My good friend Carl Hagberg is one of the smartest – and certainly the most experienced – people when it comes to the proxy process. He has served as in independent inspector of elections for a long time and is the editor for the “Shareholder Service Optimizer.”
Here is an excerpt from a recent issue of that fine publication: “One of the first things we noticed – as still avid readers of Proxy Statements – and mostly-faithful voters – and eager attendees at virtual shareholder meetings where we own shares and can squeeze in the time – was how difficult it was to find the correct date and time of the VSM – and how hard it was to find the link to the meeting in so many cases.
Worse yet, we encountered several instances where the times and dates were at best incomplete, and in several cases, FLATLY WRONG!
Another major observation this season was the unusually large number of instances we encountered where there were differences – sometimes quite substantial ones – in the number of “Votable Shares” reported in Proxy Statements vs. the numbers shown as “Shares Outstanding on the Record Date” as shown in the once “certified” lists of shareholders produced by transfer agents. And often, we encountered different numbers entirely in the reports from proxy tabulators.
Our Inspector Team has a policy that requires our Inspectors to investigate here and to satisfy ourselves as to the correct number to use in the Final Report on the Voting – which is filed with the SEC. Most often, the differences are due to option exercises that took place shortly before or shortly after the official record date, But, we ask, “Who is in charge of the SEC-required “Control Book” at the Transfer Agent? And who is responsible for monitoring the numbers at the Company – and for making sure that the required entries are actually made on their “Cap Tables”… AND for assuring that differences are properly reconciled?”
