"Proof of concept: an Intelligize report on virtual annual shareholder meetings" reveals noteworthy data concerning virtual annual meetings held during the 2020 proxy season among the S&P 500 as of May 1.
Among the key takeaways:
- Meeting format: 65% virtual-only (VSM) | 29% physical-only | 5% webcast* | 1% hybrid. Of those using the virtual-only meeting format, 11% had used that format historically. Among this large company group, 73 companies are still slated for in-person meetings (which could change depending on jurisdictional COVID-19-related gathering dictates).
- The report identifies 22 companies that committed to in-person meeting formats next year. Others - even those citing COVID-19 as the trigger for virtual-only - did not commit one way or the other, thus accommodating future flexibility.
- Companies that held or hold VSMs this year or that have held VSMs in the past should be positioned to assess the impact of the change in format on shareholder attendance and participation. For example, the report notes GM's 2020 proxy disclosure (p. 91) on its increased 2019 VSM shareholder attendance and participation relative to its prior years' physical-only meetings.
- In assessing state law and COVID-19-related implications on permissible or required meeting formats (many states having accommodated VSMs temporarily in light of stay-at-home orders), the report depicts graphically the number/percent of VSMs by state of incorporation and headquarters location.
- Interestingly, certain industries universally adopted the VSM format - national commercial banks, petroleum refining, state commercial banks, air transportation (scheduled), hotels & motels, hospital & medical service plans, laboratory analytical instruments, and security & commodity brokers, dealers, exchanges & services. The report notes that companies in industries with 100% adoption rates cited as benefits of the VSM format increased shareholder attendance and participation, ESG factors (e.g., reduced environmental impact), and cost considerations (e.g., reduced costs for company and shareholders).
While the statistics are interesting, the report raises another good point, which is that companies may find themselves in the position again in the near or not-so-near future where they are effectively forced to avoid in-person gatherings. In view of that reality, it is only prudent that the SEC, state and local jurisdictions, and companies prepare accordingly in lieu of acting only if/when another crisis has already manifested.
*The report defines webcast meetings as those where shareholders vote and attend the meeting in person. Shareholders may also watch the meeting remotely via webcast or listen via audio conference; however, remote attendees can't participate on equal terms with in-person attendees (e.g., submit questions or shareholder proposals remotely).
Access additional information & resources on our Virtual Meetings page. This post first appeared in the weekly Society Alert!