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@example.com and the Chairman at firstname.lastname@example.org. 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:
- My Profile
- Down the left column, hit the button that says “Prioritize and Manage”
- In about the middle of the page, you’ll see “Default Voting Positions” with the choice of voting
- with the board’s recommendation
- 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@example.com 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.