SpectrumGroup's new report on its recent survey of 5,000 qualified retail investors about the proxy process, proxy advisory firms, and SEC's outstanding rule proposals on proxy voting advice and Rule 14a-8, revealed these and other key takeaways:
- To establish a baseline, at the start of the survey, 69% of respondents said they supported increased SEC oversight and regulation of the proxy advisory industry; 28% said they didn't know. Levels of support for oversight increased as respondents learned more information during the survey such that, upon completion of the survey, 81% of respondents expressed support and 16% were unsure.
- The overwhelming majority of respondents (95%) indicated that it is important for them to have a choice in how their shares are voted (i.e., support specific proposals that meet their personal objectives).
- With regard to the proposed shareholder proposal rule reforms, 71% of respondents support the proposed updated ownership eligibility requirements, and 22% don't know. Just 7% don't support the proposed criteria. Similarly, 68% support the proposed updated resubmission thresholds; 26% don't know; and just 6% don't support.
- With regard to proxy advisors, nearly 80% of respondents are concerned about conflicts of interest arising from their providing both proxy vote recommendations and consulting services, and 78% support the proposed rule requirement that proxy advisory firms include conflict of interest disclosure with their voting advice.
- More than 80% of respondents are concerned about robo-voting, described as investment advisors voting proxies automatically and without evaluation in complete reliance on proxy firm recommendations. They are equally concerned about robo-voting of shares in alignment with predetermined voting policies. 75% of respondents support the SEC addressing the robo-voting issue, and 18% said they don't know.
- Nearly 80% of respondents support the SEC's proposal to allow companies to review and provide feedback on the proxy voting advice before it is issued.
- More than 80% of respondents believe it is important for investment advisors to utilize all available and potentially relevant information - including direct engagement with subject companies - prior to making a voting decision. 15% said they didn't know.
Notably, more than half of respondents voted shares in the past. Of those who have not, 60% are interested in voting in the future and 11% don't know if they're interested. Only 11% have not voted and are not interested in voting in the future.
Respondents had at least $10,000 of assets in any combination of stocks, bonds, mutual funds and exchange-traded funds (ETFs) held in various account types, e.g., defined contribution plans (such as 401ks) (61%), advisory or managed accounts (26%), IRAs (56%), and other similar investment accounts.
See also the data file, Spectrum's release and its April 2019 survey on retail investor views on the proxy voting process and the role of proxy advisors (reported on here), and additional information & resources on our Proxy Advisors, Shareholder Proposals and Individual (Retail) Investors pages. This post first appeared in the weekly Society Alert!