New York – November 7, 2017 – Mediant, a leading provider of investor communications solutions, released its inaugural 2017 Proxy Season Review to offer insights on proxy trends and what participants can expect in 2018. This annual report features analysis from Mediant’s proxy solutions division, made up of trusted experts with extensive industry experience, as well as other industry authorities. “In 2017, issuers went beyond the necessary requirements to offer more engaging investor communications, address big picture concerns such as diversity and climate change, and involve investors every step of the way,” says Sherry Moreland, President and Chief Operating Officer of Mediant.
Mediant uncovered key themes around engaging investors with proxy materials, emerging trends in shareholder proposals, and shifting regulatory requirements.
Investor Engagement: During the 2017 proxy season, Mediant continued to see an upsurge of corporate issuers employing a range of methods to engage investors with more visually appealing elements, from techniques like designing the proxy statement itself to incorporating custom designs and messaging on mailing materials. In a recent client survey conducted by Mediant, issuers unanimously agreed that communicating corporate brand, messaging, and design elements on investor communications materials was a crucial way of capturing investor attention.
Issuers are working with solution providers like Mediant to evolve ways for investors to participate electronically, with options like company-branded interactive sites that offer user-friendly features like videos, maps, and easy navigation through documents. Companies communicate with investors electronically via email, and allow investors to view proxy documents and vote via mobile device. Mediant found that nearly 9 out of 10 issuers agree that these tactics lead to more investor engagement.
Significantly, issuers are also combining new visual design elements and digital communication methods with an increase in transparency, using the proxy to explain the company’s position on topics important to shareholders, such as compensation, board composition, and corporate social responsibility.
Shareholder Proposals and Emerging Trends: Though shareholder proposals declined this year, Mediant found that investors are still using the shareholder proposal process to direct attention to issues and affect company policy by recommending changes. Unlike in years past, many 2017 shareholder-submitted proposals focused not on narrow individual issues but on big-picture questions around long-term corporate strategy, sustainability, and governance.
Environmental and social issue-related proposals rose this year, with increased attention to climate issues; 45% of all environmental proposals were related to climate change. Investors are focusing on companies’ impacts up the global supply chain, and issuers are responding by providing more disclosure on climate risk and policy. Board diversity also received increased attention this year, with shareholder activists seeking greater diversity on boards and increased reporting on diversity metrics. The report also examines proxy access as a means of achieving other investor goals.
Other trends examined in the report include:
- The increase in say on pay frequency votes was due to a requirement of the Dodd-Frank Act that the vote be held in the sixth calendar year after the preceding frequency vote. While predictable, some companies were exempt from the vote in 2011 and will hold their second frequency vote in coming years.
- Virtual annual meetings continue to capture conversation but the numbers remain relatively low and have only risen slowly in the past seventeen years since they were first allowed. The vast majority of virtual-only meetings still include audio and no video. Opposition to virtual-only meetings intensified in 2017.
- Emerging growth companies (EGCs) will feel the spotlight during proxy season 2018, when certain JOBS Act exemptions expire that will require a transition from “scaled” to “full” disclosure and open a door to new challenges and opportunities.
“As we turn our attention to 2018, we can learn from this year’s key findings,” adds Sherry Moreland. “The most successful issuers will continue to evolve their investor communications by turning regulatory requirements into opportunities to build better relationships with investors.”
For more details access the full report linked here.
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