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Jul 28, 2017

Hertz official sees easy path with virtual AGMs

Issuers said to face declining attendance at in-person shareholder meetings

Virtual shareholder meetings (VSMs) have faced criticism from some investors but they are growing in popularity and, according to a senior Hertz governance official, they can be straightforward to use and generate more shareholder involvement.

Cathy Conlon, head of corporate issuer product and strategy for Broadridge’s investor communications solutions division, told attendees at the Shareholder Services Association’s (SSA) annual conference in Bonita Springs, Florida last week that US issuers will conduct an estimated 255 VSMs this year. That figure will be an increase from 187 last year and 134 in 2015, according to Broadridge.

Companies have largely been uninterested in using a hybrid approach, where they hold an in-person AGM and a VSM simultaneously, Conlon said. More than 80 percent of companies that held a virtual meeting in 2016 did so purely online, and 90 percent of VSMs were audio-only events, Broadridge states.

The growth in the number of VSMs has not gone unchallenged. New York City comptroller Scott Stringer in April said he would be urging more than 15 companies to host in-person AGMs rather than virtual-only versions of the traditional gatherings (, 4/5). His office’s argument is that VSMs ‘deprive shareowners of the fundamental right that, regardless of the number of shares they own, they can engage directly with management and directors – face to face – at least one time per year.’

Companies and industry professionals disagree: Issuers say they are seeing declining attendances at in-person AGMs for the same amount of work, Conlon said, adding that VSMs allow all shareholders to attend, regardless of where they live.

For his part, Hertz assistant general counsel and assistant corporate secretary William Langston told attendees his company had in the past attracted just two or three shareholders to its in-person AGMs, but that 12 had shown up online at its VSM on May 31 this year.

He said the company had received no pushback from shareholders, who were allowed to submit questions via email ahead of the meeting and none of whom raised the format of the meeting as a concern. The only difficulty had been in overcoming internal reluctance, and that in practice it was very similar to running an earnings call, with no technical challenges, he said. Board members were able to tune in from all around the country to the meeting being hosted in a room in New York.

Conlon said that, in general, VSMs have not been the cause of investor concern other than among a ‘small, vocal minority,’ adding that the companies Stringer targeted went ahead with their virtual meetings.

Ben Maiden

Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...