Companies look to virtual annual meetings to cut costs, increase turnout

February 6, 2015

Practitioner Insights thumbnail 2(Editor’s Note: This post is an excerpt from an article appearing in Practitioner Insights on WestlawNext)

Companies are increasingly holding their annual shareholders’ meetings online rather than in-person as a means to reduce costs and increase investor participation.

While many large companies have held in-person meetings with the option to participate online in recent years, Hewlett-Packard Co. recently revealed that its 2015 annual meeting will be “a completely virtual meeting of stockholders.” In its Feb. 2 proxy statement, the company said that it switched to a virtual meeting this year to “increase stockholder attendance and participation since stockholders can participate from any location around the world.”

Garden products manufacturer The Scotts Miracle-Gro Co. also recently held an online-only annual meeting. Shareholders were able to participate in the meeting, vote and submit questions via live webcast.

According to Broadridge Financial Solutions Inc., a provider of virtual annual meeting technology, the number of companies holding fully virtual annual shareholder meetings almost doubled from 2012 to 2014.

The corporate laws of most states, including Delaware, permit virtual meetings. In some cases, however, companies may need to amend their governing documents to eliminate the requirement that annual meetings must be held at a particular location.

Wireless technology company InterDigital Inc., for example, amended its bylaws to allow the company to hold a virtual annual meeting. InterDigital said that such meetings “provide shareholders with the ability not only to hear the proceedings and ask questions online, but also to vote real-time.”

The company said that it has not yet decided whether to hold a fully virtual annual meeting in 2015, but “wanted to make the bylaw change now so that we have the option, either now or in the future.”

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