Alliance Advisors provides expert advice fueled by ongoing data-driven research on all matters of corporate governance, compensation, environmental and social (ESG) proposals. Given the growing importance that investors are placing on ESG topics, it is critical that issuers along with their Boards are prepared to discuss these subjects both in the proxy statement and during off-season engagement with shareholders in a meaningful and constructive way. Alliance’s staff of highly experienced governance professionals provides the guidance and expertise needed to enhance the shareholder engagement process while maximizing support of your agenda. Services include:
Alliance conducts hundreds of successful proxy solicitation campaigns annually for corporations globally, across the entire range of market capitalizations and industry sectors. This unique form of proxy and advisory work exposes Alliance to every conceivable type of management initiative, governance issue and shareholder proposal. Given this exposure, Alliance is well armed with extensive proprietary databases, cataloging each scenario that our clients have experienced, as well as the corresponding investor and proxy advisory firm dialog and eventual voting responses. This experience, combined with our database of knowledge, allows Alliance to provide the most effective advice on all ESG and compensation scenarios.
Governance proposals typically include the election of directors, Say-on-Pay, Mergers & Acquisitions, equity plans, increases in authorized shares, the issuance of preferred stock, reverse stock splits, the elimination of super majority voting, re-incorporations and bylaw amendments. Today, most governance issues have either been widely adopted or are being addressed through the shareholder engagement process. Alliance has a wealth of proprietary data and expertise to assist our clients in assessing these topics and proposals. This includes investor and proxy advisory firm sentiment, projecting likely voting outcomes and addressing these issues during discussions with their institutional investors.
ESG topics have become as important to many investors as compensation and Board related topics. Environmental issues include climate change, sustainability reporting, reducing greenhouse gas and coal ash risk. Social issues involve political lobbying and expenditures, Board diversity and composition, human and corporate culture, the opioid crisis and drug pricing. Based on our experience with these environmental and social issues, Alliance provides strategic advice with producing highly accurate vote projections, strategy around proxy disclosure and suggesting the approach to either adopt or combat these types of shareholder proposals.
Equity Plan Analysis
Shareholders evaluate management proposals to adopt a new equity plan or adding shares to an existing plan to ensure the terms of the plan meet best practices and are not overly dilutive. Our governance experts provide advice to clients to help maximize shareholder support for these plans. Our Equity Plan Analysis provides:
- Analyzing your shareholder base and their proxy voting policies to design a plan that is in compliance with the policies of your shareholders
- Identifying primary vote drivers that institutional investors will use in making voting decisions such as voting power dilution, burn rate and other plan provisions
- Provide projections on how shareholders are likely to vote on your plan proposal
- Our staff will model the ISS Equity Plan Scorecard if necessary
Alliance will leverage its proprietary database of institutional voting records along with N-PX filings to provide a comprehensive overview of how institutional investors and underlying funds voted at your most recent shareholder meeting. From Say-on-Pay to shareholder proposals to director elections, this report is indispensable in order to conduct an effective outreach program.
Our Proxy Solicitation Group works with each client to create an effective engagement plan based on our client’s specific needs. As a starting point we will review and analyze your shareholder base and can assist in coordinating calls with the voting decision makers at each specific institution. Our advisors will assist in setting-up calls with the proxy advisory firms as required. Most importantly, Alliance prepares our clients for each engagement by providing:
- Investor Dossiers
- Potential governance, compensation or ESG questions you may need to address
- Mock investor calls to run through the questions and appropriate answers
- Post review of shareholder calls
Alliance understands the importance institutional investors place on disclosure in the proxy statement and will guide clients by providing them timely advice on leading trends. We work alongside our clients to review the proxy statement in order to provide commentary from a shareholder and proxy advisory firm perspective in order to maximize support from these constituencies at your next shareholder meeting.
In assessing the cost of capital, the major impact of Environmental, Social, and Governance (ESG) considerations in today’s financial markets cannot be overstated. In many cases, investors, both current and potential are examining companies’ sustainability and social impact when evaluating their investment decisions in a particular company or even industry. Many investors feel that by considering ESG they can avoid investing in companies’ whose environmental or social practices may create a financial risk. Consequently, it is imperative that Boards of Directors and senior management make identifying their ESG pressure points and enhancing disclosure in the proxy a priority.
Several large institutional investors have made it known that they expect Boards to take a proactive approach to implementing oversight. This includes various types of reports, clear and timely disclosures as well as a meaningful engagement program with the company’s investors. Our expertise with your investor’s and the proxy advisory firm’s approach to these issues governs our capabilities to implement a best practices approach to ESG disclosure and proposals which are as follows:
- Develop a peer group and review their ESG initiatives
- Conduct ESG proposal research, trends and voting data
- Evaluate ESG voting policies of your investors and the proxy advisory firms
- Implement and manage a shareholder engagement program