At the beginning of June, I submitted a standard 3/3/25 proxy access proposal to Broadridge Financial Solutions, Inc. (NYSE:BR). Like Whole Foods Market (WFM) and H&R Block (HRB), Broadridge also preempted the shareholder’s meeting by adopting a lighter version of proxy access. As I did at the other two firms, I declared victory at Broadridge and withdrew my proposal.
To its credit, Broadridge adopted the major features of allowing shareholders or groups holding 3% of the company’s stock for 3 years to submit nominees to appear on the Broadridge proxy for up to 25% of the board positions. Unfortunately, like the other two companies where I recently won proxy access, Broadridge also limited groups to 20 members.
Since Broadridge Financial Solutions, Inc. provides investor communications and technology-driven solutions to banks, broker-dealers, mutual funds and corporate issuers, it is especially nice to get a win at this company. It is generally a leader, not a laggard, in corporate governance. Because it sells investor communication solutions, securities processing and business process outsourcing services to other companies, I’m hoping they will influence other companies into adopting proxy access. However, I am also concerned that limiting nominating groups to twenty investors may be one limitation too many and is now coming close to a new corporate governance standard.
Searching through top owners for real activists at Broadridge, I see Citadel Advisors LLC with 0.29% of shares, CalPERS with 0.28%, New York Common with 0.20%, CalSTRS with 0.18% and D. E. Shaw & Co. LP with 0.15%. From there, they drop substantially. Any activist fund initiating proxy access at Broadridge would need to get more moderate funds, such as Norges Bank with 0.91%, to sign on at the start. Another limiting factor is that most funds are continuously buying and selling securities to match indexes. It may look like CalPERS is a ‘permanent owner’ of 29% but that number is probably smaller by a considerable margin.
Still, the adoption by Broadridge means I can concentrate my efforts to ubiquitize proxy access elsewhere for now. Like I mentioned after the wins at Whole Foods and H&R Block, I may circle back at some future date, either filing a precatory or binding bylaw resolutions to try to eliminate the limitation on group participants and to address other possible issues to be discovered upon closer examination of adopted bylaws.
Proxy Access Road Building (photo by Erik Johansson)
As always, I would appreciate the wise counsel of readers. Without you, the road would be cut from under our feet and our impact would certainly be minimal.
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