Memorandum from the Office of Commissioner Luis A. Aguilar regarding a November 5, 2010 ...

234 Pages·2010·17.64 MB·English

MEMORANDUM

November 8, 2010

To: File No. S7-14-10 (Concept Release on the U.S. Proxy Voting System)

From: Zachary S. May
Office of Commissioner Luis A. Aguilar

Re: Meeting with Representatives of Broadridge Financial Solutions, Inc.

On Friday, November 5, 2010, Commissioner Luis A. Aguilar and Zachary S. May,
counsel to the Commissioner, met with the following representatives of Broadridge
Financial Solutions: Chuck Callan, Brian Clark, Lyell Dampeer, John Gullotta, Michelle
Jackson, Bov Kalenka, Mike Mostransky, Bob Schifellite, Marvin Sims, Bruce
Weissman, and Jill Whitney. During the meeting, participants discussed, among other
things, the Commission’s concept release on the U.S. proxy voting system.

The Broadridge representatives provided the following documents:

Slide deck: Discussion of Investor Participation
Slide deck: NYSE Proxy Fee Advisory Committee
Slide deck: Steps Taken to Ensure Vote Accuracy
Slide deck: Broadridge Technology Update (copyright material, not attached)

Report by Deloitte for Broadridge Financial Solutions Inc., Investor Communication
Solutions: Independent Accountant’s Report on Applying Agreed-Upon Procedures
Relating to the Company’s Testing of the Accuracy of its Processes and Reporting of
Voting Instructions, Three Months Ended May 31, 2010

Report by Deloitte for Broadridge Financial Solutions Inc., Investor Communication
Solutions: Independent Accountant’s Report on Applying Agreed-Upon Procedures
Relating to the Company’s Testing of the Compliance with Certain SEC and NYSE Proxy
Rules, June 30, 2009

Report by Deloitte for Broadridge Financial Solutions Inc., Investor Communication
Solutions: Independent Accountant’s Report on Applying Agreed-Upon Procedures
Relating to Measurement Criteria, December 29, 2008 – June 26, 2009

Report by Deloitte for Broadridge Financial Solutions Inc., Investor Communication
Solutions: Independent Accountant’s Report on Applying Agreed-Upon Procedures
Relating to the Reporting of the Stockholder Voting Results for Registered and Beneficial
Shareholders, Including the Election of Directors, January 1, 2009 – December 31, 2009

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Report by Deloitte for Broadridge Investor Communication Solutions, Inc.: Report on
Controls Placed in Operation And Tests of Operating Effectiveness Relating to Proxy
Services, January 1, 2009 through December 31, 2009

