As the 2011 proxy season approaches, companies are focused on drafting their proxy statements and preparing for their annual meetings. With mandatory nonbinding say-on-pay votes on the ballot and continued focus by corporate governance activists on executive compensation, communication issues with investors, especially large stockholders, are taking on increased importance.

Recently, a group of institutional investors representing approximately $2.2 trillion in assets under management, led by Walden Asset Management, has asked that some companies host an annual conference call specifically for institutional investors to focus on corporate governance discussions in the proxy statement. [1] The call would be held after the publication of the company’s proxy statement and prior to the company’s annual meeting of stockholders. Each company that is approached by this group must consider this request in the context of its own situation; however, we offer some thoughts below on why companies may wish to resist this proposed new obligation. As a practical matter, such a conference call would be unlikely to provide investors with any useful information beyond the disclosures in the proxy statement; as a legal matter, any material, non-public information disclosed by the company must be provided to all stockholders, rather than to a select group of institutional investors.

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