Annual Meeting Conduct

In the past we have reported on various outrages that have sometimes occurred at annual meetings, like when Whole Foods Markets denied an opportunity for a shareowner proponent to to present their resolution before the vote was taken in 2006. Months later, they issued the following response (Hole Foods Digs Out, 7/2006):

After researching common practices with regard to the presentation of shareholder proposals at annual meetings, we have decided to allow some form of presentation during the formal portion of next years(sic) annual meeting from shareholders who have properly submitted a proposal which has been included in out proxy statement… and will work with our voting agent to improve the timing of the release of the final voting outcome for all proposals.

Broc Romanek has done a great service to both issuers and shareowner activist by publishing a recent survey regarding annual meeting conduct. Now companies won’t have to bother “researching common practices.” (Survey Results: Annual Meeting Conduct, theCorporateCounsel.net Blog, 7/20/10)

1. To attend our annual meeting, our company:

• Requires pre-registration by shareholders – 5.9%
• Encourages pre-registration by shareholders but it’s not required – 13.2%
• Requires shareholders to bring an entry pass that was included in the proxy materials (along with ID) – 5.9%
• Encourages shareholders to bring an entry pass but it’s not required – 11.8%
• Will allow any shareholder to attend if they bring proof of ownership – 57.4%
• Will allow anyone to attend even if they don’t have proof of ownership – 33.8%

2. During our annual meeting, our company:

• We hand out rules of conduct that limit each shareholder’s time to no more than 2 minutes – 20.9%
• We hand out rules of conduct that limit each shareholder’s time to no more than 3 minutes – 26.9%
• We hand out rules of conduct that limit each shareholder’s time to no more than 5 minutes – 4.5%
• We announce a policy that limits each shareholder’s time to no more than 2 minutes (but rules are not handed out) – 7.5%
• We announce a policy that limit each shareholder’s time to no more than 3 minutes (but rules are not handed out) – 3.0%
• We announce a policy that limit each shareholder’s time to no more than 5 minutes (but rules are not handed out) – 0%
• There is no limit on how long a shareholder can talk (subject to the inherent authority of the Chair to cut off discussion at any time) – 37.3%

3. For our annual meeting, our company:

• Provides an audio webcast of the physical meeting, including posting an archive – 25.0%
• Provides an audio webcast of the physical meeting, but does not post an archive – 7.4%
• Has provided an audio webcast of the physical meeting in the past, but discontinued that practice – 1.5%
• Is considering providing an audio webcast of the physical meeting but haven’t decided yet – 4.4%
• Provides a video webcast of the physical meeting (or is considering doing so) – 1.5%
• Does not provide an audio nor a video webcast of the physical meeting – 60.3%

4. At our annual meeting, our company:

• Announces the preliminary results of the vote on each matter (unless special circumstances arise such as a very close vote) – 92.7%
• Doesn’t announce the preliminary results of the vote on each matter – 7.4%

I don’t recall if Romanek has been doing this survey for several years but it would be nice to know which way some of these items are trending. I would fully expect more companies are offering webcasts but are they becoming more restrictive or less restrictive concerning entry passes and how long a shareowner can talk? More importantly, are meetings open to the press (if so, does anyone bother to attend?) and is the Q&A portion of meetings becoming longer or shorter?

The NIRI also conducted a similar unscientific poll, which also breaks down some information on what shareowner proposals have been submitted and acted on. However, because of the small sample size, it isn’t very helpful on those types of questions.  Hat tip to Gary Lutin for bringing the NIRI poll to our attention.