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Push or pull?
Jean-Marie Sanders has a vision of the future. But unlike most proxy
visionaries, this product manager at ChaseMellon Shareholder Services believes
e-mailing proxy materials and annual reports is a dead end. Instead, she
proposes online access: skip the arduous step of collecting e-mail addresses
and just make proxy materials available on the net.
'The response to the consent solicitation for online distribution has
been very low,' she says, with fewer than a third of shareholders voting via
the internet typically consenting to online distribution, and less than 5
percent responding to a hard copy consent solicitation prior to the annual
meeting. 'The way to go is online access.'
Rather than ask shareholders to consent to online delivery and submit
their email address -'an extremely convoluted process' - Sanders suggests
asking them to consent to online access then posting the annual report and
proxy statement on the web. 'You still have to mail a proxy card, but that
costs pennies,' says Sanders. 'You save the cost of printing and mailing the
annual report and proxy statement, which is significant, and companies can
realize those savings if they choose online access in year one rather than wait
until year five or six to collect enough e-mail addresses for online
distribution.'
Lucent Technologies, for one, has already pioneered the online access
method, and Sanders says that such pioneers have seen as much as 40 percent of
the registered shareholder base consent to view the proxy and annual report
online instead of receiving a hard copy by mail.
As ChaseMellon begins to explore online access, the firm has already
seen great success with an intranet distribution service aimed at employee
shareholders called VoteDirect. The issuer doesn't have to do a consent
solicitation, but simply sends an announcement e-mail then a notification
e-mail to employees, with proprietary links to the annual report and proxy
statement.
ChaseMellon first piloted VoteDirect for Microsoft in 1997, with the
software giant's fifth online vote slated for its annual meeting this fall.
Several other clients have benefited from the system, with vote return
percentages of 58-75 percent at companies that used to get only 10-15 percent
of the employee vote back. 'lt's a clean, neat procedure,' pronounces Sanders.
Neil Stewart, Investor Relations
August, 1999
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