Online voting scheme hits Vanguard barrier
MoxyVote.com of West Chester asks SEC to push online voting for corporate directors, policy questions
Keith Layman, a teacher at Garnet Valley High School, hasn't had time to sort the annual corporate proxy statements that clog his mailbox each year. "They used to build up in my recycle bin," he told me. "Who reads proxy ballots? You don't have time to do the research."
Layman seeks guidance from "an advocate I trust." He says he's found it at www.moxyvote.com, the West Chester Web site started last year by Rich and Kevin Gates, founder-owners of $1.2 billion asset investment manager TFS Capital LLC, who Layman met when they all attended Conestoga High School in Berwyn in the late 1980s.
Moxy allows shareholders to vote their proxy statements online - and to review recommendations from dozens of advocacy groups. The firm employs seven and plans to hire three more software developers by the end of the year.
"When it started, the choices seemed a little left," Layman told me. "But now they run the gamut" of religious organizations (Catholic, Unitarian), private investment firms ("socially responsible funds," and others run by Wall Street veterans), labor activists, animal-cruelty critics, and the conservative Free Enterprise Project, which seeks "to promote the virtues of capitalism and defend our free enterprise system from unwarranted government and social activist interference that hampers innovation and economic growth."
Layman's brokers at RBC Dain Rauscher gave him "no problem linking" his Moxy votes to his shares. TD Ameritrade, eTrade and many other brokerages are similarly cooperative, Moxy co-founder Jeff Marshall told me.
But Malvern-based Vanguard Group's brokerage won't cooperate, despite an endorsement from retired Vanguard founder John Bogle. "No comment," said Vanguard spokeswoman Linda Wolohan when I asked.
"Such resistance, unsupported by significant objections... is an impediment to the developement of a user-friendly" online corporate voting system, Moxy prinicpal Larry S. Eiben told Securities and Exchange Commission secretary Elizabeth M. Murphy in a letter last week, as the SEC considers online-voting rules.
Eiben added that reluctant brokers like Vanguard "need public acknowledgement from regulators that a Web-based voting platform," subject to "some reasonable set of requirements," is as good as hand-mailed postcards or other ways of voting for corporate directors and policy questions, as the SEC seeks to boost shareholder participation in corporate democracy.
