October 12, 2010
I work for a major proxy sollicitation firm, and I have noticed the following:
Many companies purchase directly from mutual funds (without the services of a broker) the shares allocated to retirement and pension funds for their employees. The funds are registered in the companies' names, and proxy materials are sent directly from Broadridge to these companies. Sometimes they go to the administrator of such plans in human resources, or. Other times these materials are sent to the Treassurer or other officer or executive. No matter where they are sent, however, the shares purchased by the corporaton invariably wind up not getting proxy-voted, because insofar as these corporations are concerned there are no proxy-voting mechanics in place to do so, or at least they are unaware of such. Nor do they make any attempt to reach the employees who are the acutual beneficiaries of the shares for the same reason -- they are totally unaware of how do so, or even if they are allowed to do so.
This is, of course, the source of great confusion. More importantly, when such holdings are purchased and registered in the companies' names are large, a number of such unvoted positions in a particular fund can either stall or completely stultify the possibility of shareholder meetings.
I suggest therefore that proxy-voting instructions for corporations who privately broker shares for employee plans be put in place as soon as possible.
Thank you.
Donald Panebianco