What to watch for as US shareholders vote this year

The annual guessing game – and it's not such a big guess – is on. What topics will dominate the annual meeting season? In the US, a lot of the issues are those raised by the proxy voting agencies, whose clients then ensure that at least a degree of interest will be taken when the proxy statements arrive with their shareholder resolutions and the management resolutions that the agencies don't like. This debate is likely to intensify as shareholders gain greater "access" to the proxy statements, and we see already in this year's issues thinks likely to grow in importance in the future. According to two communications and proxy solicitation firms, the patterns are in evidence:

• Just say no: Campaigns are appearing for shareholders simply to vote against any management proposals or withhold votes from incumbent directors seeking reappointment.
  
• New voters and non-voters: In the past, boards have often been able to count on stockbrokers to help them out. Brokers that hold shares on account of end-investors have long been able to vote the shares as they choose, unless the clients had specifically requested to vote themselves. Broker voting is no longer permitted, so the votes of passive investors, once exercised by management-friendly investment banks, won't count, giving the activists more clout.
  
• Fast reporting: It's not quite "real-time" reporting, but US companies now have to report the outcome of shareholder votes within four days of the annual meeting.
  
• Old chestnuts: Executive pay will provoke a lot of concern, as it has ever since shareholder activism emerges as a force in the 1980s. But there's new impetus, linked to …
  
• New chestnuts: Pay is linked increasingly to risk, and risk management disclosures – including the board's role in risk – need to be made. In this context will come at least a risk-based view of climate change.

And more. You don't have to read the financial newspapers to know that investors have been upset by the secrecy surrounding the medical leave of absence that Steve Jobs has taken from Apple. Succession planning will be on the minds of investors even more than on the proxy statements.

Source document: The briefing note by Robert Berick of Dix & Eaton and Rachel Posner of Georgeson appeared originally in The Corporate Board.