A Proxy on Proxy Services

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New York – An article in the Wall Street Journal this morning highlights the potential for Riskmetrics group to gain from recent policy actions. The article indicates that “That job just got a lot bigger, with a raft of shareholder proposals to limit pay and the new federal law requiring 400 companies receiving bailout money to give shareholders an advisory vote on executives’ compensation.”

Riskmetrics started as a JP Morgan initiative to measure market risk of trading books. Since then is has grown substantially, now covering credit risk, Forensic accounting analysis (CFRA) and shareholder services (Institutional Shareholder services). We agree that proxy services will become a major more integral for investors to deal with shareholder votes of their investments.

A brief frisk of our database indicates that 13 research providers (the list would grow with a more detailed search) have some sort of direct information on proxy votes, either as data, as analysis or as an actual service to investors. This short list is gleaned from a larger list of ESG providers (43) and Corporate Governance providers (21) and Insider trading firms (16)-some overlap may exist.

Some firms which cover governance, will assess the proxy records of firms, other firms have only the data, while ISS and several other firms provide actual proxy services to clients.  With the renewed interest in proxy services and the fact that bailout firms will have to allow shareholders to vote on executive compensation, there will be increasing interest in research providers that provide data, analysis and/or proxy services.

Below we tabulate the distribution of these providers:

Service Level

Number of Research Providers

Data

1

Data and Analysis

6

Data, Analysis and Voting Services

6

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