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Trying to Reach Retail Holders in a Proxy Fight? Go Digital.

Kate Sylvester  Follow

As proxy fights at large companies become more and more common, the ultimate test for activists and management teams alike is now whether they can win the support of retail shareholders. While institutional investors like mutual and index funds still tend to hold a majority of the votes in proxy contests, individual investors have the power to tip the scales in a close vote.

When you look at P&G, for example, individual investors actually hold nearly 40% of the company’s shares. With the fifth largest retail investor base of companies in the Dow, neither P&G or activist investor Nelson Peltz could afford to ignore the influence held by the company’s retail holders in the biggest, most expensive proxy fight in history.

But with all this talk about the power held by these small investors, how do you actually reach them in a proxy campaign?

Although a strong shareholder outreach campaign begins with traditional tactics like media relations, direct mail and phone banking – it doesn’t end there. Just like in today’s political campaigns, voters are not just being influenced by what they read in the papers and see on TV, but they’re also influenced by what their friends share, tweet and like across social media channels. Years ago, digital communications tactics became a core component of political campaigns and today the same thing is happening for shareholder activism campaigns.

Across the most high-profile proxy fights this past year, we’ve seen activists and targets both upping their game with integrated communications programs that combine traditional, digital and social tactics to reach individual holders across the country. 

Based on the campaigns catching everyone’s attention these past few months, here are a few of the digital tactics we’ve seen leveraged most often in efforts to reach retail holders in proxy fights:

  • Campaign Microsites: Step one for taking a proxy fight digital is to build a campaign microsite that serves as a hub for all campaign collateral and a place to direct your retail audience. In the recent fight between Trian Partners’ Peltz and P&G, both sides created their own unique campaign microsites - and respectively. However, P&G wisely went beyond the standard mix of video messages, FAQs and white papers to incorporate instructions for voting online into their site, taking shareholders step by step through how to ‘Vote Blue’ and support P&G with just a few clicks.
  • Social Media: Because small shareholders often get their news straight from social media, these platforms must be prioritized just like top-tier media outlets are for the institutional audience. P&G, for example, harnessed its existing social profiles and follower base to share messages about its board nominees through catchy copy and attractive infographics. Like many activists, Pershing Square CEO Bill Ackman’s ‘ADP Ascending’ campaign also created dedicated Facebook and Twitter pages to share content that encourages the audience to ‘#VoteGOLD’ in favor of Pershing Square’s nominees.
  • Paid Targeting: Microsites and social content are great, but how do you ensure your retail audience is actually seeing them? That’s where paid targeting comes in. Whether it’s LinkedIn or Facebook, Google Search or The Wall Street Journal, promoted content can ensure your key messages, microsite and social media posts are seen by the right audience. In a proxy fight, paid, micro-targeting can be especially effective when you focus on geolocation – for instance, P&G could use micro-targeting on Twitter to ensure its posts are promoted specifically to users in Ohio, where the company is headquartered, and many of its individual holders are located.

From catchy hashtags and animated infographics, to CEO video messages and webcast Q&As – the list of digital tactics being baked into shareholder activism (and defense) campaigns is growing annually. As activists set their sights – and budgets – higher each proxy season, don’t expect the value of winning the support of individual investors to diminish in proxy fights any time soon.

So what’s the next test for activists trying to win the support of Main Street investors in a proxy fight? Tomorrow, shareholders of Automatic Data Processing Inc, where retail holders own 28% of the shares, will vote on activist CEO, Bill Ackman’s slate of nominees for the company’s board.

For more information about Prosek’s Special Situations offering, please contact Brian Schaffer at

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