Helping public companies and their suppliers deliver better and more cost-effective programs since 1994


It’s been a long time since we last shared our top tips on choosing a proxy solicitation/proxy advisory firm…And wow…the industry has changed a lot since then…not least in terms of the specific “talent” that each firm has on board, as noted above…which, please note well, is the number-one thing that proxy firms have to offer.

Another thing that’s changed big-time, it used to be that only about a third of U.S. public companies used a proxy solicitor in any given year. But with the explosive rise of shareholder activism, and the increasing likelihood that your company may suddenly find itself the object of activist attention, we have been urging readers to use a solicitor at least every other year, and to keep them ‘on call’ to you, in order to be sure that you – and they – are in fighting trim should an activist knock on your door..

Very important to note, most of the biggest companies have already adopted most of the activists’ “governance hot-button provisions” – which means that more and more small companies are being targeted every year: Companies that are taken by surprise will always find themselves in a very tough spot if they are unprepared, and unready to spring into immediate action when activists knock.

So we have been saying that every public company ought to have a solid relationship with a solid proxy solicitor - and noting too that the kind of industry you’re in - and the kinds of activists that are likely to target your company - should be a major factors in choosing the right solicitor. And nowadays, we have been saying that even companies that have used the same solicitor for years would be smart to watch the Proxy-Land landscape with some care, and to formally survey the field from time to time. Our grapevine tells us that a lot of companies are doing that very thing these days.

Readers may not know that we have a lot of hands-on experience here – first as a founder of a proxy solicitation and stock-watch/shareholder ID business, back in the 1990s – but also as a regular participant in “closely contested election matters” - including dozens and dozens of knock-down, drag-out proxy fights - for over 40 years now, albeit as an officially “neutral observer and judge” as the Inspector of Election. Our required neutrality doesn’t mean, of course, that one doesn’t form opinions on the players as the fights progress– and especially after the dealin’s are done. Quite the contrary: We Inspectors really need to watch our own backs, since the first rule of proxy fights is that “all’s fair in love and war”…and proxy contests are exactly like war…and we do not want to be among the casualties because we were out-foxed by one side or the other.

The last time we wrote about this, we spent quite a bit of time on how to review the fine details on the specific services, fees, and out-of-pocket expenses on offer, which are, of course, important, and where most times we have discovered some pretty significant differences among providers upon close inspection. We’ll say once again, it will usually pay you back many times over to get an expert to help you formally review the field. But while yes, the dollars are important, and sometimes are a pretty good indicator of the way some firms do business (hidden fees are a major red-flag in our book) we’d urge you to concentrate your efforts on…


  1. Who’s at “the top of the house” – and what is the “tone at the top” really like? This, we think, is the number one issue to explore when evaluating any business before ‘investing’ in them. And in our book, hiring a proxy advisory firm should truly be looked at as making a very important, long-term investment.

2. Meet the top-two or three officers, who, typically, are not just leaders, but founders of the business. They really do set the tone at the top, for better or sometimes, though rarely, for worse. The best of them will have deep contacts and deep insights into the kinds of people who follow your particular industry, lots of personal – and successful experience “in the trenches” – and inspire strong loyalties among their first lieutenants – and ideally, in all the staff. The presence of these qualities – or the lack thereof – is usually quite discoverable by careful observers, so visit them at their headquarters if possible, listen closely to what they say about what makes them a good fit for your company - and observe them, and their workers, and their workplace, with care.

3. Another of the most important qualities to think about, as we’ve noted many times before, is the “chemistry” that exists – not just between you and your selection team, but how well you think it will mesh with the chemistry of your senior management and the board as a whole if a tough issue or a major crisis were to arise. Our own preference is usually for very thoughtful, statesmanlike people, who try hard to avert, and then to quickly resolve a crisis should there be one, and who always stay cool, calm and collected. But sometimes, you and your board may prefer – and may actually need a “bomb-thrower”, or, at the least, a fighter who will out-think and out-maneuver the opposition, and fight like hell to the finish. (A special note here: Ideally, the firm you pick will have top people who can act and pivot comfortably in both kinds of roles.)

4. A very practical matter, but one that is often overlooked; be sure you are crystal clear about who is really “ON” your account – and exactly what you can count on each of them to do for you, both on a day-to-day level, but also in a crisis. Does your lead contact have the required clout with the top-two or three? Do they have adequate backup behind them? Most important perhaps, will the top-three be “on your account” and fully available to you if circumstances warrant?

5. Last but far from least, since most of the firms you investigate are equipped to do the job; apply our

“lifeboat test” and the decision will almost always come clear. As we’ve reminded time and again, the “lifeboat analogy” is a perfect one here: In a crisis - where there is often chaos on every front - everyone needs to work perfectly as a team, to fully pull their weight toward a common goal… and to add something indispensable to the team effort in order to be ON the boat.

Readers, feel free to call us if you have questions, or wish to discuss further. Remember, a subscription to the OPTIMIZER comes with the promise of “some free consulting on any shareholder relations or shareholder servicing matter that ever crosses your desk.” It’s also been a great way for us to keep in touch with the things that are most on our readers’ minds.