Lack of ‘normal internal review’ blamed for last week’s announcement of halt to long-standing policy
Days after announcing plans to keep proxy voting tallies private from opponents in a proxy contest, investor communications firm Broadridge Financial Solutions has scrapped the change.
The company said an internal omission was responsible for the announcement last Thursday that, effective from the following day, it would stop allowing companies to see the tallies of all participants in a proxy voting contest as they come in, and would allow contestants to see interim tallies of their own votes only.
‘Thursday’s communication of a procedural change was made without the benefit of normal internal review,’ says Chuck Callan, chief regulatory officer at Broadridge, in an email to IR Magazine. ‘The long-standing procedure for reporting interim vote tallies of each side’s card to both sides of a proxy contest remains in effect. There is no change.’
Last week Callan was quoted as saying in an article by CFO magazine: ‘We’re not going to be providing the other side with the interim voting results. We think that’s consistent with changes we began to initiate last year.’
Beyond saying that last week’s communiqué was issued without an internal review, Broadridge hasn’t explained the turnaround. It does say, however, that it had decided not to go ahead with the change in policy. Such a change would have made it harder for companies to track support for activist investors at a time of increasing proxy battles.
In May last year Broadridge landed in controversy when it decided to stop furnishing proxy voting tallies to pension funds and other JPMorgan shareholders that wanted to force a split in Jamie Dimon’s role as both CEO and chairman of the financial services giant. Broadridge’s decision followed direction from the Securities Industry and Financial Markets Association, Wall Street’s main lobby group representing brokers.
After the decision, JPMorgan announced it would voluntarily release the information to opponents of Dimon’s dual role. The vote eventually allowed Dimon to retain his roles, with under a third of shareholders voting for a split.
