E-Proxy Timeline for Early Adopters

According to NIRI, 29% of investor relations officers surveyed said that they expected their companies to adopt a combination of notice and full set delivery of proxy materials in 2008.  22% plan on using the notice only model (also called the notice and access model in which a company sends a notice to shareholders at least 40 days before its annual meeting of shareholders letting them know that proxy materials are available on a public website other than EDGAR), while only 3% plan on sending a full set of proxy materials to all shareholders.  Almost half of those surveyed were still undecided as to how their company’s proxy materials will be delivered this year.

For those companies choosing to blaze the e-proxy path, the following timeline provided by NIRI should prove helpful:

  • Immediately – Determine method for proxy material delivery (notice only, full set delivery only or a combination of the two).

  • 60-100 days prior to annual meeting – Coordinate proxy delivery plans and important dates with partners, including your IR firm, outside legal counsel, annual report printers, proxy material website builders and proxy solicitors.

  • 46+ days prior to annual meeting – Confirm that your proxy website is running properly.  Remember that materials must be in both readable and printable format.  The website must ensure visitors’ anonymity and be capable of handling heavy traffic.

  • 45+ days prior to annual meeting – Deliver notice and access cards to all parties responsible for mailing materials to your shareholders.

  • 40+ days prior to annual meeting – Mail notice and access cards to shareholders (as well as printed proxy materials if you are adopting a combination delivery strategy).  Remember to file your notice and access card with the SEC.

Some additional NIRI pointers:

  • Monitor proxy responses regularly.
  • Respond to investor requests for printed materials within three business days.
  • Record requests from shareholders who have opted to receive paper materials on a permanent basis.


Laurie Berman, Senior Vice President, lberman@pondel.com

A Little Optimism for ’08

It never hurts to express a little optimism for what could be in 2008.  And the Wall Street Journal did just that this morning with a list of why investors should feel pretty darn good about the year ahead.
Drum roll, please.

  1. Stocks rally — Assuming we’ve seen the worst in the fourth quarter.
  2. The housing market stabilizes — Really, how low can it go?
  3. Consumer spending remains solid — A healthy job market is keeping those cash registers ringing.
  4. Corporate profits accelerate — The jury is still out on this one.
  5. Economic growth accelerates — The Fed’s gonna have to provide some assistance here.


 — Evan Pondel, Senior Associate, epondel@pondel.com

Bubbles, Bubbles, Bubbles

A little cynicism to start the new year off right!


PondelWilkinson, investor@pondel.com

Conference Buzz: Bored of Directors

Rising shareholder activism clearly topped the hot topic list when the National Investor Relations Institute’s senior-most members got together recently at their annual roundtable bash at the posh Montage resort in Laguna Beach.
Two take aways…

First, consider having a large institutional shareholder sit on the board. Other professional shareholders will like that and sense that their interests are being well represented. It will keep activists away. 
Second, in a swing of the pendulum and score for baby boomers and smart young dot-com retirees, seek board board members. No, that was not a typo you just read. The wisdom being imparted relates to seeking directors who have time to be directors, rather than time-strapped CEOs and others who are actively engaged in their careers.

As for Laguna Beach, it was too chilly to get a suntan.


Roger Pondel, President, rpondel@pondel.com

OTCBB – Stock Symbol Requests Not an Option

Issuers with stock trading on the OTC Bulletin Board (OTCBB) need to be aware that a corporate transaction, which results in the issuance of a new cusip number, triggers an automatic change in the ticker symbol. According to the folks at the OTCBB, the issuer is “not allowed” to reserve or request a specific ticker symbol.  No ifs, ands or buts about it.  While no one I spoke with at the OTCBB could tell me why requests and/or reservations are not allowed, the only possible conclusion is that allowing reservations on the OTCBB would reduce the pool of ticker symbols available to Nasdaq traded issuers.


PondelWilkinson, investor@pondel.com

Do Retail Investors Matter?

A recent survey by Thomson Financial noted that only 18% of 102 investor relations officers (IROs) surveyed actively court individual investors and that less than 25% had plans to begin doing so in the near future. In a report on the survey, IR Magazine, noted that while some IROs believe individual investors can add to the stability and diversity of their company’s investor base, many do not think the effort is worth it, citing the tribulations of dealing with mom-and-pop investors who might panic with downward price movements, bombard companies with questions and increase the risk of securities class actions.
However, for a public company that is largely held by institutions, increasing the retail base might not be a bad idea. Increasingly, large institutions and mutual funds are becoming activist in nature and many are opposing proxy initiatives. The National Association of Investors Corporation (NAIC) notes the following characteristics of retail investors:

  • On average, NAIC’s 119,000 members hold a stock for at least four years (that is much, much longer than the average institution holds a stock).

