“Vote early, vote often,” was a cynical dictum for old-time, big-city machine politics. Unfortunately, according to a recent release from Boston Common Asset Management (BCAM), modern proxy voting is also subject to shenanigans.

A recent “say on pay” proposal at Waddell & Reed Financial received majority support, according to BCAM, but the company reported to the SEC that the proposal only received 48.5% of the vote. “This raises questions about the integrity of the proxy voting process, and the lengths a company will go to close out shareholder input,” BCAM’s Dawn Wolfe wrote to the Social Investment Forum (SIF) listserv.

Proxy reform is a SIF priority, as many investors believe that independent shareowners are not well-served by the status quo.

BCAM explains this particular case:

“On April 8th, Waddell & Reed reported at its annual meeting that 50.6% of shareowners voted in favor of the say-on-pay proposal. This significant level of support was garnered despite a personal plea by the CEO in the form of a letter filed alongside the proxy statement urging investors to vote against it. …

“In the intervening months between the stockholder meeting and its quarterly filing, Waddell & Reed Financial continued its active opposition to say-on-pay, culminating in a June 12th argument to the Delaware court that it should be allowed to retroactively count approximately 3.2 million additional votes, more than 2 months after the close of the polls. …

“The Court of the Chancery of the State of Delaware granted Waddell & Reed’s petition to reopen the polls and count the specific block of votes identified by its proxy solicitor as omitted on June 12th. The majority of those votes were cast against the proposal, according to Waddell & Reed.” [Emphasis added.]

Ms. Wolfe believes that the proxy solicitor’s efforts amount to “special treatment” for a block of votes that happened to support management’s position.

“It’s obvious the company feels quite strongly that being able to record a marginally lower level of support than they announced at the annual meeting is somehow significant,” she said. “It is significant to discussions of proxy voting integrity, but Waddell is missing the big picture of what is significant for its shareowners.”

For more on this issue, see SIF’s “Comment Letter to the SEC on Proxy Access”. Also, SIF’s Peter DeSimone provided their listserv with a link to a proposed SEC rule that seeks to “address issues that have arisen in the proxy solicitation process.”