About Proxyanalyst
As a self-directed investor one area I've struggled with personally over the years is challenges with proxy voting. It's not difficult to actually vote - Broadridge does a nice job with Proxyvote.com, which is electronically accessible. The challenge comes on how to cast the votes, and also from having to fill out as many proxy votes as you own stocks in your portfolio. Some of the questions that come up include, but are not limited to:
- With respect to Executive compensation, what has the company's economic performance (Revenue, profit growth etc.) been?
- How has the stock price performed in comparison with the stock market overall and the company's peer group?
- Has the company actually picked an appropriate peer group for the executive compensation analysis, or is it skewed in some ways towards larger companies that may have higher executive compensation levels?
- Have existing Directors actually done a good job in providing management and company oversight, resulting in adequate corporate business results with resulting stock price performance?
- Are we in a situation where perhaps long time Directors should step away if long-term corporate performance is below average (a No vote) while newer director nominees gets a Yes vote based on their skill set and experience
- Do we care about DEI and ESG with respect to shareholder proposals?
- For proxy contests, what are the key points for & against?
To cast an informed vote for even one proxy takes hours, and for individual investors the cost / benefit isn't there given the impact of their shares in comparison with large institutional investors.
As a result of these challenges, not surprisingly we find that individual / retail investors vote a small % of their shares, and corporate governance is dominated by institutional investors who vote a high % of their shares. Making matters worse is that institutional investors outsource their votes for the most part to "proxy advisory" firms of which there are only a handful. These firms effectively control corporate governance in the USA - which leads to suboptimal outcomes.
Elon Musk and Vivek Ramaswamy have highlighted this challenge yet to my knowledge nobody has done anything to make it better.
My short-term goal with Proxyanalyst is to make the data on Executive Compensation and Director nominees more accessible than having to dig through Proxy PDFs. My medium-term goal is to add analytics to help compare Officers & Directors against their industry/market cap peers, and to make it easier to form an opinion for investors of Yes & No votes. My longer-term goal is to make recommendations for these votes on Proxyanalyst, without ESG bias, and allow automated voting (opt-in) for investors who want to vote their shares but save the time from doing their own analysis.
A final note - I've used this idea of making proxy data more accessible as a way to see how far I can build a service on my own using AI tools, and with some help from my family members who have CS backgrounds (vs. my background in Philosophy / Finance / Product Management). So if you find any issues, or want to provide ideas or feedback please drop me an email at bill@proxyanalyst.com.