Proxy materials take the lead in our post-glossy world

One causality from the evident rise in activism (whitepaper here) has been the evident rise in the importance of the proxy statement.

Once a cheaply-produced second cousin to the glamorous annual report, proxy materials are now a lead document that must work as both a SEC regulatory filing and as an uncluttered shareholder communications piece.


For the Ethisphere® Institute, global leader in defining and advancing the standards of ethical business practices, recent article Today’s Proxy Statement—Where Accounting Meets Marketing, Aarti Mahara, Executive Editor, interviewed three experts on proxy:

  • Irving Gomez, Assistant Corporate Secretary and Managing Counsel, Corporate Legal Group at Intel Corporation
  • Jean Weng, SVP, Deputy General Counsel and Corporate Secretary at Voya Financial
  • Liam Power, President at Vintage, a division of PR Newswire/ SVP Cision

Irving Gomez:

“When we draft a proxy statement, we think about the different readers on the receiving end. Proxy statements have shifted from serving as a compliance document to a way that keeps investors engaged and it should be carefully crafted.

The proxy statement should be treated like a story with a short table of contents, followed by a brief summary of highlights that contain keywords, which easily catches the reader’s eyes. We use graphs that show a history of executive compensation and how it relates to company performance and this is particularly important to our big institutional investors who are our long term holders.”

Jean Weng:

“Institutional investors often go through hundreds of proxy statements to help them determine how they will cast their votes at these companies’ annual shareholders’ meetings during the proxy season, therefore these investors have limited time to review their portfolio companies’ proxy statements. At Voya, our focus has been to draft the proxy statement so that an investor can understand the main components of our governance and compensation practices by just reading the first five pages of the proxy statement.

In our executive summary, we present color pie charts that succinctly provide the components of our CEO and senior management’s compensation as well as the portion of the compensation that is equity-based or performance-based. In addition, our executive summary includes a checklist of ‘what we do and what we don’t do’ on our corporate governance and compensation practices that allows the reader to understand our principles and practices in a quick glance. We listen to our investors during our shareholder engagement process and incorporate their feedback”

Our president, Liam Power, answered some direct questions for Ethisphere:

Q: From a content perspective, what are some trends in proxy statements that you are seeing these days?

“The most significant trend we see, from a production POV, is that the Proxy Statement is replacing the Annual Report in terms of emphasis of design and importance to both the issuer and the investor. Juxtaposed to the evolution of “glossy” annual reports into vanilla 10-K wraps, the Proxy Statement is quickly becoming the “marketing” document, specifically because the issuer needs to set their narrative and the subsequent call-to-action of voting in their favor.”

Q: In your view, why is it tough for some companies to create compelling statements that resonate with their audience/ the end user?

“I don’t think its “tough” for companies to produce successful proxy statements. I do think that many companies have been caught off-guard by the increased weight that proxies now carry, largely due to activists. We counsel companies to think of their Proxy Statement as an integral extension of their Investor Relations thesis. Historically, proxy materials were treated much like the annual shareholder meeting, a tactical one-and-done task.”

Q: What do you think investors are looking for in proxy statements?

“What investors want in a proxy statement is EXACTLY what they want the other 364 days a year. Investor want clarity – both in print and online. They want the information, presented in a logical narrative that will help them make an informed decision.”

The creation process for 2016’s proxy statements will probably be the most complicated and collaborative (corporate secretary, human resources, finance, investor relations and corporate communications) we have experienced, both with content (compensation and ESG) and using technologies like our uber-web-friendly interactive proxy solution.

From a tactile production POV, take a meeting NOW with your filing agent (Vintage) to assure you are maximizing the distribution and display technologies available.

Design your proxy materials with these in mind. Don’t just make a PDF.

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