Interactive Proxy Statements Transforming Online Shareholder Engagement
Nasdaq reported last year that “interactive proxy statements are revolutionizing the way companies tell their corporate governance stories.” Designed for web browsing versus print browsing, the features of interactive proxies continue to evolve, making it easier for shareholders to locate the information they want and to access shareholder voting platforms.
A number of providers offer a range of interactive proxy design and hosting services, including EzOnlineDocuments, ISS Corporate Solutions, RR Donnelley, and Mediant. Nasdaq spoke with Rich Andrews, CEO of EZOnlineDocuments, a provider of online proxy services since 1998, to find out how interactive proxies have begun to impact online shareholder engagement: “Interactive proxies visually marry corporate branding with a vastly superior user interface that anticipates intuitive reader navigation and offers robust searchability. The user analytics of our clients’ interactive proxy statements show that 80% of online readers don’t bother looking at the linked PDF version of the proxy statement at all—they engage solely with the interactive version.”
Interactive proxies allow online readers greater control over which elements of the proxy they choose to engage with. Companies can leverage that behavior by tracking analytics in real time to anticipate investor concerns and improve shareholder engagement. Online proxy platforms also make it easy and cost-effective to highlight important corporate messaging by embedding videos and graphics within the proxy. According to Andrews, “The sections of our clients’ interactive proxies that are most popular are tiles navigation, proxy summary, election of directors, ‘Meet the Board’, executive compensation, and videos.”
To the online reader, there is a profound difference between the experience of reading a static PDF and navigating an interactive proxy platform. Progressive Nasdaq-listed companies are offering interactive proxies that are much easier to navigate than their PDF version. To compare, see how each of these companies provide stronger branding and a better user experience in their interactive versions: Atlas Air Worldwide (interactive proxy, PDF version), Galena Biopharma (interactive proxy, PDF version), and Inovalon (interactive proxy, PDF version).
According to a recent study conducted by EZOnlineDocuments, 80% of S&P 500 companies have invested in making their websites responsive to mobile devices, yet only 11% of them created interactive proxies during 2016. “Most companies don’t realize that static PDF proxy statements are not engaging online readers. And they may not fully meet SEC compliance standards for readability and searchability of online proxies,” said Andrews. (His company’s website summarizes certain of the SEC's rules for posting proxy materials online.)
So why aren’t more companies utilizing an interactive format for proxy statements?
“The greatest hurdle is that many companies are satisfied with meeting the bare minimum of SEC requirements for online proxies. They fail to take into account that static PDFs are not optimized for online reading, that reading a PDF online is a cumbersome and time-consuming process for investors and shareholders,” shared Andrews. “The second hurdle is cost. Most companies don’t realize that the cost of interactive proxy statements isn’t prohibitive at all and that it’s nothing near the substantial investment most companies have already made to improving the mobile responsiveness of their websites.” Research indicates that the cost of developing a standard interactive proxy statement is reasonable, with prices starting as low as $3,000 up to around $15,000 depending on provider and services selected.
Rich Andrews and his colleagues foresee further evolutions in proxy design and content on the horizon as companies begin to digest and leverage data from online proxy analytics. “Reformatting content so that it’s accessible via ‘click-to-learn’ navigation, like our ‘Meet the Board’ feature, is becoming increasingly popular,” shared Andrews. “Online readers primarily engage in content that is structured that way. We also expect companies to evolve their proxies by redesigning the summary so that it is entirely readable on the phone and tablet. We tell our clients to stop thinking landscape and start thinking Wall Street Journal—information is best presented on mobile platforms in columns and tiles to optimize online reader experience and engagement.”
Taking into consideration the recent growth of mobile web browsing (it has now eclipsed desktop browsing), it seems clear that interactive proxy statements offer significant opportunities to improve shareholder engagement.
The views and opinions expressed herein are the views and opinions of the author at the time of publication and may not be updated. They do not necessarily reflect those of Nasdaq, Inc. The content does not attempt to examine all the facts and circumstances which may be relevant to any particular company, industry or security mentioned herein and nothing contained herein should be construed as legal or .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.