Ready to vote?
When you invest in a company or purchase a mutual fund, it makes you an owner. Ownership gives you a voice in how the company or fund is run. The main way shareholders can make their opinions heard is by voting on shareholder resolutions at meetings convened for that purpose.
Shareholders can participate in the decisions that have a real impact on the long-term performance of an investment. Whether voting on proposals that help shape the strategic direction of a company or its management, or the weighing in on the investment mandate of a mutual fund, shareholders have a voice in how their assets are managed. This is why we tell shareholders to own your vote.
"Voting at shareholder meetings, generally via a proxy vote, is one way you can exercise your rights as an owner."
Public companies and mutual funds hold shareholder meetings where key issues on business strategy or how the organization is governed are discussed. When it comes to certain issues, a proposal must be raised and presented for approval by shareholders. While proxy votes are usually associated with public companies, mutual funds are organized as investment companies and have many of the same obligations and reporting requirements.
Shareholder meeting attendees are asked to vote on issues that impact the future direction of the company or fund. And while the majority of shareholders never attend these meetings, they are still able to have their voice heard by voting by proxy.
When you own a share of a company or a fund, you are an owner of that business. As a shareholder you get a vote in how it is run, in proportion to the amount of shares you own. The topics raised at shareholder meetings are not mundane issues. They are generally topics that have the potential to have a significant impact on the future direction of the company or fund. As a result, these topics can have a direct impact on the value of the shares you own, so it is in your best interest to make sure you have a say in these key decisions.
Proxy voting is not a difficult process. You just need to spend a little time to understand the issues and then take a few steps to submit your votes. The links here can provide you with more information about the process, the impact your votes may have and even how to cast a proxy vote.
Dominic Chu: Welcome back to the show. Retail investors can have their voices heard now more than ever. And our next guest has helped facilitate the votes for 365 million shares on its platform just so far this season. Let's now bring in Tim Gokey, the CEO of Broadridge, a very big fintech company. They do a lot of the things that you don't see that makes the financial markets work. Tim, thank you very much for joining us here on this special. I wonder whether or not you can give us your take on just what it means to see the kinds of activity that we've seen in retail markets with these so called meme stocks and beyond and what it means for financial markets overall.
Tim Gokey: Absolutely. Thank you very much for having me tonight. And yes, Broadridge is a $20 market cap, global fintech. We power the critical infrastructure behind governance, investing in communications. We connect every broker, dealer, asset manager, investor and public company. And we clear and settle ten, $9 trillion of trades every day. So it does give us a unique vantage point. And one of the things that I think would be interesting to your viewers, is there's this sort of activity on the top of the market that we've been talking about and we've been hearing about in the first segment of the show - But that its built on a much broader underlying megatrend around the democratization of investing. And one of the things that we see, one of the ways we actually get paid is by the number of individual positions. If you own one share of IBM or 100 shares as one position and that continues to grow over over a decade high single digits. But last year it grew 26% and the year that ended in June, the 12 months ended, June, it grew 18%. And when you look into which positions grew, there are some of those so called meme stocks, but it's all the positions. And of that 18, the mean stocks only accounted for something like 1%. So there's this very broad based growth in retail investing. And and that that is a it's a long term trend. So it's not just what's happening right now. It's really what's been happening over quite a while.
Dominic Chu: So Tim, you know, I mean, I'm not that old, right? But I am in I'm a middle aged man. I remember early on in my investing career having all of those mailings. Right, the proxy voting procedures. I have to send these things back again, there was a prepaid stamped envelope on there for you to send things back. There was not a lot of retail participation at all at that level. We relied on the mutual fund managers that managed our money to kind of make those votes and everything else. Do you feel as though the times have shifted a bit? Do you think that folks like you, others have their individual voices heard more as shareholders than we have in the decades past?
Tim Gokey: Yeah, I think that is a real opportunity and for your listeners to think like owners versus be a trader, but be an owner too. And it's interesting when you mentioned the paper side of it, because one of the things we worked with our clients to is really increase the digital aspect of it. This past year, 86% of all the activity was digital, 97% of the votes were returned electronically. And one of the things we did for investors was upgrade our proxy vote app right on the phone. You can vote with one click. You can set preferences to be alerted for topics that you might be interested in terms if there's a proposal related to one of the companies you own. So it really is making it easier for retail investors to get engaged.
Dominic Chu: And Tim, before we let you go, one of the things you mentioned, the app and technology being a big driver of having shareholder voices heard, what do you envision that shareholder voice looking like in the next five or ten years? Is it more active or does it kind of get drowned out by the fact that people use ETFs more than they ever have in the past?
Tim Gokey: You know, I think the mix between funds and individual stock picking, I think it's going to be tension back and forth. And what you see is when everything goes to passive and then that creates more ability to have alpha through active management. But if we take a sort of a five year view, I think we really are saying we do because we get all these positions and we really have great insight into who the investors are. We're really beginning to see that shift of the assets from the so called silent generation to younger investors, smaller accounts, and you can really see that and that sort of $30 trillion that we've been talking about probably for ten years - you're really beginning to see it move, which I think is empowering new investors in the market.
Dominic Chu: All right. Tim Gokey, CEO of Broadridge Financial, thank you very much, sir. Have a nice weekend.
Tim Gokey: Thank you.
Dominic Chu: All right. We're going.