Combating Shareholder Voting Apathy with Preferred Shares
FEBRUARY 23, 2023
The use of discretion by brokers to vote shares they hold on behalf of individual investors (i.e., in “street name”) on certain routine ballot items is not a topic that has raised significant concern for many publicly traded companies in the past. However, decisions announced by two of the largest brokers in the United States to eliminate their use of broker discretionary voting have pulled this issue into the forefront for some companies. Faced with the erosion of voter turnout as a result of the elimination of broker discretionary voting, some companies have turned to a new tactic to ensure that the requisite votes are received for critical ballot items.