Proxy Voting and the Worst Job I Ever Had

Before a company’s annual meeting, shareholders receive a package in the mail or via email. It contains an invitation and some documents known as proxy voting materials. The proxy voting package outlines upcoming proceedings that will take place at the annual meeting.

Usually, this includes voting on the Board of Directors, confirmation of the public accounting firm, executive compensation packages, and any shareholder proposals that require a vote. If a shareholder will not attend the annual meeting, proxy voting ensures their vote is still counted.

Many shareholders receive the package and throw it away because the literature is rather boring. Even if you own a large number of shares as an individual, you are comparatively a small shareholder next to the big money managers.

Each share owned counts as one vote. If you own 100 shares and Fidelity owns 10 million, the impact of your vote may not seem worth your time to go through the mundane proxy materials, especially if you own shares in numerous companies.

But proxy materials should not be ignored.

Before I explain how I go about voting my shares, here’s a story of the worst job I ever had — working in a call center calling shareholders to vote their shares. 

The Worst Job I Ever Had

In 2003, I returned from a multi-continental travel adventure to find myself unemployed in a dismal job market.

My best option to get back to work was to contact a temporary staffing firm to be placed into financial and computer based jobs requiring intermediate Microsoft Office skills. Each gig lasted a few weeks and paid $12-$14 an hour.

Humble tasks like printing mailing labels and inputting data were no match for my skill set, but they hurt my ego a little bit. Bruised ego aside, I was still nostalgic for the aimless wandering I did for the prior 14 months. $12 was enough to live on for a day in south-east Asia. Now it was the reward for one hour of sitting at a desk and flirting with a semi-elaborate Access database.

During a minor lull in demand for a somewhat experienced computer specialist, my staffing firm needed someone with phone support experience and a background in finance.

I jumped at the chance to switch it up a little, trading my spreadsheet know-how for a telephone. At my former full-time job, nearly 18 months in the past, at this point, I did spend some time in a help desk support room.

So I probably was an ideal candidate for this temporary position. But I soon learned they were staffing this job with anyone willing to take it.

I arrived at my new position to learn that I would be calling shareholders of companies and asking them to vote their shares. The job was in a typical downtown office space, in a room full of computers that were hooked up to a telephony system.

A database of shareholder names and phone numbers was fed into an automated calling system. With a headset on, the caller would hear a beep, followed by the computer screen displaying a name, address, and the number of shares held. I was instructed to greet the person by saying, “Hello Mr. So-and-So… My name is RBD calling from XYZ corp.”

I worked on two campaigns, one for Adobe (ADBE) and the other for PPL Corporation (PPL).  Both campaigns were to call shareholders and tell them to vote their shares on an important proposal that required a special vote. We were only calling shareholders holding 1000 shares or more. The company I was temping for specialized in this service, something I had never heard of.

The script continued, “We have been retained by PPL Corporation to encourage you to vote your shares on the upcoming proxy vote. Will you be sending in your voting material?” Asking the question helped solidify the shareholders’ commitment to send in their vote it. If they answered the phone at all, shareholders would respond to the call in one of three ways:

1. They proudly stated that they ALWAYS vote their shares on time and are happy to receive the reminder.
2. They said they think they remember receiving the proxy in the mail two weeks ago, and will do their best to get the form in on time.
3. Anger.

Response Type Three

I was trained for about 15 minutes on how to do this job. The more accurate prerequisites to perform this job were to be able to read and speak, and customer service experience was an afterthought. The basic instructions were to try to learn to pronounce the name correctly while the phone was ringing, then read the script and avoid questions. If someone became difficult, it was important to avoid saying the word just, as in “I’m just calling to encourage you to vote your shares.”

The word Just, I learned, suggests it is not important.

A big problem, however, was the computers were very slow and a delay always followed the beep, and shareholders could quickly sense this was an automated call and hang up, or at a minimum become suspicious.

The third type of call receiver would immediately become agitated and ask who I was and why I was calling. Responding calmly but firmly that our company was retained by PPL/Adobe regarding the upcoming proxy vote was usually enough to soothe the concern of the shareholder that they were cold-called.

This job already sucked because the managers were always listening in a critiquing each call, and monitoring the callers to make sure we hit our hourly quota. Frequently, shareholders became angry, and the whole premise of calling someone at their home mid-day was intrusive. So I was already leaning toward quitting this gig before I hit my boiling point.

