Don't Let Them Get Away With Stealing Elections

Glyn Holton’s How To Steal a Corporate Election informs us of recent outrages on how elections are tipped in favor of entrenched managers and boards. If you’ve taken the time to read his post, I urge you to take another five minutes to help remedy the situation.

To address the situation at American Tower Corporation (AMT) send e-mails to the Office of Chief Counsel at [email protected] and the Chairman at [email protected]. I also recommend you fill out the complaint form, since this will go to the Division of Enforcement, the office that could take action. I recommend you write something like the following (subject line: American Tower Corporation – Violation of Rule 14a-4(a)(3)):

American Tower Corporation (AMT) is utilizing a Voter Information Form (VIF), which includes Item 04. While it appears shareowners are being asked to approve the idea of say-on-pay votes (now required by Dodd-Frank), they are actually being asked to approve a say-on-pay vote.

SEC Rule 14a-4(a)(3) states the proxy “shall identify clearly and impartially  each separate matter intended to be acted upon, whether or not related to or conditioned on the approval of other matters, and whether proposed by the registrant or by security holders.” The SEC should apply all requirements for proxy statements, such as Rule 14a-4(a)(3), to VIFs. The wording of AMT’s Item 04 is clearly meant to deceive voters. Retail shareowners deserve the same protections as sophisticated institutional investors.

HoIton also raises the issue that when voting on Broadridge’s ProxyVote.com, blank votes turn magically into votes for management. I ask you to take two quick actions.

First, avoid much of the blank vote issue right now, at least for the votes you cast, by always voting on MoxyVote.com. They use Broadridge’s electronic voting platform too and can’t submit a VIF back to Broadridge without populating (gathering a vote from a user) every item on a ballot.  However, their system lets you set up your own default, instead of automatically having your blank vote go to management.

To do so, simply log in to your account at MoxyVote, go to:

  1. My Profile
  2. Down the left column, hit the button that says “Prioritize and Manage”
  3. In about the middle of the page, you’ll see “Default Voting Positions” with the choice of voting
    1. abstain
    2. with the board’s recommendation
    3. against the board’s recommendation

I’ve got mine set to abstain whenever I leave an item blank. You may want to set yours differently. Using MoxyVote, at least you have a choice right now. You won’t find that at ProxyVote.com, the platform that most brokers send you to. If you don’t have a MoxyVote account, set one up; its free.

Second, since most shareowners still use ProxyVote, we still need a change in the rules by the SEC regarding how blank votes are counted. VIFs still need to follow the rules applicable to proxies, like providing an unbiased description of each item to be voted on. These descriptions will continue to slant votes to management unless the SEC requires a level playing field, so it is important to comment to the SEC about these issues. Fortunately, Holton, I and others have already petitioned the SEC on this issue, so all you need to do is to sign on.

Send comments to [email protected] with File 4-583 in the subject line. Here’s a generic suggested comment (I’m sure you’ll want to use some of your own wording):

As a retail shareholder, I was shocked to learn that my blank proxy votes are being turned over to management. Who has the time to read through all those proxy materials? Sometimes I leave blanks when I’m not sure how to vote. That doesn’t mean I want to turn that vote over to the “soliciting committee.”

When I leave a field blank, I want it to stay blank. It is no wonder that CEOs and boards seem so entrenched. The SEC is allowing my vote to be given to management! Please take up the petition to “prohibit conferring discretionary authority to issuers with respect to non-votes.” Blank votes should be considered abstentions. Please take immediate action on petition File 4-583 to end blank votes going to entrenched managers and boards.

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2 Responses to Don't Let Them Get Away With Stealing Elections

  1. James McRitchie April 28, 2011 at 11:16 am #

    We still need your e-mails to the SEC. I got the following, more or less canned response:

    Dear Mr. McRitchie:

    Thank you for your correspondence dated April 23, 2011, which has been forwarded to the Office of Investor Education and Advocacy (OIEA).

    We appreciate your alerting us to your concerns regarding American Tower Corporation. OIEA processes many complaints received from individual investors and others. We keep records of the correspondence we receive in a searchable database that SEC staff may make use of in inspections, examinations, and investigations. In addition, some correspondence received by OIEA is referred directly to other SEC offices and divisions for their review.

    The SEC conducts its investigations on a confidential and nonpublic basis and neither confirms nor denies the existence of an investigation unless the SEC brings charges against someone involved. We do this to protect the integrity and effectiveness of our investigative process and to preserve the privacy of the individuals and entities involved. As a result, we will be unable to confirm whether an investigation exists or provide you with any updates on the status of your complaint or of any pending SEC investigation. Information on our policy is enclosed. You may wish to check our website, http://www.sec.gov, for information about pending SEC civil actions, administrative cases, and other matters.

    If you have any questions, please contact me.

    Sincerely,

    Bryan Burke
    Investor Assistance Specialist
    Office of Investor Education and Advocacy
    U.S. Securities and Exchange Commission
    (800) 732-0330
    http://www.sec.gov

    ———————————————————————————————-
    INFORMATION ABOUT SEC INVESTIGATIONS

    Each year, thousands of investors ask the Securities and Exchange Commission to investigate the activities of other investors, financial professionals, corporations, brokerage firms, investment companies, stock exchanges, and others. These complaints generally suggest some impropriety or misconduct and sometimes make a plea to the SEC for direct assistance in resolving a grievance.

    The SEC has the authority to investigate whether violations of the federal securities laws have occurred, and we make every effort to evaluate promptly and thoroughly the information provided by investors. But we cannot investigate every investor complaint. While many investor complaints do lead to full investigations and, if appropriate, to enforcement actions, we cannot guarantee that our review will lead to further investigation or that the SEC will take any legal action.

    We also cannot provide you with updates on the status of your complaint or your request for an investigation. The SEC conducts investigations confidentially for two main reasons. First, we can conduct investigations more effectively if they are not announced publicly. For instance, important documents and evidence can be destroyed quickly if people hear of an investigation. Second, we keep our investigations confidential to protect the reputations of companies and individuals if we find no wrongdoing or decide we cannot bring a successful action against them. The SEC will not confirm or deny the existence of an investigation unless, and until, it becomes a matter of public record as the result of a court action or administrative proceeding.

    When there is proof that someone has violated the securities laws, the sanctions may include financial penalties, orders to surrender profits, cease and desist orders, or an injunction by a court to prevent further violations. The SEC may also bar individuals from working for a securities firm, investment adviser, or investment company. We can also ask a federal court to bar individuals from being officers and directors of publicly held companies. In some situations, we may refer a case to the Department of Justice for possible criminal prosecution.

    The SEC publishes news releases about its lawsuits and administrative actions, and the news media often report on them. You can read and download the SEC’s “Enforcement Actions” on our website at http://www.sec.gov/divisions/enforce/enforceactions.shtml. Or you can obtain hard copies by reviewing “How to Request Public Documents” at:
    http://www.sec.gov/answers/publicdocs.htm
    Or
    Submit a written request to:
    U.S. Securities and Exchange Commission
    Office of FOIA/PA Operations
    100 F Street N.E.
    Washington, DC 20549-2736
    Fax: (202) 772-9337
    Tel: (202) 551-8300

Trackbacks/Pingbacks

  1. CorpGov.net » SEC Seeks Comment on Investor Education - April 30, 2011

    […] However, Broadridge, which processes almost all the VIFs, claims that rule doesn’t apply to VIFs. Therefore, items to be voted don’t have to be titled impartially. In fact, they can be purposefully misleading. See Don’t Let Them Get Away With Stealing Elections. […]

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