WEB traffic statistics compiled by Google show that investors are spending less than 5 minutes viewing annual meeting materials hosted by large vendors – and younger investors are almost entirely ignoring the documents.
The statistics, which aggregate traffic to hundreds of online annual reports and proxy statements hosted by large vendors such as Thomson Reuters, Broadridge Financial Solutions and Computershare, suggest that companies’ disclosure documents are failing to hold the interest of web users, particularly younger users between the ages of 18 and 34 who have grown up with the web.
Further evidence of a lack of investor interest in online annual reporting information is provided by statistics compiled using PostRank. They show little or no interest in company annual reports among users of social networking websites, as measured by the number of times they share links to online annual reports.
These findings echo statistics compiled by Broadridge Financial Solutions (PDF 1.3MB) in 2009 which found that fewer than 0.5% of 21.2 million investors who received a notice about the availability of proxy materials chose to view the information online.
What the data show
When most US companies publish their annual reports and proxy statements online they typically direct investors to the domains of large vendors who have been contracted to convert and host the documents. Since each large vendor typically hosts documents for hundreds of companies, traffic to the domains hosting the annual reports and proxy statements can be tracked with reasonably accuracy using public sources of information.
In this case, we used Google’s Ad Planner service to analyze traffic to online annual report hosts during March and April this year. Ad Planner combines information from a variety of sources, including Google Toolbar data from users who have opted in to enhanced features, publisher opt-in anonymous Google Analytics data, opt-in external consumer panel data, and other third-party market research.
According to Ad Planner’s data, investors spend the least time on annual reports and proxy statements converted by Thomson Reuters and BNY Mellon Shareholder Services, both of which use document conversion technology provided by Mobular Technologies. During March, investors spent just 3:20 minutes on these reports, and 4:00 minutes in April. The data show that Mobular reports are not used by users under the age of 34. Examples of these reports include Bank of America and Sirius Satellite.
Proxy materials hosted by Computershare are located on the domain Envisionreports.com. An example is Kodak’s proxy materials. According to Ad Planner data, users spent 4:20 minutes on Computershare’s reports in March and 4:30 minutes in April. These reports also were not used by the 18 to 34 demographic.
Broadridge, which is by far the largest host of proxy materials, uses the subdomain materials.proxyvote.com to host most of its clients’ annual reports and proxy statements. Visitors to its materials spent 4:50 minutes per visit in both March and April. The data show that only 4% of visitors fall into the 24 – 34 demographic. An example is Garmin’s online annual report.
Looking at the level of PostRank social media engagement around all of the large vendors’ domains, few people have been sharing links to annual reports and proxy statements over the past month.
Thomson Reuters clients scored just 56 engagement points in total, while all Broadridge clients scored just 7 points. Computershare’s clients scored 0. By comparison, IRWebReport.com scored 3,353 engagement points over the past 30 days.
Poor usability and relevance
That the few shareholders who actually bother to access only shareholder meeting materials are spending less than 5 minutes reading online proxy materials will likely trouble regulators responsible for ensuring that investors receive the information they need to make informed investment and voting decisions.
It raises questions about whether current corporate web publishing standards, coupled with document length and complexity, are discouraging investors from informing themselves about their investments.
Although US and other regulators do require that companies post their annual meeting materials in usable formats, the requirements are vague and ambiguous. Consequently, companies are posting their proxy materials online in PDF or in the large vendors’ conversion formats that fail to support the most basic usability needs of web users.
However, even when companies do make an effort to provide their annual reports in engaging formats, there is little evidence that investors are actually using them. This suggests that the problem may be as simple as the information being of little interest to investors since it is typically stale by the time it is published.