US investors concerned about the delays in the official announcements of voting results are not waiting for the SEC or New York Stock Exchange to make new rules but are taking matters into their own hands. Just as in Europe, best practice about voting results disclosure is extremely variable but proposals submitted by the New York City Pension Funds asking some companies to speed up the release of voting results appear to be making their mark.
For the first time, four proposals have been submitted to Google, Lattice Semiconductor, Massey Energy and Consol Energy, asking them to establish a clear disclosure policy so that preliminary results would be made available within five working days if they are not available at the meeting
Google and Lattice Semiconductor agreed to adopt the policy, Massey Energy agreed after the vote received 50.1% support. Consol Energy shareholders voted on the resoltuion it’s 28 April meeting, but despite a request from the New York City Comptroller’s Office the company has not disclosed the outcome.
Voting disclosure has become especially important to investors because of the high profile proxy contests and vote no campaigns which have gathered momentum in recent years. A recent example of the disclosure lag is Target Inc which, three weeks after its highly contested AGM has yet to disclose the final outcome of its proxy battle with Pershing, despite its announcement that three incumbent directors did not receive shareholder support at the ballot box. Investors have also highlighted how difficult it is to get a sense of real investor sentiment when the majority of the results include Broker votes which if left un-voted by the underlying beneficial owners tend to be voted in favour of management. The status of Broker Votes is currently under review by the US authorities.
Commenting on the voting results initiative New York City Comptroller William Thompson Jr. said: ““Expedited disclosure of vote results would allow the proponents of shareholder proposals and the boards and management of companies more time to reconsider and engage in meaningful dialogue on proposals, thereby increasing the opportunities to resolve disagreements and achieve positive outcomes.”
Within the EU voting results disclosure has seen dramatic improvements in recent years, with some made available on-line within minutes of the meeting closing but some companies, such as Ireland’s Ryanair who have yet to disclose almost one year on, seeing AGMs as very low priority. Since Manifest started its lobby for improved vote results disclosure in the mid 1990’s, the majority of companies now publish some sort of voting results. Unfortunately there are still some vague Regulatory News Announcement referring to resolutions “passed on a show of hands”, without a detailed breakdown of support and dissent. This can mean resolutions receiving up to 49.9% dissatisfaction and shareholders may never know about fellow shareholders’ concerns. Even more difficult can be the results which are embedded in foreign language meeting minutes which are not be published for up to three months after the meeting.
Manifest’s policy position is that the sentiment of shareholders and their support or otherwise of management is an important market driver. To favour shareholders attending the meeting with more advantageous disclosure is therefore akin to “inside information”, which is not acceptable in the trading markets where all shareholders are expected to receive equal treatment. The final voting results should therefore be made available on the company’s website within 48 hours of the final tabulation at the very latest so that there is a fair treatment of all shareholders.