Shareholder voting in company elections is going mobile.
Mobile phones are the fastest-growing means for individual investors to weigh in on a company’s executive pay, board nominees, and other matters that go up for a vote.
About 7 percent of individuals voted their shares in publicly traded companies via phones in fiscal year 2018, up from just 0.7 percent in fiscal year 2016, according to data from Broadridge Financial Solutions Inc., which processes the vast majority of shareholder votes in the U.S.
Mobile votes on corporate ballots usually come after an investor clicks through an email, which sends them to the mobile version of Broadridge’s voting website. Broadridge has teamed up with Raymond James to develop a new mobile voting feature directly in the broker’s app.
It’s the first of potentially many such app-based voting options as individuals increasingly interact with their investments, much like everything else, on their phones. These apps could boost voter turnout by getting investors’ attention in a way that paper ballots and emails can’t.
“We see brokers investing more and more in their apps as more shareholders go to them, especially millennials,” said Martin Koopman, who leads Broadridge’s investor communications work with banks and broker-dealers. “We’re putting voting where people go.”
Broadridge and other firms like it are turning to mobile technology amid a broader drive by the Securities and Exchange Commission to make the share voting process more efficient and accurate for all types of investors. The SEC has asked for industry input on how to modernize the decades-old system, which hasn’t seen many updates over the years.
Individuals vote their shares at a much lower rate than institutional investors, which account for a bigger slice of companies’ shareholder base. Voter turnout is less than 30 percent for individuals, compared to more than 90 percent for institutions, Broadridge data for the latest round of annual shareholder meetings show.
Most of the individuals who vote their shares do it online, though some still use paper ballots or call in votes by telephone.
Even those pushing for more modern methods of shareholder voting acknowledge the solution to low turnout isn’t simple. “A prettier interface” isn’t going to solve the voter participation problem, said Alexander Lebow, co-founder of startup Say Inc., which is developing an app and mobile website for shareholder voting.
“There needs to be competition” on voting technology, Lebow said.
Broadridge doesn’t have many competitors in shareholder vote services. Mediant Communications Inc. is a much smaller rival. Say wants to become one too by signing up more brokers as partners.
The companies want to use other mobile tools, such as social media, push notifications, and text messages, to alert shareholders to an upcoming vote and nudge them to cast their ballots.
“All of these tools are meeting investors where they are,” Sherry Moreland, Mediant’s president and chief operating officer, said. “Today, more and more of us are doing things on our mobile devices.”