Companies seeking to increase their engagement with shareholders are turning to inventive ways of attracting their audience’s attention.
To reverse a long-running trend of decreased voting participation by retail investors, Bank of America is donating $1 to worthy causes for every proxy voted by an individual account. The company’s pledge last year to donate to the Special Olympics helped to add 50,000 new retail voters, an increase of 8%.
This year, BoA’s choice of Habitat for Humanity helped increase retail investor voting participation by 41%, resulting in a donation of more than $900,000! The 269,000 new voters increased both the quorum and the number of pro-management votes that are typically cast by individual shareholders when they vote.
Success breeds success when it comes to campaigns such as this. Repetition, a compelling cause and increasingly large contributions are likely to continue to boost voting participation by BoA’s shareholders and the attention they pay to its proxy statements.
So how are you preparing?
Even if you’re not Bank of America, shareholders are more likely to read your statement – and engage with you – if you’re preparing in a way that considers your audience’s interests and tells a compelling story. A few tips to keep in mind:
- research best-in-class disclosures and see what your competitors are doing.
- anticipate how proxy advisors will react to your disclosure and where they may challenge your pay programs; have a strategy in place to address them.
- visibly highlight programs that investors and advisors will view positively such as through a “what we do/what we don’t do” table.
- review your compensation story, ensuring you’re providing the important details transparently with a focused and concise delivery – while demonstrating key performance metrics, company results (good or bad) and why your program helps ensure the attraction, retention and motivation of your executives.
The bottom line: listen to your shareholders. If you haven’t already begun to engage with shareholders, now’s the time. Shareholder engagement should be something that companies are doing proactively – even when there are no burning issues or controversial topics to discuss. Keep the lines of communication open so that if things don’t go as planned, you can work these relationships to tell your story and gain support during more tenuous times.