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Tracking Voting Behaviour 961X460

Tracking voting behaviour

Tuesday, 22 April 2014

Quality Investor Analytics could be the key to finding out how your shareholders are going to vote

Recent changes to remuneration reporting, whereby the proposed Directors pay policy has to be approved by shareholders, means that it’s more important than ever to have an accurate perception of shareholder support, in order to avoid being blindsided. A service that a number of Equiniti’s clients take advantage of, giving clients insight into how their shareholders are going to vote ahead of the AGM.

“The proxy solicitation and vote matching service can make a huge difference to our clients,” says Rob Hemming, Head of Relationship and Business Development, Equiniti Investor Analytics. “It can provide the client with key information, from identifying current shareholders, identifying who follows which proxy advisor and finding out how shareholders intend to vote ahead of the AGM, which is essential, especially if it looks like there is the risk of a substantial 'no’ vote. This significantly increases a client’s visibility of shareholders’ voting intentions,” Rob explains.

Equiniti partners with Orient Capital to deliver the service. “There are several aspects to the service: from vote matching to a full proxy solicitation campaign.

Vote matching is very much a real-time analysis, marrying the information established through shareholder analysis against the votes cast at Equiniti. For example, if a company’s vote is split 80% For to 20% Against, it can reveal which underlying institutional investors voted in each direction, which can be really useful, especially where you have large blocks of votes Against.

In comparison “Proxy solicitation entails contacting shareholders ahead of the AGM to ascertain how they are going to vote,” explains Rob. “This process starts up to three weeks before the meeting, contacting shareholders to glean voting intentions. We can then inform the client of anticipated voting behaviour if, it does appear that there are going to be votes against particular resolutions. This enables the client time to enter into a dialogue with those shareholders in advance.” Rob says.

“It is now more important than ever that clients’ are aware of this service,” says Alison Owers, UK CEO of Orient Capital. “Combining a regular, transparent and rigorous review of shareholders in addition to their voting behaviour over time is an incredibly beneficial way to consider the engagement on matters of governance and critical for companies to understand the feedback from investors early on. Done well, this can become an important part of the ongoing strategy for the rest of the year.” Alison says.

"It provides organisations with a really rigorous share analytics solution; a regular and transparent review of shareholders and their behaviour over time is incredibly benficial. And it is critical for companies to understand the feedback from investors early on, Alison says.

“We have recently had instances where our clients have asked for the service very close to the AGM, as they have realised the value in it,” Rob says. “The growth that we have seen over the last few years is testament to the strength of the service. It also shows that many of our clients now see it as a really vital part of their AGM planning and providing transparency to the board on potential AGM outcomes is invaluable.

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Ezine issue: April 2014