This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

Mail, 14 March 2021, SUPERMAN and #sharesocuk Support Shareholder Rights.

It is good news that The Mail on Sunday MailOnline is supporting shareholders and shareholders rights.

I get quoted….

Cliff Weight, director of investor campaign group ShareSoc, says wealth platforms make it so difficult for customers to engage that they are ‘disenfranchising individual shareholders’.

He says: ‘Most platforms don’t even pass on information and if you want to vote the method offered is practically prehistoric. As a result they’re throwing away millions of shareholder votes.’

Weight believes platform Interactive Investor is better than most. Eight per cent of its eligible customers voted last year at annual general meetings – a low turnout, but likely to be several times higher than most of its rivals.

It alerts customers who opt in for notifications of forthcoming annual general meetings when there is a vote and they can click through from the platform to exercise their right.

But chief executive Richard Wilson admits there is still more to do. He says: ‘ShareSoc kindly thinks we’re the best of the bunch at encouraging voting, but that doesn’t mean to say our process is perfect.’

Small shareholders can be sidelined.

Small investors are sometimes treated like second class shareholders. For example, when a company issues new shares, existing shareholders should have the right to buy them before others get a look in. This is known as pre-emption rights. But increasingly, companies ask shareholders to vote to waive their pre-emption rights, so they lose this ability.

When shareholders fail to turn up and vote against this motion, it gets carried and they lose their rights.

Wilson explains: ‘You have this crazy set-up where, because people don’t vote, the board sanctions a resolution that allows small shareholders to switch off their pre-emption rights so they don’t need to be asked if there’s a share raise.

‘It’s a systematic undermining of shareholders’ rights, delivered through a voting system which everyone knows no one uses. It’s a fundamental wrong.

‘For me this whole system is perpetuating a disenfranchisement or an isolation of retail investors. Institutional investors get all the fat and the retail shareholders pick up the gristle.’

The article concludes “You have shareholder rights over any companies or investment trusts in which you hold shares. So the message is: USE THEM.” I could not agree more.

The good news about Mail On Sunday and the Daily Mail is that there is no paywall, IT’S FREE, so everyone can read their very informative articles, unlike the FT, Telegraph and Times.

The Daily Mail makes its money from having 6 million online readers worldwide, and is one of the largest online retailers eg  gardening, holidays and wine as well as having several modern media/information businesses. The share price has had a good run over the past few years. 30% ownership by Lord Rothermere ensures long term thinking and alignment with shareholders. Voting structure makes it takeover proof.

Disclaimer: I do not own shares in the Daily Mail, although I have done in the past.

Cliff Weight, Director, ShareSoc

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