The importance of the E-Proxy has increased astronomically this week with the proposed changes by the SEC to improve the quality of the shareholder vote.
“With over 800 billion shares being voted annually at over 7,000 company meetings, it is imperative that our proxy voting process work – starting with the quality of disclosure and continuing through to the integrity of the vote results,” said SEC Chairman Mary Schapiro. “These three items considered today are all related to the fundamental goal of enhancing the quality of the system through which shareholders exercise their franchise.”

One of the proposed suggestions is that brokers cannot vote the shareholder position without the expressed permission of the shareholder. Therefore company permissions are not the only important difference in this new proposal, but so is the permissions given to the actual broker holding and representing the shareholder. 
These important events include for those who are receiving TARP funding of which executive compensation is to be voted on, for appointing directors, etc, however, this does not apply to smaller companies yet.
The proposals are aimed to improve the reporting of annual stock and option awards to company executives and directors as well as to require quicker reporting of election results. The Commission also proposed amendments to the proxy rules intended to clarify how they operate. In order to truly achieve this goal, I believe the SEC needs to focus on permitting and demanding E-Proxy formats and standards to be implemented for real time and immediate results from shareholders.
The NYSE’s proposal is designed to enhance corporate governance and accountability by helping assure that investors with an economic interest in the company vote on the election of directors. It also would address concerns that broker discretionary voting for directors has impacted election results.
“In 2007, the SEC adopted amendments to its proxy rules that would require reporting companies and other persons soliciting proxies to post their proxy materials on a publicly accessible Internet website and provide shareholders with a written notice of the Internet availability of the proxy materials, except in connection with a business combination. Large accelerated filers (other than registered investment companies) were required to comply with the e-proxy rules starting January 1, 2008. All other reporting companies (including registered investment companies) and other soliciting persons must comply starting January 1, 2009. The e-proxy rules provide two alternatives for the delivery of proxy materials:[1] (1) the notice only option; and (2) the full set delivery option. An issuer or other soliciting person may use the notice only option for some shareholders and the full set delivery option for others.” Under the notice only option, an issuer must send a Notice of Internet Availability of Proxy Materials to all shareholders and must post its proxy materials on a publicly accessible Internet website (other than the SEC’s EDGAR website), in both cases at least 40 calendar days before the meeting date.
 
MY COMMENT:
Approve the change however adjust the current system to make E-Proxy simpler and easier for the average shareholder to make the vote online and give permissions to their broker. In this respect, the SEC will achieve the desired goal of shareholder accountability for their own vote. I suggest that changing the proxy material requirements from mailing a notice at least 40 days before the meeting date be adjusted to and or “emailing the notice, posting the notice on the website, company blog, and publicly available internet pages 40 days before” as an effort to speed up the process, save on funds spent by companies in their proxy process, and use less paper and time. In addition, brokers should be able to receive permissions in the same manner, and be able to accept an online permission form. In addition, shareholders should be able to elect themselves that they either have to give permissions to their broker or the broker can vote on their behalf. I believe the investor should have the right to make up this choice versus losing the vote entirely due to their absent permission. In some cases, I think the vote will be skewed further from the SECs intention by penalizing the vote from not occurring at the discretion of the Broker, since the Broker often knows what the client wants to vote due to the “know your client” requirements. The loss of the vote in this case due to the absence of a permission could be a detriment to the shareholder and company in my opinion.
http://www.sec.gov/news/press/2009/2009-147.htm
By Ryan Anthony Gibson