homepage-rotator-1.jpg

Our Blog: The Podium

2020 Annual Shareholder Meetings: New SEC Guidance and Going Virtual

By David Calusdian, President

yay-11408288-digital

The option to hold a solely virtual annual meeting has been with us for several years now, but we certainly will see a dramatic increase in the number of companies using these purely online events this coming proxy season.  Broadridge’s virtualshareholdermeeting.com platform lists 140 virtual or “hybrid” (offering a virtual option to supplement the in-person meeting) events on its platform alone from now through the end of May. And we’ll be sure to see more of these events in the coming weeks as a result of the SEC’s new annual meeting guidance due to COVID-19 travel and gathering restrictions. 

Below we have shared the SEC’s guidance around three major areas relating to annual meetings, including 1) changing the date, time and location of meetings; 2) holding virtual or hybrid annual meetings; and 3) providing flexibility regarding shareholder proposals.  We have also included links to helpful resources, and proxy and news release examples relating to virtual or hybrid annual meetings. Of course, since state law governs the conduct of annual meetings, please refer to those corporate codes as well as any limitations provided by your stock exchange. 

SEC Guidance

1. Changing Date, Time or Location of In-Person Meetings.

If you have already mailed and filed your proxy materials:

Issuers may change the date, time or location of annual meetings without mailing additional soliciting materials or amending proxy materials if they:

  • Issue a press release announcing the change;
  • File the announcement as definitive additional soliciting material on EDGAR; and
  • Take all reasonable steps necessary to inform other intermediaries in the proxy process (such as any proxy service provider) and other relevant market participants (such as the appropriate national securities exchanges) of such change.

If you have NOT already mailed and filed your proxy materials:

The SEC advises that issuers consider whether to include disclosures regarding the possibility that the date, time or location of the annual meeting will change due to COVID-19, and that determination should be made based on the particular facts and circumstances and the reasonable likelihood of such a change.

2. Holding Virtual or Hybrid Shareholder Meetings.

If you have already mailed and filed your proxy materials:

Issuers that have already filed and mailed their definitive proxy materials do not need to mail additional soliciting materials (including new proxy cards) to switch to a “virtual” (completely online) or “hybrid” meeting  if they take the same steps as with the change of the date, time or location of the meeting described above.

If you have NOT already mailed and filed proxy materials:

The SEC expects issuers to notify its shareholders, intermediaries in the proxy process, and other market participants of plans to hold a virtual or hybrid meeting in a timely manner and disclose clear directions as to the logistical details, including how shareholders can remotely access, participate in, and vote at such meeting. These disclosures should be in the definitive proxy statement and other soliciting materials. 

3. Flexibility Regarding Shareholder Proposals

The SEC staff is encouraging issuers, to the extent allowable under state law, to provide shareholders who have proposals on the proxy, to present those proposals by alternative means at annual meetings during the 2020 proxy season. This includes the ability to present those proposals by phone.

The SEC staff also will consider the inability to travel or other hardships related to COVID-19 as “good cause” for shareholders not to be able to present their proposals at annual meetings. Issuers that would normally have had cause under rule Rule 14a-8(h)(3) to exclude those proposals for two calendar years because the supporting shareholders had not presented the proposals in person, will now not have cause to do so.

 

Resources

Virtual Annual Meeting Services

Broadridge Virtual Shareholder Meeting

Alliance Advisors Virtual Meeting Services

IssuerDirect Annual Shareholder Meeting

 

Corporate Examples

Completely virtual annual meetings

Tennant Corporation Proxy

Hewlett Packard Enterprise Annual Meeting Website

 

Change from in-person to virtual meeting

Starbucks: News Release Announcing Change  & Additional Proxy

FMC Corporation:  News Release Announcing Change & Additional Proxy

 

In-person meeting, but Proxy includes potential to change to virtual

Wells Fargo: Additional Proxy

 

Last minute switch from in-person to virtual

Agilent Technologies: Additional Proxy & News Release

 

With annual meetings and all stakeholder communications, companies need to be thoughtful and strategic in how they navigate this unprecedented global health crisis. Your employees, investors, customers and partners will appreciate and remember your company’s transparency, consistency and the humanity by which you approach this situation.  If you need help navigating this complex time, Sharon Merrill is here to help. We have been advising clients on investor relations and crisis communications for decades. Please reach out to set up a strategy call with our senior-level team to address your questions and discuss ways that Sharon Merrill can support your strategy and communications in response to COVID-19.

This blog is intended for informational purposes only and not as legal advice.  Please consult legal counsel before developing a plan for your company’s proxy and annual meeting.

Subscribe to our weekly email: Investor Relations Around the Web

Investor Relations Agency, Investor Meetings, Crisis Communications, IRO, Shareholder Communications, Investor Relations, Investor Relations Firm, Corporate Communications

Subscribe to The Podium!

Connect with your Investors

Establish a sincere connection with investors to communicate key messages during your Investor Day. Download our free e-book on effective presentation habits, and learn to deliver ideas with confidence and clarity.

Delivering Effective Presentations

When it's time for a change

Whether planned or sudden, it is crucial to communicate the succession of high-profile positions effectively. Download our three-part e-book and learn the best way to craft a plan for CEO, CFO and Board of Directors transitions.

Download Your Free eBook: Communicating Management Transitions 

Be Proactive, Not Reactive

With our new Proxy GamePlan, we create a year-round, data-driven strategic roadmap for effective shareholder engagement. Implement a best-in-class program rooted in a deep understanding of your company’s proxy practices, shareholder voting trends and peer landscape.

Learn More About  Proxy GamePlan

Find Effective IR Counsel

Whether you’re seeking external IR counsel for the first time or evaluating your current provider, you need a firm that understands your strategy, adapts to your culture and tells your story. Download our free guide on how to assess the effectiveness of an investor relations firm.

How to Assess  an IR Firm

Activism Defense

No company is immune to shareholder activism. Sharon Merrill helps boards of directors and executive management teams identify the activist red flags lurking in your shareholder base, assess your governance risks and develop an action plan to prevent, detect and neutralize any threats. Download our free white paper, “Leveraging Institutional Shareholder Relationships to Reduce Activism Risk,” and learn how the best defense against activism is a strong offense.

Download Activist Defense White Paper

Captivate your Audience

Speaking persuasively is critical in today’s competitive business environment. Effective speakers use voice techniques and body language that project authority and credibility. Download our free e-book, “A Guide to Delivering Captivating Presentations,” for insight into good -and bad- presentation habits, and learn how to improve your skills.

Become a Persuasive Speaker 

Perceptions Matter

How do you ensure that investors clearly understand your strategy, growth drivers and market position? The most effective way is through a perception study. By periodically taking the investment community’s pulse you can avoid the knowledge gaps and misperceptions that hurt valuation. Download our free whitepaper, Why Perceptions Matter, to learn more.

Download your free copy of  'Why Perceptions Matter' 

Common Topics:

More topics