While public companies and their shareholders often strive for aligned interests and collaborative engagement, differing priorities can surface — particularly when strategic direction or governance decisions challenge investor expectations. Investors may seek near-term returns or specific ESG and sustainability commitments, while corporate boards prioritize long-term resilience and growth. When objectives don’t match, navigating this complex dynamic requires clarity, structure, and strategic communication.
Proxy solicitors play a critical role in these situations, functioning as specialized intermediaries during moments of shareholder decision-making. Retained by either issuers or activist investors, proxy solicitors help shape the narrative around proposals, promote awareness of the issues and voting deadlines, and secure necessary votes. Their work goes beyond vote gathering: they provide shareholder intelligence, interpret voting trends, educate stakeholders on the implications of details in the proxy statement In contested or other high-stakes situations, their expertise can mean the difference between success or failure (depending on who they are working for), and even the future direction of the company.
When Is a Proxy Solicitor Needed?
Investors may choose to hire the services of a proxy solicitor when they want to influence the outcome of a vote such as a merger, or to promote their own alternative slate of director nominees. Companies may also hire proxy solicitors to help gain approval of their proxy agenda. When companies file SEC form DEF 14A — the definitive proxy statement outlining proposals to be voted on — they alert shareholders to the upcoming annual meeting or other instances in which a shareholder vote is required. Reasons why entities might hire proxy solicitors include:
- Supermajority vote requirement
- Anticipated investor opposition
- More formalized opposition, competing solicitation or alternative board slate (i.e. proxy fights)
- Strategic changes that would affect shareholder value
- Voter approval for major transactions or M&As
- Increased shareholder voting participation goals
Companies should consider shareholder activism as a potential component of investor relations. While some investors are content with allowing the business to make decisions with little shareholder input, others want a direct role in shaping corporate governance. Public companies can leverage proxy solicitation to work with investors to find a common path, lowering the risk of a proxy contest or other battles for control.
Key Services a Proxy Solicitor Provides
Proxy solicitors act in the interests of their clients, offering a variety of services. For public companies, proxy solicitation can provide:
- Shareholder identification and profiling
- Vote projections, including real-time tracking
- Proxy communications strategy
- Outbound calling campaigns to engage investors
- Advice for clients on compliance rules and logistics
In essence, the proxy solicitor shows how the company or investor can reach the vote they need for a particular proposal or transaction — though they do not provide investment or fiduciary advice.
How Proxy Solicitors Support Shareholder Engagement
Proxy solicitors provide an important way for companies to increase shareholder engagement. While institutional and other savvy investors may be seasoned experts who have no trouble handling proxy voting procedures, others find the experience to be confusing or intimidating, which generally results in non-participation. Proxy solicitation can improve results from annual meetings and important votes by clarifying voting issues and procedures for shareholders, providing them with more confidence to make an educated voting decision.
“Routine” annual meetings, featuring the election of directors, and perhaps ratification of auditors and non-binding “say on pay” vote, can be dry or boring for disengaged investors, increasing the likelihood of problems such as failed votes due to a lack of quorum or sufficient positive votes. While virtual meetings offer convenience and broader participation, they aren’t panaceas for voter apathy. When companies hire proxy solicitors to assist, they can build trust by increasing awareness of the proxy statement, meeting date and voting requirements and procedures.
Proxy Solicitor vs. Proxy Advisor
Although proxy solicitors and proxy advisory firms may seem to fill similar roles and the terms are often though mistakenly used interchangeably, there are distinct differences. While both types of entities seek to facilitate or even influence votes on proposals or major transactions, proxy advisors take a much more indirect route.
Proxy advisors perform research, collect data, and make voting recommendations to their clients, who are typically institutional investors. Institutional investors are highly likely to vote – the question is HOW they will vote.
By comparison, proxy solicitors aim to garner enough votes from all segments of the shareholder list to yield a specific result, filling a more activist role in the proceedings. With institutional investors who they interact with throughout the year, they can identify opportunities for management (and the board) to contact selected investors identified as “on the fence” or more generally known to be flexible on particular voting issues, improving the efficiency of management’s investor contact efforts. Unlike institutional investors who will vote, retail investors often do not vote for the reasons described earlier, yet when they do, they tend to support the companies they own. So with retail, the solicitor seeks to increase awareness of the proxy agenda and deadlines and improve retail voting participation. Positive retail votes often are needed to overcome more skeptical institutional votes.
Improve Shareholder Engagement With DFIN
The proxy process can be complicated, particularly for contested votes or other challenges. DFIN simplifies the time and effort that companies must invest to provide critical disclosures to shareholders, with proxy statement solutions that increase accuracy and efficiency.
As a virtual data room provider, we also make it easier to hold virtual shareholder meetings, navigate high-stakes M&As, and comply with regulatory requirements. Our experience with Fortune 500 companies highlights our success at assisting in the most complex proxy campaigns. To learn more about how you can streamline your next proxy statement filing or annual meeting, contact us to request a demo.