  • The combined portfolio value of NAIC members is $70 billion.

  • Cumulatively, NAIC members invest approximately $75 million of new capital per month.

So, if you’re an IRO looking for a way to bring new interest into the stock, it might be worth investigating some of the retail-oriented investor communications programs that are available to help you reach this powerful group of long-term investors.


Laurie Berman, Senior Vice President, lberman@pondel.com

Goldman Outshines Forecasts

Goldman Sachs Group Inc. on Tuesday reported a 2.2 percent increase in fiscal fourth-quarter net income, bolstered by investment gains that apparently offset prickly market conditions. The Wall Street behemoth posted net income of $7.01 a share, clearly out swimming the $6.61 a share estimate that Thomson averaged from analysts’ forecasts.
But don’t think for a moment that all that glitters is a sign for better times ahead for the financial services sector. According to analysts, about 75 cents of the net gain in earnings per share came from sales of equity investments and electricity plants. That means Goldman’s clients aren’t necessarily trading stocks because of new-found faith in the economy. On the contrary, it points to the lack of faith Goldman has in the economy as it tries to fatten up in anticipation of what could be a rather fruitless period ahead.


Evan Pondel, Senior Associate, epondel@pondel.com

Wall Street’s Dress Code

From Brooks Brother’s and Armani pin stripes to those who found True Religion, it’s hard to tell  whether Wall Street’s dress code is changing again. Along the trail of PW’s last 2007 roadshow—this one exclusively with institutional investors—business casual still rules. 
While observing 23 portfolio managers and buy-side analysts from firms as large as $800 billion under management in Boston (guess which one) and as small as $50 million:  five, equal to 21.7%, were dressed in denim, including the only female; 11, or 47.8%, donned slacks and open collar shirts; and seven, or 30.5 %, were of the old school vintage, wearing ties.  Of the presenting executives, 100% wore suits and ties.
Other roadshow observations … 
Less than two hours from bustling Manhattan, money managers abound.  In a day, we visited firms in Greenville, DE, just outside of Wilmington, plus West Conshohocken, Malvern, Berwyn and Radnor, PA, all within a stone’s throw of Philadelphia.
And what to eat? Picks from the trip: Oceanairre in Philadelphia; Luca in the North End of Boston; Town in the always hip Chambers Hotel on West 56th Street in Manhattan. Try the lamb.


Roger Pondel, President, rpondel@pondel.com

*Holiday Market Trading Hours

The New York Stock Exchange will close at 1 p.m. Eastern Standard Time on Monday, December 24, 2007 in observance of the Christmas Holiday, however, the Exchange will be open for normal trading on Monday, December 31, 2007.
The American Stock Exchange and Nasdaq will follow the same holiday trading schedule.


Laurie Berman, Senior Vice President, lberman@pondel.com

To Audit IC or Not to Audit IC

That is the question.
Small public companies with less than $75 million of public equity may get another one-year reprieve from having to comply with one of the provisions of the 2002 Sarbanes-Oxley Act.  The Wall Street Journal (December 13, 2007, page C4) reports that SEC Chairman Christopher Cox is considering submitting a formal proposal in early 2008 that would exempt such companies from the rule requiring that they have their internal accounting controls audited and reported on by an outside auditing firm.  Meanwhile, the SEC will continue conducting a study on the estimated costs of complying with the external-auditor review provision to determine whether to phase in that requirement for small public companies in 2009, or propose a further delay or modification to the Act. 
The chairwoman of the House Small Business Committee has gone on record in favor of the delay, pending results of the study.  If the delay is approved, most small public companies will likely breath a sigh of relief, while shareholder advocacy groups will likely express their angst at what they perceive to be yet another move to undermine the important shareholder protections called for by Sarbanes-Oxley. 
Of course, voluntary compliance with the internal control review provisions remains an option for any small business and can help the board and management convey to investors their strong governance values.  A thorough assessment of the costs and benefits (both real and intangible) should precede any such decision.  PondelWilkinson is uniquely qualified, together with legal counsel, to assist your board and management in weighing the available options. 


PondelWilkinson, investor@pondel.com