The Canadian Society of Corporate Secretaries 1 6 th Annual Corporate Governance Conference Banff Springs Hotel | Banff, AB | August 24 - 27, 2014 Proxy Reconciliation Luisa Roberto August 27, 2014
The Canadian Society of Corporate Secretaries 1 6 th Annual Corporate Governance Conference Banff Springs Hotel | Banff, AB | August 24 - 27, 2014 “I ’m a shareholder. I invested good m oney in this stock, here is m y broker statem ent. W hy can’t I vote m y shares at this m eeting?”
The Canadian Society of Corporate Secretaries 1 6 th Annual Corporate Governance Conference Banff Springs Hotel | Banff, AB | August 24 - 27, 2014 Custody of the Vote Record date shareholder list: Registered shareholders (individuals, corporations, nominees etc.) Depositories (CDS, DTCC).
The Canadian Society of Corporate Secretaries 1 6 th Annual Corporate Governance Conference Banff Springs Hotel | Banff, AB | August 24 - 27, 2014 Custody of the Vote ( cont’d) Every vote and appointment received must reconcile to a position on the registered list. Majority of shares are held through depositories in an intermediated holding system. A beneficial holder must advise their intermediary of their desire to attend the meeting by appointing themselves on the VIF and returning it as instructed.
The Canadian Society of Corporate Secretaries 1 6 th Annual Corporate Governance Conference Banff Springs Hotel | Banff, AB | August 24 - 27, 2014 The Reconciliation ( exam ple) CDS provides a Holders of Registered Record report and shareholder: CDS & Co Omnibus Proxy on Record 10,000,000 shares plus 2 Tabulator reduces CDS’ DTCC (the position and allocates Participant 1 Participant 2 Depository Trust Company) votes as authorized by the 5,000,000 shares 4,000,000 shares 1,000,000 shares Omnibus Proxy Additional Omnibus NOBO’s (Omnibus Numerous from Broadridge) Participants – many Proxies provided to Intermediary 3 Intermediary 4 US brokers 2,000,000 shares re-allocate votes – 2,000,000 shares 2,000,000 shares allocated to Omnibus Proxy sent individual NOBO’s to Issuer tabulator reduces
The Canadian Society of Corporate Secretaries 1 6 th Annual Corporate Governance Conference Banff Springs Hotel | Banff, AB | August 24 - 27, 2014 The Reconciliation CDS provides a Holders of Registered shareholder: Record report and CDS & Co Omnibus Proxy on Record 10,000,000 shares plus 2 0 Tabulator reduces CDS’ DTCC (the Participant 1 position and allocates Participant 2 Depository Trust 5,000,000 shares Company) votes as authorized by the 4,000,000 shares -1,000,000 shares 1,000,000 shares Omnibus Proxy Additional Omnibus NOBO’s (Omnibus Numerous from Broadridge) Participants – many Proxies provided to re- Intermediary 3 Intermediary 4 US brokers 2,000,000 shares allocate votes – tabulator 2,000,000 shares 2,000,000 shares allocated to Omnibus Proxy sent individual NOBO’s to Issuer reduces
The Canadian Society of Corporate Secretaries 1 6 th Annual Corporate Governance Conference Banff Springs Hotel | Banff, AB | August 24 - 27, 2014 The Reconciliation CDS provides a Holders of Registered shareholder: Record report and CDS & Co Omnibus Proxy on Record 10,000,000 shares 0 plus 2 Tabulator reduces CDS’ Participant 1 5,000,000 shares Participant 2 position and allocates DTCC (the Depository Trust -6,000,000 shares = 4,000,000 shares Company) votes as authorized by -1,000,000 shares -1,000,000 shares= 1,000,000 shares + 1,000,000 = 3,000,000 shares the Omnibus Proxy 0 shares Further Omnibus Proxies provided to ‘cover’ over- reporting Additional Omnibus NOBO’s (Omnibus from Numerous Participants – Broadridge) Intermediary 3 Intermediary 4 many US brokers Proxies provided to re- 2,000,000 shares allocated 2,000,000 shares 2,000,000 shares Omnibus Proxy sent to to individual NOBO’s Issuer allocate votes – tabulator reduces
The Canadian Society of Corporate Secretaries 1 6 th Annual Corporate Governance Conference Banff Springs Hotel | Banff, AB | August 24 - 27, 2014 Beneficial Votes are Reported The tabulator will start receiving vote reports and appointments from Broadridge. The tabulator will reduce the Participant or Intermediary positions allocated to them by the number of votes reported by Broadridge. When appointments are received, those shares are reserved for their vote at the meeting. Participant 2 Participant 2 4,000,000 shares Votes received: 3,500,000 (overvoted by 500,000 which cannot -1,000,000 shares= be tabulated until a correction is 3,000,000 shares made) (available)
The Canadian Society of Corporate Secretaries 1 6 th Annual Corporate Governance Conference Banff Springs Hotel | Banff, AB | August 24 - 27, 2014 Beneficial Votes are Reported ( cont’d) Reasons for over vote? NOBO position voted by broker (votes already reserved for NOBO’s) – over vote revoked. Trade settled after record date – supplemental omnibus provided moving vote from seller to purchaser. Securities lending – one share may have two votes if not reconciled.
The Canadian Society of Corporate Secretaries 1 6 th Annual Corporate Governance Conference Banff Springs Hotel | Banff, AB | August 24 - 27, 2014 Disconnects… The tabulator does not have access to the whole record date mailing list. A vote may be reported by an entity similar but not exactly as an Omnibus Proxy has assigned. - XYZ Broker Inc votes but an Omnibus gives the authority to XYZ Broker International. A further Omnibus is required to shift the vote to “INC” or the vote must be revoked and re-voted as “International”. Contact information is not always available.
The Canadian Society of Corporate Secretaries 1 6 th Annual Corporate Governance Conference Banff Springs Hotel | Banff, AB | August 24 - 27, 2014 How can the Beneficial Holder Vote at the Meeting? A NOBO may have to appoint themselves and submit the VIF they received prior to the cutoff. The shareholder may have also elected to not receive materials for meetings, or only to receive materials if the meeting is Special.
The Canadian Society of Corporate Secretaries 1 6 th Annual Corporate Governance Conference Banff Springs Hotel | Banff, AB | August 24 - 27, 2014 How can the Beneficial Holder Vote at the Meeting? ( cont’d) An OBO must provide instruction to their intermediary to appoint them to attend the meeting. The issuer may have elected to not pay for the mailing to the OBO’s, so the holder may not have received a package. The shareholder is still entitled to the vote, but must contact his intermediary to obtain the VIF information.
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