Labrador Presents Benchmark Proxy Study at NIRI Atlanta

On December 16, 2010, Labrador Regulated Information Transparency, Inc. (Labrador) presented its benchmark study of U.S. issuer proxy statements to members and guests of the National Investor Relations Institute (NIRI) Atlanta Chapter. Based on a representative sample of 40 proxy statements from Fortune 500 and smaller companies, Labrador analyzed the structure, content and accessibility of the documents to identify best practices and make recommendations to the audience of IR and finance professionals.

Labrador noted that, from the cover page of the document, too few proxies are alike in terms of structure and contents, which frustrates analysts in the course of their research and disengages shareholders. The study showed that only 33% of all proxy statements had a cover page that provided the most pertinent information (date, time, location) about the Annual Meeting, while 17% of proxy statements included no table of contents. Furthermore, less than 10% of the sample applied best practices in terms of presenting CEO and NEO compensation.

Following the benchmark study presentation, the Labrador team presented its recommendations for improving the proxy statement to enhance shareholder communication and voter participation. These recommendations included using a two-column format and presentation aids to make the document easier to read and navigate, while reducing page count by up to 20%. Furthermore, and based on the benchmark, Labrador discussed best practices for presenting say-on-pay and executive compensation, today’s lightning rod issues for activists and institutional shareholders.

During their remarks, Labrador representatives reminded the audience that the proxy statement is a rare and valuable opportunity to communicate with the corporation’s owners and analysts. Given Notice and Access and Dodd-Frank Act requirements, issuers are increasingly compelled to communicate clearly with shareholders and accurately gauge their sentiment to assure positive voting results.