Proxy Season 2021 Investor Sentiment Study

Proxy Season 2021 Investor Sentiment Study: Action Needed

Proxy Season 2021 Investor Sentiment Study: Background

Proxy Season 2021 Investor Sentiment Study finds the rise and influence of individual investors presents unique opportunities to engage new investors like never before. A new survey from Broadridge Financial Solutions (NYSE: BR) highlights how new and younger retail investors are thinking about investing and this year’s proxy season. See my disclosures, recognizing a possible conflict of interest.

This new survey found investors pay attention to ESG issues. Survey respondents said that social issues (such as diversity) and environmental issues (climate change), are the two topics they are most interested in expressing their opinion on through proxy voting. 67% percent of investors surveyed say companies should take active steps to address environmental concerns. 62% believe companies should address social challenges, such as gender, ethnic, and racial diversity and inclusion. 46% of millennial investors (ages 25-40), the highest percentage of any generation, say they will vote their proxy in 2021.

But will they, once they see how difficult it can be to vote intelligently? Are they likely to read through hundreds of pages of proxies? Are they familiar with common ESG benchmarks? Unfortunately, Broadridge does not disclose the actual Proxy Season 2021 Investor Sentiment Study, only a press release, so we cannot evaluate the methodology.

Broadridge’s Proxy Season 2021 Investor Sentiment Study, conducted in collaboration with Engine Group, surveyed approximately 1,000 individual investors. The Study asked about their proxy voting and investing habits, including their motivations for voting, the issues of interest, and their use of technology. Sentiments appear to be changing, following a year that saw more than 10 million new brokerage accounts open, according to research from JMP Securities.

According to Martin Koopman, President, Bank Broker-Dealer, Investor Communication Solutions at Broadridge:

The recent rise of individual investors has been driven by technology, mobile, and zero-fee commissions. The survey data shows that newer and younger investors want their investments aligned with their values especially when it comes to ESG-related issues. New investors look to their advisors, brokers, and fund managers for technology solutions that make it easier for them to vote their proxies with their values.

The rise of Robinhood and Public have led to more retail participation, often trading partial shares. How much work is someone going to do to vote a partial share? They may want to vote, but voting may need to be as easy as trading if we are to get 46% of millennial investors to vote. We may need action from the SEC. Readers can help. See Take Action below.

Proxy Season 2021 Investor Sentiment Study: Supportive of ESG-Related Issues

Respondents voice their desire for input on proxy voting on the following, in order of most interest:

  • Diversity on the company board (43%),
  • Environmental issues (41%),
  • M&A (40%),
  • Executive/CEO compensation (35%),
  • General corporate governance (33%), and
  • Appointing the Board of Directors (32%).

Proxy Season 2021 Investor Sentiment Study: Assisting New Individual Investors

The Proxy Season 2021 Investor Sentiment Study found respondents with two years or less of investing experience to be the most active traders. 43% traded at least once a week. Their investment decisions largely stem from the information they receive from reading or watching the news (35%), friends (34%), family (31%), and social media (30%).

This new wave of retail investors says they are going to be engaged in the proxy process this year. Thirty-nine percent of investors with two years of investing experience or fewer said they will definitely vote their proxy. Of the newer investors who plan to vote, 38% feel it’s their responsibility, while 42% plan to vote because to have a voice on issues important to them.

With mobile trading taking off, investors are also willing to vote their proxy on this platform. 75% of investors would be more likely to vote their proxy if they knew they could do so through a mobile app. That figure includes 88% of Gen Z investors (ages 18-24), 92% of millennial investors, and 89% of investors with two years of experience or less.

Proxy Season 2021 Investor Sentiment Study: New Role for Advisors, Brokers, and Fund Managers

The Proxy Season 2021 Investor Sentiment Study found investors want their brokers, fund managers, and advisors to educate them on proxy voting. Brokers and financial advisors should see that desire as a natural opportunity to further develop client relationships.

