E-Proxy Reform, Activism, and the Decline in Retail Shareholder Voting

The recent e-proxy reform by the SEC aims to provide all shareholders with the ability to choose the means to access proxy materials, expanding the use of the Internet so as to ultimately lower the costs of proxy solicitations, and improve shareholder communications. However, given the complexity of the proxy system, single amendments can have unintended consequences on the system as a whole.This paper explores issues that have arisen since the introduction of the new electronic forms of delivering voting materials: the observed shareholder response-rate decline and the impact on activism.The data discussed in the paper provide evidence of a correlation between shareholder communication system and retail voting response; this finding is useful for a preliminary assessment of the European regime of shareholders' access to meeting-related information, as recently amended by the European Shareholders' Rights Directive