Virtual Shareholder Meetings: The New Normal
While we have seen a dramatic rise of virtual shareholder meetings over the past few years, there has also been an increase of in-person attendance at investor conferences putting the competing ‘virtual vs. human’ views at odds. We take a closer look, below.
Virtual shareholder meetings (VSM) are steadily gaining popularity among publicly traded companies. In fact, there was a 30% increase in VSMs in 2017 compared to 2016. This trend first emerged as companies increasingly began to notice that very few shareholders were attending annual meetings.
In addition to being more convenient, here are a few additional benefits of the VSM model:
- Cost Effective ─ as shareholders are often located all over the world, virtual meetings can significantly save money on travel costs.
- Participation ─ studies show that the virtual format can encourage shareholders to ask more difficult questions of board members than they would in a face-to-face format.
- Playback ─ a virtual meeting is typically recorded and archived so it can be viewed later by anyone who couldn’t participate during the live session.
- Efficiency ─ if an investor wants to attend two different company shareholder meetings in one day, that is now possible with VSM format.
While it’s clear that the digital way is becoming mainstream when it comes to shareholder meetings, that is not the case for all IR functions. On the opposite side of the spectrum, we’ve seen a large increase in in-person attendance at investor conferences. In today’s digital era, business is increasingly conducted online, as is the case with VSM, as technology has revolutionized global communications and workflow. However, new regulations that unbundle trade execution and research (such as MiFID II) have skyrocketed the price for research reports which has ultimately contributed to the uptick towards in-person analyst conferences. This reflects a dichotomy - while shareholder meetings are increasingly going digital, in-person investor conferences are becoming more widespread.
When it comes to VSMs and their growing popularity, Broadridge Financial released data indicating that they expect approximately 300 companies will host annual meetings on their platform in 2018 – a 30% increase compared to 2017. Another company advocating for the virtual meeting model is US automaker Ford Motors with the CEO recently commenting on how VSMs enable greater accessibility to shareholders, improves efficiency and reduces overall costs. The list of global companies supporting this model goes on and on, and it appears that what has started as a trickle has grown into a steady stream as VSMs only continue to grow in popularity.
At Wall Street Horizon, we are pleased to be on the forefront supporting virtual shareholder meetings with the launch of a new VSM functionality. Clients now have the ability to access information to all VSM meetings through our web-based Enchilada application. As the digital way becomes more of a staple in corporate culture, investors can tap into our extensive datasets to obtain greater insight into companies that are hosting virtual meetings.