Proxy firm

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A proxy firm (also a proxy advisor) is a firm hired by shareholders of public companies (in most cases an institutional investor of some type) to recommend and sometimes cast proxy statement votes on their behalf. The top proxy firms are Egan-Jones Proxy Services part of Egan-Jones Ratings Company,[1] Institutional Shareholder Services[2] ( a subsidiary of MSCI after that firms acquisition of Riskmetrics and until its most recent sale to Vestar Capital Partners[3]) and Glass, Lewis & Co. Additional specialty firms include C&W Investment Group and Marco Consulting Group.[4]

By some accounts, ISS advised half of the common stock in the world as of 2010.[5] Some proxy firms play the role of proxy advisor, in which they simply advise their clients on how to vote.[6] A potential conflict of interest identified by the Government Accountability Office is that some owners of proxy firms do business with both issuers and investors.[7] In many cases, proxy firms have attempted to limit executive compensation.[8]

Although proxy advisory firms are most active in USA, India now has an institutionally backed voting/proxy advisory firm, Institutional Investor Advisory Services India Limited (IiAS). IIAS is dedicated to providing participants in the Indian market with voting recommendations on shareholder resolutions and providing independent research, opinions and data on corporate governance issues.

References[edit]

  1. ^ McRitchie, James. "Egan-Jones Proxy Services Acquires ProxyTell". corpgov.net. CorpGov.net. Retrieved 14 June 2014. 
  2. ^ Harris, Roy (2007-05-30). "Proxy Firms Fire Back at Critics". CFO.com. 
  3. ^ J. de la Merced, Michael. "Vestar to Buy I.S.S., an Influential Shareholder Adviser". New York Times. Retrieved 14 June 2014. 
  4. ^ "Proxy Advisory Services". Shareholder Communications Coalition. 2009. 
  5. ^ Hyatt J. (2010). Proxy Advisors Find Themselves in the Spotlight. Business Ethics.
  6. ^ Alistair Barr & Jonathan Burton (2007-06-11). "Controversy ignites competition among proxy firms". Marketwatch. 
  7. ^ "The influence of proxy advisory firms on executive remuneration". Guerdon Associates. 2007-01-10. 
  8. ^ Zac Bissonnette (2008-01-15). "Proxy firm questions Tyson chief's pay".