the institution is hidden behind Casodian. Shareholders' profile analysis identifies a true institution shareholder that has direct economic interests in the company's shares.
If you know who the true institution shareholder is, your agent will help you understand the influence of the influential of the proxy dwizeaty company ISS and Glass Lewis. With this knowledge, you can determine where to focus on energy. In other words, if someone strictly stick to ISS, you may be determined that it is not worth it with the investor.
It is also necessary to determine whether the voting decision is performed by the investment team, the steward ship team, or two combinations. In the event of a negative recommendation or voting, it is important to target the appropriate group to disable negative voting or recommendations. In many cases, the relationship between investors can be very valuable over compensation or corporate action -related proposals.
2. We carry out stock loan analysis. In today's environment of minimal management fees, institutions are increasingly dependent on lending shares to make the revert, which is particularly high, to make it more advantageous.
For companies that are very interested in stocks, stock loan analysis identifies the best institutions to lend shares and summarize the impact on voting shares. For example, large -scale institutions such as Vanguard and Blackrock can maintain considerable interests in the company's shares, but in consideration of maintaining a robust securities loan, lends it to a shortseller for the record date. Many of the shares voted. Usually, those votes are lost because empty selling and institutional shareholders do not match. This is forcing additional solicitation to believe that the expected friendly voting believed that they had at hand, and would be replaced from other sources. Furthermore, if this analysis is not performed in advance, companies may not know that there is a problem until the voting is usually rolled in.
3. Check if the director is vulnerable to negative voting. Confirm the proxy voting policy and guidelines of the institution to determine whether the director's candidate violates gender diversity, overboard or excessive “compensation compensation, sufficient disclosure deficiency. Useful for reducing surprises when the passive shareholder is increasingly used to change the number of directors. Is the most successful company in the end of the voting or other important voting items with investors.
4. If you want to present a new stock plan or modify the existing plan to increase the shares, calculate the numbers before going to vote. Look at your historical burns and overall dilution, and compare them with your top investors and agency advisory companies. Investors and advisory companies are also thinking about the qualitative characteristics of the plan and how they affect their voting. We provide a story about why your reward program is effective and works well in your company to enhance shareholder value. Tell investors why performance payment methodology is well functioning and that it includes business strategy context. Explain how to make a reward program advancing the company.
This helps to maximize the possibility that voting results will succeed, save time to solicit unnecessary fees from specific consulting companies and investors to support plans.
5. Don't forget the retail investors. Even if retail investors do not occupy most of the shareholder bases, this may become a good group of investors to target if they are facing challenging votes. In many cases, our experience shows a close voting, indicating that retailers invited by a proxy lawyer become a different manufacturer that promotes the proposal of the finish line.
It is not unusual to see 10 % of voting for controversial proposals. To overcome 10 %, about 30 % (3 to 1 ratio) of registered shares and unpaid shares represented by NOBO shares to fill the gap. If you are solicited by a proxy solicitation agent, retail voting will generally support management at a ratio of 9 to 9.
Shareholders are no longer a three -month event. Companies need to be prepared in advance with a proxy lawyer to confirm that the appropriate shareholder engagement and share owner analysis campaigns are being implemented.
The well -prepared companies know who the shareholders are, what the voting tendency is, and how to vote before the power of attorney is written.
