The SEC announced that it will hold a roundtable on February 19, 2015 to explore ways to improve the proxy voting process.
The roundtable will be divided into two panel discussions:
- the first panel will focus on (i) the state of contested director elections, and whether changes should be made to the federal proxy rules to facilitate the use of universal proxy ballots by management and proxy contestants, and (ii) state law, logistical and disclosure issues presented by a possible universal proxy ballot process;
- the second panel will focus on (i) strategies for increasing retail shareholder participation in the proxy process, (ii) how technology might affect retail participation, and (ii) whether the format of disclosure could be improved to increase the engagement of shareholders and how the mechanics of voting could be improved to affect retail shareholder participation.
Lofchie Comment: Retail investors comprise a very small portion of ownership in the stock market. It is doubtful that an increase in their participation would affect voting rates meaningfully. Further, retail voters are unlikely to bring some special knowledge to the proxy process that makes a good result more likely. Even if, in theory (and it is difficult to identify one) a retail investor might make a better voting decision than an institutional investor, it is hard to imagine why it is worth the retail investor’s evenings poring over competing proxies. Better they should spend that time in more worthwhile pursuits like reading (1984, an appropriate classic), seeing a movie (perhaps A Most Violent Year), watching a dance concert (anything by Ohad Naharin) or getting geared up for the Super Bowl (go Patriots!).
See: SEC Press Release.