Proxy solicitation is the process of garnering votes and support for your resolution. The proxy solicitation process of comprised of several steps, including: identifying the shareholders or proxy voters, creating solicitation materials, and contacting fellow shareholders. Proxy voting services and professional proxy solicitation services may also be used to maximize support for your proposal.
 
Identifying shareholders

• Financial databases: Members of the financial services community can access lists of large shareholders through database services such as Bloomberg, CDA Spectrum, ADP or Nelson. Information providers such as CDA Spectrum offer one-time searches for a fee of few hundred dollars. Otherwise, a friendly financial services firm may be willing to do a Bloomberg search for you to identify shareholders.
• Stock in "street name": Sometimes shareholders are difficult to identify because their shares are held in the "street name" of the bank or investment company managing their assets. For example, a foundation endowment may not be listed as "The Jones Family Fund," rather, its shares would be under "Putnam Investment Company," the foundation's asset manager.
• Getting the list from the company: Under SEC rules, you can obtain a list of shareholders from the company if you'll be using the list to solicit votes for a resolution that year. Within five days a company must either provide you with a list (names, address, number of shares held) or mail the solicitation materials out for you, whichever you request. If the company mails the materials for you, they will charge you to cover their expenses (reportedly the average is about $17,000). The company also has to provide you a profile of those shareholders they plan to solicit. In turn, you must return the list when done, provide proof of ownership, and sign an affidavit promising that you'll only use the list for solicitation purposes for the specific resolution and that you won't share the list with others. See SEC rule 14a-7.
• Picking the sympathizers: A full solicitation is costly and/or time-intensive. When reviewing a list of institutional investors, identify public pension funds, universities, and socially responsible funds that may be more sympathetic to your proposal, or more influenced by lobbying (either by you or by their constituencies). Conversely, some investors, such as traditional mutual funds, are difficult to lobby effectively.
• Identifying the proxy voter: Institutional shareholders may have specific personnel who vote proxies, in-house or contracted out to proxy voting services. Make sure to contact the proxy voter during solicitations. Many investors do not vote their proxies until the week before the annual meeting, and may have hundreds if not thousands of resolutions to vote upon, so make sure to bring attention to your particular resolution. On an ongoing basis, it would also be helpful to talk with those at the institution responsible for creating proxy voting policies, the guidelines an institution uses when voting for or against proxies.

• Rule of thumb: As always, no false and misleading information is permissible. Back up your assertions and reference facts. State opinions as such.
• Sample proxy solicitation letters: A typical way in which proponents notify other shareholders of their of resolution is through a "Dear Shareholder" letter. Consider how a professional designer or clever copy can make your solicitation materials more eye-catching or attention-grabbing.  Please click on the links below for sample solicitation materials for:
• Dear Shareholder letter and brochure for Maxxam (professional layout and design make these solicitation materials eye-catching):
• Maxxam Proxy Solicitation Brochure
• Dear Shareholder Letter for Maxxam Corporation
• Dear Shareholder letter for Home Depot and Enclosure:
• Letter to Shareholders from Trillium Asset Management - May 10, 1999
• Fact Sheet - Proposal No. 4: Report on the Phase-Out of Old Growth Timber
• Dear Shareholder letter for global warming resolutions and Enclosures:
• Letter to Shareholders from Interfaith Center on Corporate Responsibility
• Exxon Global Warming Resolution - 1999
• Mobil Global Warming Resolution - 1999
• Ozone Action Fact Sheet - Business Leadership on Global Warming
• Ozone Action Fact Sheet - Scientific Consensus on Global Warming
• Fact Sheet - 1999 Shareholder Resolutions on Chlorine-Free Paper
• Dear Shareholder letter for Occidental Petroleum and Enclosures:
• Letter to Shareholders from The Sinsinawa Dominicans - April 14, 1999
• Fact Sheet - The U'Wa: Occidental Shareholder Briefing
• Timeline: Occidental Shareholder Briefing
• Media: Occidental Shareholder Briefing
• Dear Shareholder letter for Dollar General Corporation and Enclosures:
• Letter to Shareholders from the Calvert Group - May 5, 1999
• Dollar General Stockholder Proposal #1
• Dollar General's Board of Directors' Response
• Generating votes through ads: sample advertisements for General Electric, Maxxam. Take out ads in national papers or in the local paper where the company is headquartered. Company employees sometimes hold significant numbers of shares.
• Generating votes/ raising awareness through media: You can also generate press for your proposal 4-6 weeks before the annual meeting, when investors are voting their proxies. For example, an article on environmentally responsible shareholder resolutions appeared in Pensions and Investments in 1999.
• Generating endorsements: Getting public endorsements from leading institutional investors can be key. See for example, a "Dear Investor" letter from CalPERS and Comptroller of the State of New York endorsing corporate governance resolutions at Maxxam, and accompanying press in The Wall Street Journal and The Chicago Tribune. Also, endorsements from shareholder advisory firms, such as Institutional Shareholder Services, can give resolutions a boost. (see 'Proxy Voting Services', below)
• Mailings versus visits and calls: Phone calls and personal visits seem to be far more effective than simply sending proxy materials without follow-up. Consider personally calling or visiting key institutional investors to build a relationship and make your case.

• Institutional investors may hire an outsider proxy voting service to review and vote their proxies each season. Make sure to notify proxy voting services of your resolutions. The more financially relevant and corporate governance-related your resolutions are, the more votes you will likely receive.
• Some firms, such as Institutional Shareholder Services, provide proxy voting services along with influential advice, particularly on corporate governance issues. As many institutional investors vote their proxies according to ISS's recommendations, it is important to make sure ISS receives good data and information about your resolution.
• Firms like Proxy Monitor tend to be more friendly to environmental and social issues.
• Companies like IRRC, Investor Responsibility Research Center, also provide proxy voting services, particularly for American shareholders of foreign companies.

You may hire professional proxy solicitors or investor communications firms such as ADP, Georgeson or Shareholder Direct to perform proxy solicitation for you. Though they tend to cost thousands of dollars and typically have companies as clients, they can put together effective materials, tap their contacts, and provide expert solicitation.
 
Being Realistic About Goals and Votes Received

Remember that social resolutions typically gain relatively low votes. Even during the peak years of the anti-apartheid movement, South Africa divestment resolutions typically won under 15% of the vote. Also, some companies are "closely held," that is, the majority of their voting stock is concentrated in the hands of insiders, such as top management or family members.
 
 

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