5 Tips for Shareholder Outreach and Engagement
By Hari Bhatt
March 9, 2026
With proxy season fast approaching, governance professionals are preparing for another round of proxy drafts, equity table headaches, and time-intensive shareholder engagement. Having a few pointers regarding shareholder engagement and outreach could help position you and your team for success and a positive annual shareholder meeting outcome. Here’s a few tips our experienced team here at Lioness has put together based on our experience.
Reaching the Retail Vote
It’s no secret that decoding the retail shareholder vote is a far more arduous task than reaching institutional shareholders. With larger companies, retail shareholders can reach up to 40%, making engagement especially unwieldy. If you add to that the complication that comes with OBO (Objecting Beneficial Owners) and NOBO (Non-Objecting Beneficial Owners), and how hard it can be to track down who the OBO’s are. It’s easy to see why one would be tempted to simply write off the retail shareholder votes. (Our CAO, Pat Tracey, can help you obtain your NOBO lists if it’s a challenge you need help overcoming!)
That said, whether or not you know who your retail shareholders are; I highly recommend making the narrative as clear and readable as possible. The best-case scenario is that the retail voter gets confused and doesn’t vote. At worst, you risk them getting confused and voting against the board’s recommendation. This could look like writing sentences that aren’t too long, the text isn’t too small, that sections are properly broken up, and that the logic flows easily.
As can be expected, the ‘wall of text’ and sheer size of a proxy statement can intimidate a casual retail shareholder and sometimes confuse even more experienced readers (and I speak from experience).
Visuals, white space, breakups in text formatting, and even colors can help. The most effective tactic is to include a summary or a leading statement. Something clear to outline the main focal point you’d like the shareholder to take away.
That leads me to the next point: explain why. As a compensation consultant, I went on like a broken machine when advising corporate issuers on their draft proxies, repeatedly insisting they include their rationale in the proxy. If a one-time retention grant was made to executives, explain why now, and why this amount. If a shareholder proposal should be opposed, go into detail about why the company’s current efforts are sufficient and in line with peer practices. Despite the volume of text, people will read these statements, which makes this point applicable to institutional shareholders too.
From Pat, “To reach the retail investors – it’s best to time your outreach to the shareholders to coincide with the receipt of the materials via US Mail or via electronic means. Many retail voters do not participate in the voting process, and it can be for reasons such as indifference, intimidation at the size of the mailing booklets, and lack of easy voting instructions. A technique we use at Lioness is to time our communications with the shareholders as soon as they receive their proxy materials, capturing the retail investor’s attention before they toss them away.
Work with your legal counsel and other advisors in the design of proxy materials that are aimed at the retail investor. Provide clear instructions and perhaps a summary page which outlines what is on the ballot and how management suggests you vote.
Retail investors – while apathetic at times – often vote with management. If your company’s shareholder base has a large retail component – it’s worthy of pursuing this group and increase the voting returns.”
In short: make sure you reach your shareholders at the right time, and make sure that your materials are easy to read, especially if a large portion of your shareholder base is retail.
Be Proactive about Potential Concerns
While this advice is basic and redundant, if you know shareholders may have an issue or concern with something on the proxy statement at this meeting, it is best to not only find out about it sooner but also begin engaging with shareholders sooner. The most common cases that I’ve seen are compensation related in the CD&A, director election related (specifically overboarding), or equity plan related (most often dilution). Most companies begin working on their proxies a few months in advance, and the ballot items and equity needs can and do change frequently during this time, so it’s hard to always get advanced warning.
The companies most successful with getting shareholder approval tend to be those who begin working to engage their shareholders as soon as a potential issue begins to surface. If the equity plan is threatening excessive shareholder value dilution, figure out which of your shareholders have the lowest dilution thresholds, and begin priming them for the potential scenario. If a director that’s up for election may be overboarded and risks their independent director status, it’s a good idea to begin campaigning for their nomination.
There may be some matters which the company may not want to disclose due to confidentiality, trade secrets, or pressure from someone in management. The consequence of non-disclosure is that proxy advisory firms like ISS and Glass Lewis will assume the worst, which could impact the recommendations and Governance QualityScore. From experience, I can tell you that ISS holds the position that they will not make any assumptions or leaps of logic. Their unofficial policy when it comes to items that are open to interpretation is to assume nothing.
You may find that the research reports published by the proxy advisors have even noted the lack of disclosure when commenting on specific and relevant proposals. Most people express their irritation with these research reports, but I found, as an advisor and expert on ISS policy, that these research reports can, in fact, be used to help improve the next year’s proxy.
You may end up overprepared, but the shareholders will now know you value their priorities and feedback. Uncovering these issues isn’t always easy, especially months in advance. Services like compensation consultants, proxy solicitor teams, and even consultants can run early models, do the governance research, or gather feedback early, and get you the edge you need. (Lioness Consulting can help in all three areas!)
Target Your Shareholders’ Policies
I mentioned this at another point, but targeting your shareholders is an important aspect to make sure you’re optimizing your time, money, and energy.
For example, say you know that a management proposal wants to amend the termination payouts for executives to 2.99 times the base salary plus maximum target cash bonus. Vanguard states that “cash severance payments that total more than 2.99 times salary plus targeted bonus” would be deemed excessive and risk a NO vote. On the other hand, Blackrock’s policy on severance payments does not state a specific multiple of salary + bonus that would be considered excessive.
In this case, you could choose to focus your engagement efforts on Vanguard, who have an explicit policy regarding these payments.
This legwork obviously does not take long and is a standard part of a shareholder engagement team’s strategy. However, it’s always a good idea to check and see if you or your team is making sure that this kind of research is being done.
Let’s expand this example. Say you know that Blackrock holds 10% of outstanding shares, and Vanguard owns 2%. This muddies the water a bit. You may have to decide not to focus on Vanguard’s strict policy and accept that 2% of outstanding shares will vote against this compensation policy change. In this case, your engagement efforts to help Blackrock understand the rationale behind the severance policy gives the company a much better chance at convincing 10% of outstanding shares to support the proposal.
Demonstrate Long-Term Shareholder Engagement
Low shareholder support on an advisory say on pay vote is a major concern for most companies.
(especially if they’re not controlled companies). ISS states its thresholds for concern at 70% approval, and a high degree of concern at 50% or below. Poor responsiveness from a company could trigger an AGAINST recommendation on the say on pay from ISS, further cratering the situation.
Responsiveness is a tricky subject, but the core principles fall into three main areas:
Who you engaged with: Listing how many shareholders were solicited, how many engaged, in what manner, and by whom from the company.
What feedback was received: Disclosing specific topics, subjects, questions, and concerns.
Action taken in response to the feedback: What management plans on doing or has already done to address the concerns of the shareholders.
When the waters are calm and low approval isn’t an immediate concern, including this format of discussion in your proxy every year goes a long, long way towards establishing confidence that you have always been proactive and concerned with shareholder concerns. Even outside of say on pay matters, a proxy contest or concerning issue can be backed up with this type of historical evidence. You can say, with confidence, that your engagement is robust and efficient.
Conclusion
Whether it’s retail shareholders or institutional investors, outreach and communication are an essential part of proxy season. Clear communication, consistent efforts, and robust rationale will help ensure shareholders understand the issues at hand. Shareholder engagement can be complex and multifaceted, but sometimes double checking the basics will help a positive AGM outcome and establish confidence in the company.
We invite you to connect with us to experience the difference of tailored, strategic insights that drive successful outcomes in the dynamic landscape of corporate governance.