Frequently Asked Questions
Proxy Access: Is my company vulnerable?
We believe that SEC Chairman Mary L. Schapiro characterized the ruling best when she said that this is a "marked change to the status quo". The impact for each issuer depends on their unique shareholder profile. The determination of whether a dissident 3% block exists or can be formed will often go beyond public filings. Indeed, many pension funds and labor groups are non-filers often holding their shares behind big institutional money managers yet retaining voting authority. Morrow’s analysis and consultation can provide guidance and a plan of action, so you are prepared well in advance for a potentially hostile campaign.
What is the impact of the Dodd-Frank Act on our 2011 annual meeting?
Although there are common threads, the impact of the Dodd-Frank Act for each issuer depends on their unique corporate governance structure and their particular shareholder profile. As part of our service, we will analyze your entire shareholder profile, determine the likely recommendations of the proxy advisory services on the particular voting issues relating to the Dodd-Frank Act, and develop a customized solicitation campaign.
What should we do now to prepare for our 2011 annual meeting in light of the Dodd-Frank Act?
In short, asking the question and recognizing the need to prepare now is the critical first step. The list of actions to take can be long, and we can help you navigate and prioritize. For example, do you have an independent whistle-blower process in place? One of the provisions of the Dodd-Frank Act is a bounty system for whistle-blowers that equals a percentage of any substantiated fraud that is reported. Issuers need to do all they can to enable anonymous reports at an early stage. We can help with our Audit Committee On Call service.
Is our Board at risk of a substantial vote against one or more Directors?
The answer requires a thorough review of prior elections, key corporate governance issues, and knowledge of a company’s shareholder profile. Not only do we answer this question for clients, but we provide a customized plan to prevent putting directors
at risk.
What is behind the trading of our stock?
The answer requires intelligence gathering to properly identify shareholders and significant position changes. Morrow has been providing strategic shareholder surveillance since 1980, longer than any other firm. We can provide the most accurate profile of shareholders in the industry, and as part of our active surveillance program, we provide insight into trading anomalies and share movements based on fundamental, bottom-up analysis.
How can our Board accurately forecast the expected vote on Directors and other proposals well in advance of our shareholder meeting?
The critical first step that enables vote forecasts is an in-depth shareholder identification program done by Morrow's dedicated shareholder surveillance group. Once that process is complete, the results are analyzed by our Corporate Governance Consulting team for a thorough review of the institutional shareholders and how they have typically voted in previous similar circumstances.
What is the real influence that ISS, Glass Lewis and Proxy Governance have on our institutional shareholders?
The influence of the proxy advisory groups will depend on the issue and your particular shareholders. As part of our service we will analyze your entire shareholder profile, determine the likely recommendations of the proxy advisory services on the particular voting issues, provide suggestions to make changes to the proposal if necessary, and track the voting of institutions. Ultimately, we make a comprehensive evaluation of the shareholder base, which allows us to focus on helping management pass the proposals, not just gain the recommendation of a particular advisory firm or the vote of a specific institution.
Who makes the voting decision for our major institutional shareholders?
There is no standard answer – each institution is different. But, after years of interaction – we have the relationship and knowledge to answer this question for nearly all major institutional shareholders.
