Every year, investors cast millions of proxy votes. Don’t miss the opportunity to make your voice heard. Here are five great reasons to vote your next proxy.
For many, investing often seems like a set-it-and-forget-it activity. But each year you’re presented with a vote that lets you potentially shape the direction of the company in which you’re invested. Among other things, you can help choose the board of directors, calibrate executive pay, and even vote on shareholder proposals.
Although you’re not required to vote your proxy, many shareholders vote out of a sense of duty. This is because, for them, ownership implies a responsibility to ensure their investment continues to grow and create value. Since shareholders literally own a piece of the company, they feel obligated to take care of that asset, much the same way they take care of their own home.
Under state laws governing a process called “escheatment,” brokerage firms are required to forfeit your account value to the state if they have not been able to contact you for a set period (usually five years). Each year, billions of dollars are escheated and the recovery process is not easy to navigate. Annual proxy voting, however, ensures you stay in contact with your brokerage firm, helping to minimize the risk of escheatment.
Proxy voting is a low-effort, high-impact way to advance issues that matter to you. If you’re concerned about the climate, vote on proposals that reflect your values. If you want to advance racial or gender justice, vote for greater board diversity. Proxy voting helps make sure your voice is counted.
Proxy voting is easy, but informed proxy voting takes a little more work. Most of the time, for example, you likely won’t already know director candidates up for vote. In this respect, proxy voting gives you a reason to do a little research and learn more about the companies in which you invest.
Check out our article that explains common shareholder proposals .