NO SURPRISE last week when Thomson Financial reported on a survey of investor relations officers that found just 18% are actively trying to attract new retail investors.IR Magazine has more on the survey, but it basically says that the U.S. investor relations community considers retail investors irrelevant.
Well, there is another side to the story. And that’s the growing body of evidence that the American public feels the same way. They think big corporations with their overpaid CEOs, arrogant IR departments, and legions of bullshit-spouting PR and marketing people are irrelevant, too.
According to Broadridge Financial Services, participation by retail shareholders plummeted in recent proxy votes among companies using the SEC’s new notice-only delivery option for annual meeting materials.
Just 3.4% of retail shareholder accounts voted. That was actually the average. Turnout was even lower at some companies.
In November, the Pew Research Center reported some interesting findings in a study called Tracking the Traders. They wanted to find out how the American public was reacting to the sub-prime mortgage and credit crisis.
Bottom line? The issue wasn’t relevant to the vast majority of people. Only 7% of Americans say they regularly trade stocks and other investments. And fully 46% said they have no money in the stock market, directly or indirectly.
As Securities and Exchange Commission General Counsel Brian G. Cartwright mentioned in his recent speech on deretailization, companies which 50 years ago where 90% owned by retail investors my soon find themselves 90% owned by a handful of institutions.
But that’s what investor relations departments want. They told Thomson Financial they think retail investors are a waste of time. Irrelevant.
I’m not sure where this all leads to, but I wonder what it means for corporate America when the public stops seeing a connection between their personal aspirations and those of business.
Do they stop believing in the American Dream? Do they still have faith in capitalism and the concept of productive investment?
Sorry, forgot, it’s irrelevant to you.