6 Reasons Why Shareholders Should Vote Their Shares

If you own common stocks, you may already have received proxy statements and voting materials for the upcoming annual meetings of companies in which you hold shares. If you never or rarely vote your shares because you don't believe your vote matters or think the process is too time consuming, now is the time to rethink your position. Here are 6 reasons to vote your shares.

1. As a shareowner you are part owner of a company. If you care enough to own a piece of a company, you probably care how its management and board of directors are overseeing your investment and how the company is performing, since both can have a direct effect on your shares' price. Voting your shares is your opportunity to have a say on these matters.

2. Voting your shares is easy. You can vote by mail (a postage-paid envelope should be included with your voting materials), by phone, online, or in person (if you plan to attend the annual meeting). If you prefer the ease of online voting, just arrange with your broker or the company in which you own shares to have notifications about proxy voting emailed to you, set up an account at proxyvote.com, and go to this site to review financial reports, including the proxy statement, and to vote your shares.

3. Shareholder voting doesn't have to be time consuming. If you don't have the time or inclination to read every page of the proxy statement, simplify the process by focusing on a few key issues. For example, some experts recommend that you not vote for directors who don't own shares in the company or those who don't attend a substantial majority of board meetings or meetings of board committees on which they serve. Also, if you believe that management is overpaid relative to the company's performance, you can make a statement by voting against additional option grants, if an incentive stock option plan is on the ballot, and by voting in favor of a shareholder advisory role on compensation, which is appearing on many ballots this year. Finally, don't overlook shareholder proposals that may be on the ballot. Although the board often opposes such proposals, they may address governance, compensation, environmental, social, and other issues of concern to you.

4. Your shareholder vote can make a difference. Individuals own an estimated 30% to 35% of outstanding shares, enough to matter if large numbers take a stand on a particular issue such as executive pay.

5. Increasingly, individual investors are making a difference. Many shareholder proposals are gaining more votes or even passing and, in some instances, companies are even recommending a vote in favor of specific shareholder proposals.

6. A significant change in shareholder voting rules effective January 1, 2010 means that your shares may not be counted if you don't vote. Previously, if your shares were held at a brokerage firm and you didn't provide voting instructions to your broker, he could vote the shares at his discretion. As of January 1, your broker no longer can vote your shares without direction from you. As a result, it is more important than ever that you take advantage of your right to vote.

Sources:

Tara Siegel Bernard, www.nytimes.com, Your Money - Small Shareholders May Get a Say With New Rules and Methods

Stephanie Barton, www.investopedia.com, How Your Vote Can Change Corporate Policy

www.sec.gov, New Shareholder Voting Rules for the 2010 Proxy Season