Ann Yeager, executive director of the Council of Institutional Investors.6:15 p.m. | Updated
The Council of Institutional Investors has asked the Securities and Exchange Commission to intervene after the main company that provides real-time tabulations on shareholder votes stopped giving this information to the groups that sponsor proposals.
The running tallies on shareholder votes are generally kept under lock and key. Only a handful of parties, notably the companies who are the subject of the proposal and the sponsor of the proposal, get to see them. Most firms facing shareholder proposals use a company named Broadridge to distribute investor information and provide information on how shareholders are voting.
But at the behest of Wall Street’s main industry lobbying group, the Securities Industry and Financial Markets Association, Broadridge said, it stopped giving shareholder sponsors access to real-time updates last Friday. The move drew fire from some investors who say knowing the current tally of votes helps both sides devise their campaigns. For instance, if one side is losing, it might send out an extra mailing or make more calls.
In a statement, a Sifma executive said the group did not ask Broadridge to change its practices, rather it called the company to ask on what authority Broadridge was relying in deciding to share information to shareholder proposal sponsors. “When Sifma spoke with Broadridge, it informed us that it had already independently determined it would suspend its practice,” the executive said. “To assert or infer that either Sifma requested, or Broadridge acted in response to a Sifma request, is simply incorrect.”
Ann Yerger, executive director of the Council of Institutional Investors, which represents corporate, public and union employee benefit plans, said that Broadridge’s decision “raises deeply troubling questions about the fairness and impartiality of the proxy system.”
The decision by Broadridge to shut off real-time vote access to sponsors of shareholder proposals comes in the middle of one of the most closely watched investor votes in years — over whether to separate the roles of chairman and chief executive at JPMorgan Chase. While the vote is nonbinding, if could strip Jamie Dimon, the bank’s chief, of the chairman’s title.
Lyell Dampeer, a Broadridge executive, confirmed in an interview this week that he changed his firm’s policy after a call from Sifma. Broadridge is paid by the brokerage firms so he said he was “contractually obligated” to comply with the request. He did not return a call for comment for this article.
The Council of Institutional Investors said while it realized the S.E.C. had “limited authority” over firms like Broadridge, the agency has expressed interest in making sure the proxy system as a whole is fair and look at whether regulatory reform is necessary.