Voice Your Vote

Become an informed and engaged investor by voting in annual meetings.
August 29, 2020

As a retail investor, you own a part of every company whose shares you own. Whether you own them directly, contribute to an IRA, or have a 401(k), you have the right to make your opinion heard about the companies you own a part of, and the direction they’re headed in. Retail shareholders own 30% of the total shares of a publicly traded company. But a majority of those shares go unrepresented. To increase value for the companies and hold CEOs accountable to what’s best for shareholders like you, voice your vote in the shareholder annual meeting. 

Options for Voicing Your Vote

Every publicly-traded company has one of these annual meetings, where proxy resolutions are brought to shareholders, who vote to approve them or not. If approved, there is enormous pressure on the company to follow them. There are several ways to participate in the annual meeting for the shares you own. If you own them directly, you’ll likely receive a large packet in the mail a few weeks prior to the meeting. This packet contains all the proxy resolutions that are on your ballot. Unfortunately, most of these packets go directly into the trash.

Getting familiar with these documents and what’s on the ballot is the first step towards becoming an informed investor – and an active voice in your financial future. Did you already trash your ballot? Don’t fret – you can find any company’s proxy statement online. You can also cast your vote by phone.

The proxy statement provides an agenda and detailed description of each shareholder proposal. Each shareholder proposal will have the company’s recommendation on voting for or against it. Sometimes, they also provide a detailed description as to why they are giving that recommendation. After reviewing each proposal and its opposition (if applicable), simply follow the instructions on the ballot or call in your vote. 

If you don’t want to vote directly, you can also tell your financial advisor or mutual fund manager how to vote your shares (and why). If they don’t follow your instructions on how to vote, it’s probably time to find someone who will! 

What if your shares in a company are held in a mutual fund? Technically you don’t own shares in the corporation, but you do own shares in the mutual fund that does. Mutual fund managers often don’t vote, but if they do, they typically vote based on the company’s recommendations. To influence how they vote, write to them directly or reach out to the investor relations department. 

The Big Picture

So why does this matter? Because the company’s value might depend on it. Without input from real shareholders, companies will only be listening to impact investors and other politically-minded individuals during their annual shareholder meeting. That could be detrimental to your share value, as well as the company’s long-term success. Over the past decade, these resolutions have driven up costs to costumers and driven down returns for shareholders like you. If you want to be more involved or express concerns, call the company, your asset manager or your 401(k) fund.