67% of respondents said they would like their advisor to spend time explaining the process of proxy voting and discussing the issues voted on at annual general meetings (AGMs). Here is the most significant news: 79% are interested in pre-filling their voting preferences on certain issues. That process has long been discussed as Advanced Voting Instructions (AVI), Client Directed Voting (CDV), or Standing Voting Instructions (SVI).

Investors also seek more ways to vote through or influence the vote of their fund providers. Among surveyed investors who held mutual funds or ETFs:

  • 65% believe they should have more of a say about how their fund votes at annual shareholder meetings, including 62% of Gen Z investors and 75% of millennials,
  • 72% would be more likely to invest in a fund if able to vote on issues most important to them, including 77% of Gen Z investors and 89% of millennials.

As I reported in Exit vs Voice there has been some movement in this direction.  Index Funds S&P 500 Equal Weight No Load Shares (ticker: INDEX) provides investors a say on how they will vote shareholder proposals at S&P 500 companies. While intentions are good, their tools are not fit for purpose. Fund investors have “a say” by filling out a mock proxy, with all the complex analysis that involves. Imagine investing $1,000 in an S&P 500 fund and then analyzing 500 proxies to provide your input. No, having a say needs to be simple.  Answer a few values questions, select between general sets of voting policies, or align your votes with those of a trusted voter that currently discloses votes before meetings.

Investor Education

With the recent increase in stock record growth and newer and younger investors entering the market, Broadridge has updated Shareholder Education with new visuals and more user-friendly content. Investors will find information on proxy voting, the impact it can have, and the mechanics of voting.

Broadridge touts its efforts in developing technology and solutions that enhance and ease the retail investor experience:

  • Updating,
  • Newly designed vote instruction forms,
  • Enhanced emails to a mobile app for proxy voting,
  • Virtual shareholder meeting technology.

Proxy Season 2021 Investor Sentiment Study: New Role for Broadridge?

The unspoken possibility in the Proxy Season 2021 Investor Sentiment Study is that Broadridge could offer retail shareholders a voting platform similar to ones used by institutional investors. It would probably not vote automatically. Your ballot could come pre-populated. Pick from a menu of proxy voting policies like As You Sow or vote alongside Trillium. Much is yet to be determined. What will the SEC allow?

Jill E. Fisch wrote a thoughtful paper on the topic in 2017 (Standing Voting Instructions: Empowering the Excluded Retail Investor). Read my review. I have written about the idea for decades. See Related Posts below.)  I published recommendations a decade ago on Harvard’s blog, An Open Proposal for Client Directed Voting.


On behalf of Broadridge, Engine Group conducted an online survey of 1,002 investors ages 18 and older from March 11-16, 2021. All respondents had one or more investment or brokerage accounts where they can buy, sell, or hold stocks, bonds, mutual funds, or ETFs. The survey excluded investors who invest solely through a workplace-sponsored retirement account, such as a 401(k).

About Broadridge

Broadridge Financial Solutions provides the critical infrastructure that powers investing, corporate governance, and communications to enable better financial lives. They deliver technology-driven solutions to banks, broker-dealers, asset and wealth managers, and public companies. A certified Great Place to Work®, Broadridge is a part of the S&P 500® Index, employing over 12,000 associates in 17 countries.

CorpGov Readers: Take Action

Those surveyed millennials are not likely to vote unless they can do so via standing voting instructions, similar to how institutions vote. Or at least they should be able to use a pre-filled ballot that can be easily voted or changed. The American Business Council filed a petition for rulemaking with the SEC on this issue on February 26, 2018. They believed if more retail shareholders vote, companies can avoid addressing climate issues.

In the 2017 proxy season, 66% of institutional shares were cast in favor of such initiatives, compared to only 13% of retail shares voted.

The implication is that if more retail shareholders had voted, they would have voted against such initiatives. I take a different view. If retail shareholders can easily vote their values, far more will support ESG proposals than do now. Ease in voting will generate debate and education. I recommend readers send e-mails in support of the Council’s petition to Include “File Number 4-721” in the subject line.

