Recently our office has received a number of inquiries regarding phone calls that have been received requesting that the person cast their proxy vote as a shareholder in various investment companies. It seems that these calls have increased recently and there has been both annoyance and concern.

As most know, shareholders in a company have the right to vote on certain corporate matters such as mergers or election of directors. Most shareholders cannot or do not want to attend the annual and special meetings at which the voting occurs. Companies therefore provide shareholders with the option to cast a proxy vote – a vote in which one person gives another person or entity permission to cast a vote for them.

In the past, companies sent out packets with all of the information needed to cast your votes. Average voting return was 35%.[1] However, in 2007, the Securities and Exchange Commission came out with a new policy titled “Internet Availability of Proxy Materials” in response to the federal Paperwork Reduction Act of 1995. It went into effect on March 30, 2007. This Act provided an “alternative method for issuers and other persons to furnish proxy materials to shareholders by posting them on an Internet Web site and providing shareholders with notice of the availability of the proxy materials.”

Unfortunately, an unintended consequence has been that not enough shareholders are voting. According to a 2013 study by PwC and Broadridge Financial Solutions, retail shareholders owned about a third of the shares of publicly listed US companies yet 70 percent of those shares were not voted at annual shareholder meetings.[2] In 2015, voting rates of retail shareholders continued to decline. This season, individuals voted only 28% of the shares they owned.[3]  Fifty seven billion retail shares had not been voted upon as of May 15, 2015. This is just over 22% of all street shares.[4]

Hence, the phone calls. Companies require a minimum number of votes, also known as a quorum. When it appears doubtful that one will be reached, they reach out to proxy solicitation firms who then reach out to you, the retail investor.

What can be done about these calls?

There are 2 categories of retail investors: NOBOs, or “non-objecting beneficial owners,” are investors who do not object to disclosure of information about their name, address and share position to the companies they have invested in.

 Investors who do not want their names disclosed are called Objecting Beneficial Owners - OBOs.[5]   It is your right to request that your designation be changed to that of an OBO. This will help reduce the calls though it may not completely stop them. You must request the change in status via your broker or mutual fund manager. You will still get proxies, but fewer calls.

For our Fidelity Investment clients:

To become an Objecting Beneficial Owner and not have your information available to public companies, you will need to submit one of the following documents:

1. An Objecting Beneficial Owner Request form available from Fidelity Investments

2. A Letter Of Intent (LOI) signed and dated by all account owners, trustees, or authorized individuals. The LOI must contain this language: "I (We) am (are) an objecting beneficial owner(s) and no longer wish for my stock-holding information to be disclosed to public companies."

To change from objecting beneficial owner to non-objecting beneficial owner and to have your information made available to public companies, customers must submit an LOI signed and dated by all account owners, trustees, or authorized individuals.

Fidelity will not accept requests from either the advisor nor a third-party administrator on behalf of the client.

Shapiro Financial Security’s Policy

Our policy is that SFSG does not vote proxies on behalf of our clients as doing so would be a regulatory and logistical quagmire. These decisions are up to the individual owner. However, we do encourage our clients to call us with any questions regarding specific proxy votes that may be requested by their investment firms.


[1] Annoying Phone Calls? Blame the SEC; Ashley Ebeling,; May 6, 2008.

[3] Third Edition 2015; 215 Proxy Season Wrap-Up; ProxyPulse- A Broadridge + PwC Initiative

[4] Second Edition 2015; 215 Proxy Mid-Season Review;ProxyPulse- A Broadridge + PwC Initiative