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Estimated Savings to Public Companies from Use of Notice and
Access with Beneficial Shareholders
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Est. N&A Est. N&A
Savings 1363 Savings 1601
Companies* Companies*
* Netofservice fees
The 2010 unit savings estimate is based on information from NIRI and Broadridge
internal data. It includes a medianAnnual Report cost of $ 4.32 per NIRI. and an
average actual postage cost per package of$ 1.45 per Broadridge.
The 2009 unit savings estimate is based on comparable data from NIRI and
Broadridge.
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Companies Using Notice and Access
Retail Voting Response by Distribution Method by Shares
%Shares Voted
• LastYear(7/1/08-6/30/09) • CurrentYear(7/1/09-6/30/10)
100%
90%
_--_._----_._---------_._------_.
..
80%
700/0
60%
50%
40%
30%
20% •••~....._._.._.,"w.,•.~._,~,....,••'•••,"~~_._~__
10%
o 15.28% 18.12%
NoticeRecipients FullPackage FullPackageby FullPackageby TotalActualRetail TotalActualReturns TotalQuorum
byConsent Fulfillment Stratification Returns - AllShareholders
Shareholderswho Shareholderswho Shareholders who Shareholderswho Actualretailvote Actualvoteinstructions Allsharesvoted
receivedanoticeonly previouslyrequestedto receivedanoticeand receivedfullpackage instructionsreceived receivedfromall Includingbrokervote
alwaysreceivefull requestedfullpackage materialsbecausethe shareholders
packagematerials materials issuerchosetosendfull
packagematerialstoa
subsetofshareholders
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Companies NOT Using Notice and Access
Retail Voting Response
Ok Accounts Voted %Shares Voted
-----_._._---_._-----------,
~-------------------.-------:1
: 100%..------.-....-..-.---.....--.------.--.-----.-.. 100
% . .__..__
90~° -_ __.._----_._-----_._-----_..__ I 90%
...-..-----.---..---....-......--...-..-.-.---......-.-..----.....-.-----.-_I.!
80% 80%
70% 70% I
_·.. •._..._._..._.._·_"_·A_. .·_. H_._._...__.__ . ..._._._..._._.._, .- ii
,··~_._ ~_.
60% ! 60%
- (
50% 50%
I
-
40% 40%
30% 30%
20% 20%
10% 24.02'1" 10%
19.39% 22.65%
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TotalActualRetail TotalActualReturns TotalActualRetail TotalActualReturns TotalQuorum
Returns - All Shareholders Returns - All Shareholders
,
I Actualretailvote Actualvoteinstructions i Actualretailvote Actualvoteinstructions Allsharesvoted
instructionsreceived receivedfromall f instructionsreceived receivedfromall includingbrokervote
! shareholders I shareholders
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___________ .---1
L....-.. ._..
• LastYear(7/1/08-6/30/09)
Broadridg~f
• CurrentYear(7/1/09-6/30/10) •
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Companies Using Notice and Access
Retail Vote Response by Distribution Method by Accounts
0/0 Accounts Voted
• LastYear(7/1/08-6/30/09) • CurrentYear(7/1/09-6/30/10)
r
i
100
% ----.------------------------
90
% ----.-.--....
180
% ---------..--.-.---------------.-------------.--------------------.----.-----.----..-.--.-.-..- .....--.-.•.-
i
i70%
------.------
I
1600/0-.----- ---
!
150%
I ----------.--------..---..----.----.....-----...--.-----..--.-....---
i
140%
_______ ___ A .. __.__.__."._..· . __._
.~_ ~ _~,~ .~_.H
i
300/0 .---------
1
1200/0
.-_. = - - - - - - -
110% =.... ....... .....-.. .. .........-..-_._-_._._._....._-........-.......-_._---_.._--_.__._----_._---
···..·-·4:03%"··_·4.58%
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NoticeRecipients FullPackage FUllPackageby FullPackageby TotalActualRetail TotalActualReturns
byConsent Fulfillment Stratification Returns - All Shareholders
Shareholderswho Shareholderswho Shareholders who Shareholderswho Actualretailvote Actualvoteinstructions
receivedanoticeonly previouslyrequestedto receivedanoticeand receivedfullpackage instructionsreceived receivedfromall
alwaysreceivefull requestedfullpackage materialsbecausethe shareholders
packagematerials materials issuerchosetosendfull
packagematerialstoa
subsetofshareholders
_._-----_._----_.
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Comprehensivesiteaboutthe I Low I Complete
mechanicsofproxy voting
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Unbiased explanation of the Notice & Low !comPlete
Access process
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Online participation and voting atthe Low fcomp,ete
meeting
Interactive proxystatementswith links Medium Draftopen-sourcecode donatedto XBRL U.S.
tovoting
Standing voting instructionsfor retail Medium Discussionswith interested parties
investors, akinto some institutional
voting
Private label communications portal on Medium Madeavailable to over14million accounts. Integrated
brokers'websites with accountpreferences
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Secure, two-waycommunicationswith I High Potentialforsystemicchange in shareholder
and amongvalidated shareowners engagementand participation
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Investor Mailbox
Account-specific presentation of investorcommunications on brokerage website.
Regulatory and non-regulatorycommunications:
• Proxy statements, linked to secure voting site
• Interim and regulatory documents
• Reorg notices
• Statements, trade confirmations, tax forms
• Prospectuses
Currently available to over 14 million accounts. Discussions with large broker-dealers representing approximately40
million accounts
Does not replace current "default"distributions to shareowners. Provides an additional access portal to view
shareowner material and to vote ifapplicable.
An improved online value proposition. Significant increase in "consents" to e-delivery, e.g.:
Broker1 Broker2
Wo;gg:.
937,349
000000 16,000
\00:000 14,000
BOO,OOO ,_,', _, 12,000
10,000
8,000
500,000 360;48 :,".""', 6,000
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~ 4,000
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The Shareholder Forum Provides Multiple Ways to Engage Stockholders.
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• Viewyourshareawnermaterialbychoosingtheoplonbelow
• Vote bychoosingtheoptionbelaworvotebyphoneat1-BOG->OO<-x>¢<){
• Requestmaterialtobesent10\OUbyemaHorhardcopyatnochargebychoosing!heoptionbelaw
• SignuptoreceiltefuiJreshareholdermaterials\liae-mailortraditionalmail
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©200B8roadridgeFinancialSolutions,Inc.8roadridgeandthe8roadridgelogoaretrademarks of8roadridgeFinantcialSolutions,Inc.
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• Broadridge
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