The Commission will post all comments on petitions on the Commission’s Internet website. I suggest something as simple as the following:

Please revise SEC regulations, if needed, to allow retail shareholders to vote using open client-directed voting. I favor the system outlined by James McRitchie in his post on the Harvard Law School Forum on Corporate Governance, An Open Proposal for Client Directed Voting (

One key issue in any open CDV system is to let shareowners control where their electronic ballots are delivered. Just as there is no question shareowners can control where hardcopy ballots are delivered, there should be no question they can direct where their electronic ballots are delivered. This simple requirement would ensure third-party content providers an opportunity to compete and improve the quality of voting advice.

Additional elements for a more effective CDV system include:

  • A wide range of voting opinion sources that will eventually cover all issues;
  • Open access for any new opinion sources to publish their opinions;
  • Open access for shareowners to choose any opinion source for our standing instructions on voting;
  • Sufficient funding for professional voting opinion sources that compete for funding allocated by retail shareowner vote (or by beneficial owners of funds that may choose to “pass-through” their votes).

Under an Open Proposal, feeds will offer the ability for retail shareowners to essentially build a “voting policy,” just as institutional voters are now able to do. That model will increase participation and voting quality. We should not ask shareowners to affirm every single pre-filled ballot. That could be a deal-breaker for people with stock in many different companies who would rather spend time on other activities.

Related Posts

Announcing Proxy Votes Improves Corporate Governance

Retail Shareholder Participation in the Proxy Process: Part 1

Retail Shareholder Proxy Participation: Part 2 – CDV

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2 Responses to Proxy Season 2021 Investor Sentiment Study: Action Needed

  1. Noah M 05/13/2021 at 12:52 pm #

    It is tremendously difficult to find the information to vote proxies intelligently. I subscribe to As You Sow and Proxy Preview, which helps with a lot of the shareholder resolutions, but I struggle to find the facts I need to make decisions about compensation packages, board members, etc. I’d like to, e.g., vote against compensation packages based on how they compare to median packages at “comparable” companies — and vote against board members on the compensation committee if the packages are particularly egregious — but I have no idea where to find all the information I need to make judgments like that. The actual process of placing votes is straightforward enough for me; the burden is all informational.

    • James McRitchie 05/13/2021 at 1:56 pm #

      Thanks for that comment Noah. Yes, voting proxies with some degree of intelligence is difficult for retail investors, since we usually don’t subscribe to proxy advisors or databases that make comparisons of CEO pay to peers easy. If you have read any of my company-specific proxy voting recommendations, you can see I follow not well-defined rules of thumb.

      First, I break companies into small-, mid-, and large-cap. Since most CEOs are overpaid, I generally vote against pay at companies where the CEO is paid above median by capitalization. Yes, I know there are huge variations in the size of companies in each category. Yes, peers in various industry categories earn much more than in another industry category. I can usually find the companies chosen peers in the proxy. However, they are often chosen aspirationally. I subscribe to databases where I can find that information but I usually don’t bother. I already spend too much time on this activity.

      I also look at CEO to median employee pay. How the stock performed over 1, 2, and 5 year time periods. I also look at how funds that typically announce their votes in advance of the AGM voted. That information is also very helpful with regard to which directors to vote for.

      If you check out their votes routinely, you will learn something about their typical voting behavior. CBIS, for example, is quite religious about voting against auditors that have served for 7 years or more, since that may compromise independence. Trillium, for example, sets a very high bar for women and minorities on the board. Other funds, like Norges (which announces 5 days before the meeting) are less vociferous. However, if they’re voting against the board’s recommendation on a board proposal, you can be relatively sure that’s not a fringe idea.

      CEO pay is always reported in the Summary Compensation Table. Members of each committee are usually found easily through the index or a word search. I hope that helps.

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