The key to a successful annual meeting is planning and preparation – not days or weeks, but months in advance. Companies must be prepared for shareholder activism, potential control contests and expressions of shareholder discontent with management – all of which could significantly impact the annual meeting.
Whether the issue is say on pay, board composition, stock option related or another matter, companies should begin their communications with their proxy materials, particularly their management information circular (“MIC”). In addition to being a regulatory document, the MIC provides an opportunity to communicate the strategic rationale in support of proposed resolutions. While the MIC communicates how the company feels its shareholders should vote, it is critical that companies know who their shareholders are – gaining insight into their concerns and who influences their voting decisions. This is best accomplished through regularly communicating and meeting with significant institutional and retail investors throughout the course of the year.
However, companies need to go beyond just knowing their shareholders, they need to gain insight into how their shareholders intend on voting on various resolutions at the annual meeting. If there is a potentially contentious issue on the ballot, companies may want to consider proxy solicitation. Companies should also be in regular contact with their transfer agent to monitor proxy voting leading up to the meeting date.
Recommended reading: “Annual Meeting Hot Buttons: New Survey Pinpoints Executive Compensation, Other Investor Issues IR Must Address” via IR Alert April 14, 2010
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