Investor Relations - A Practical Guide - Investis

Proxy Solicitation – knowing who has the voting rights
Who owns your shares is very important for
ongoing investor communications. Equally
important is knowing where the voting rights
reside, as this information is key to soliciting votes
for company meetings and resolutions. Many
beneficial owners, such as local authority pension
funds, may outsource the investment management
of their assets but maintain the voting discretion inhouse.
Understanding which different accounts are
managed and where they appear on the register, is
critical in determining if your shareholders are
supporting management or not.
Proxy solicitors, a division often found in registrar
firms, can help companies track votes and link
them to register analysis to provide an overview of
who is voting, who is not, and which investors
oppose or support certain company matters, for
example, the remuneration report or the share plan
that may be coming up for renewal at the next
shareholder meeting. More importantly, proxy
solicitors can also establish whether you have a
known activist or event driven hedge fund in your
list of shareholders. Tying the register analysis to
the governance and shareholder meeting highlights
potential risks the company may be exposed to, by
way of activist shareholders or potential failure to
pass all resolutions at the AGM.
Many institutional investors are supported by
various proxy advisers when it comes to voting.
Such proxy advisers provide recommendation on
how their investor clients should vote on each
company resolution. Proxy advisers utilise local
market guidelines and best practices and in some
cases, create their own policies which determine
how many of the world’s largest financial
institutions vote at your shareholder meeting.
They are multipliers in terms of influencing how the
shareholders vote on critical issues such as
director elections, increasing capital and the
remuneration report setting the pay schemes for
senior management.
A proxy solicitor will help assess which investors
wholly rely on the recommendation of their proxy
advisers versus those that utilise the proxy
advisers’ research but make up their own mind.
A proxy solicitor can also help to reverse an
‘against’ recommendation or canvass shareholders
to support management if the proxy advisers do
not reverse their opposition.
Conclusion
By the nature of the tasks involved, it will typically
be the company secretarial and investor relations
teams who create and develop the long term
relationship with the company’s registrar. As the
above points demonstrate, aside from supporting
companies with their core shareholder
communications and payment needs, registrars are
instrumental in assisting companies with their
corporate actions, such as the IPO, shareholder
meetings, acquisitions and takeovers.
The Investor Relations Team 31