Then I encountered an old skeptical shareholder who, equating the automated phone system delay to a cold-call and an invasion of his privacy, quickly turned irate before I could finish the usual script.  WHO ARE YOU?  Due to the abrasiveness of his tone, I panicked and responded with a fatal unscripted line. “I’m just calling to encourage shareholders of PPL…” and I was interrupted. HOW DID YOU GET MY NUMBER YOU SON OF A BITCH, WHO THE HELL ARE YOU!

Fortunately, the lead manager was eavesdropping and came over to scold me for using the word ‘just’. He was right. The word is meaningless in the context of what is supposed to be a professional call to a potentially very important shareholder.

The manager, being an older man himself, grabbed the headset. He eased the shareholder by repeating that the company was retained by PPL corporation to remind shareholders to vote their shares. The stern voice and manager title was all it took to calm the shareholder, who said he had already voted his shares.

I Quit

This was a terrible job. The worst job I have ever had, and the only professional job that I’ve ever quit. At the end of the next day I approached the same manager who saved me from the angry PPL shareholder and said I had enough and I wouldn’t be returning.

He told me that some people weren’t cut out for the job, suggesting I wasn’t… which was bullshit because I excelled at it and completed more calls than anyone the floor. I was cut out for it, but I hated it. One mistake in a two week period is a lesson learned, not a failure. But with that I left.

A few months later, I found a job that lasted the next 14 years. 

How I Go About Proxy Voting

Completely ignore the proxy voting materials and you are not living up to your duties as a shareholder. The company and your investment may suffer as a result. Read the proxy materials word-for-word and you’ve wasted a good portion of your day.

Here’s what I do to keep it short while fulfilling my duty as a shareholder. When I get my proxy statement in the mail (and I prefer the mail over email), I open the package and look to see how many voting items are pending and note the due date. Then I usually stick it in a pile of things next to my computer and come back to it later.

After significant procrastination, I finally take a look at the proxy materials and go to the online site to vote my shares. Mailing in the vote is an option, but I’d rather get it done then and there. The materials will point you to online services such as proxyvote.com. You put in your ID number and the voting interface is self-explanatory.

Next, I look at the members of the Board of Directors who are up for vote. I type their name exactly as it appears in the materials into Google. Most Board members at large companies have some kind of bio on the internet, and usually they have an entry on Wikipedia. This is the easiest place to get general information about the candidate.

I look for three simple things in each candidate:

1. The person is an upstanding citizen.
2. Has a decent background in business.
3. The candidate is not overly political.

Upstanding Citizen

I scroll through a page or two to make sure nothing about this person comes up that is negative, such as a criminal inquiry, scandal, or controversy. If not, they are one third of the way to getting my vote.

Decent Background in Business

The candidate’s online bio usually mentions university attended, companies or organizations worked for and positions held, and other companies where they serve on the Board of Directors. I am not overly picky with this, I merely look to see that the candidate has good experience and is not there because of their family tree.

Not Overly Political

Through Google searches and bios, political contributions frequently come to the surface. A small donation here or there is fine, I don’t fault someone for contributing to political campaigns, even though it’s a terrible investment. But when a Board candidate is a major fund provider for a large political movement, or heavily involved in a political party, I raise a red flag.

I’m not overly political and I consider myself an independent. Politics should not influence a Board member’s corporate decision making. I believe that some people who are enthusiastically involved in politics would put their party ahead of decisions for the company, and even use their Board position to strengthen their political ties.

So if I google a candidate and their political activity is widespread and prominent, I’ll vote no, regardless of what party they waste their money on.

After I vote yes or no on the Board of Director candidates, I look at each additional proposal and lean toward voting the way the Board wants me to vote. I always vote for the accounting firm that is proposed, and I see the compensation packages as necessary, as long as they aren’t too generous. Shareholder proposals can be well intended, but often the issues are already addressed in existing company policies.  

Sometimes a shareholder proposal will ask the company to produce a report about the company’s environmental impact or human rights stances, and the Board will respond by saying they are doing enough in that area and the new proposal would not be a good use of company funds.

About 90-95% of the time I follow the recommendations of the Board on these, but often because I don’t have the time to read everything. If I’m not sure, I abstain. If I approve of the Board and the way the company is managed, I have to put some faith in them to know what’s best for the company. A shareholder proposal needs to be a very compelling cause for me to even read it, then even more compelling for me to vote for it.

All of this takes me about five minutes. That’s not a lot of my time to spend doing this and it is my duty as a shareholder, even though my vote is mostly inconsequential. Perhaps one day my shares will add up to a lot more and my vote will be more important.

Do you vote your shares or ignore proxy voting materials?

Image courtesy of Stuart Miles/FreeDigitalPhotos