Federal Register - December 1, 2021
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Fuente: Federal Register
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Federal Register / Vol. 86, No. 228 / Wednesday, December 1, 2021 / Rules and Regulations
Moreover, we only consider shares over which these institutions have voting authority in contested director elections.
We do not have comparable data for other institutional shareholders or for retail shareholders.
We first consider the potential incentive to arrange split-ticket vote based on voting influence, as measured by fraction ownership of voting shares.
Figure 1 shows the average percentage, across registrants, of the total outstanding shares held by Form 13F
filers that each meet a given minimum threshold of ownership of voting shares.
The average percentage of the total outstanding shares is calculated across all registrants within different size categories. As in previous analyses, registrant size is approximated by reference to the S&P index. The data
suggest that there is currently a substantial portion of outstanding shares for which institutional holders may have enough individual voting influence to incentivize them to arrange split-ticket voting if preferred. For example, if we consider average total ownership by Form 13F filers that are larger block holders individually owning 5% or more of shares and therefore are likely to be pivotal voters, the average percentage of the total outstanding shares held by these institutions is approximately 14% for non-S&P 1500 registrants, 21% for S&P
600 registrants, 16% for S&P 400
registrants, and 11% for S&P 500
registrants. The large difference in ownership between S&P 600 and nonS&P 1500 registrants, despite both groups being relatively small registrants,
is due to a smaller number of institutions holding stock of any amount in the non-S&P 1500
registrants. Figure 1 also shows the average total ownership of shares held by Form 13F filers meeting lower minimum thresholds of ownership of voting shares 0.5%, 1.0%, and 2.5%
respectively, in case ownership less than 5% may provide sufficient voting influence to incentivize an institution to arrange split-ticket voting. Because we are only considering ownership by institutions required to report their holdings on Form 13F, there may be additional owners with incentives to arrange split-ticket voting for any given minimum ownership threshold that are not captured in the data presented in Figure 1.
Figure 1: Average percentage of outstanding shares held by institutions Form 13F
filers with different levels of minimum individual vote ownership, across registrants in different size categories.237
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Non-S&P 1500
S&P 600 small cap
S&P 400 mid cap
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S&P 500 large cap
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237 The estimates in the figure are based on staff analysis of Form 13F filings related to potentially affected registrants from the first quarter of 2020 in the Thomson Reuters Form 13F database, which is the most recent time period we had access to for this analysis. The analysis reflects only holdings for which institutions have voting authority in contested director elections.
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Vote ownership of 2.5% or more
Even a large voting stake in a company may not currently be enough to incentivize a shareholder to incur the
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Vote ownership of 1.0% or more
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costs of attending the annual meeting to vote a split ticket if the investment is low in dollar terms. Therefore we also consider the combined voting power by institutions filing Form 13F that individually have a substantial dollar investment in a registrant. In particular, Figure 2 shows the average percentage, across registrants, of the total outstanding shares held by Form 13F
filers that each meet a given threshold
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Vote ownership of 5.0% or more
of minimum dollar stake in the registrant. For example, for Form 13F
filers that hold stock worth $1 million or more in a given registrant, the average percentage of the total outstanding shares held by these institutions is above 50% for all registrants belonging to one of the S&P 1500 component indexes. By contrast, the corresponding average percentage of outstanding shares held among non-S&P 1500
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Vote ownership of 0.5% or more
