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The User-Friendly Proxy Statement

By Robert B. Lamm
August 01, 2016

Attention, public companies: While your proxy statement is likely your most read disclosure document, its readership is spotty. Your retail owners and employees likely focus on some of the compensation information, but little else. And many institutional owners ' the ones who can determine the outcomes of your voting matters ' readily admit that they spend little or no time reading it, in many cases relying on the voting recommendations of proxy advisory firms.

There is, however, a better way. Every year, more and more companies are making their proxy statements more effective as communications and advocacy documents. They are attracting positive attention from institutional and retail investors alike for making their disclosures clear, crisp and readable. And they are resulting in more support for the board's positions and in fewer broker non-votes, which can often make the difference between victory and defeat on shareholder proposals and other “non-routine” matters.

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