Cast Those Proxy Votes

If you own shares of stock in individual companies (as opposed to through mutual funds), you've probably received proxy voting materials — ballots that arrive once a year along with your annual report. Many people wonder whether there's any point to voting, since most of us own so few shares, out of a typical company's millions (or billions) of shares.

Since institutional investors such as pension or mutual funds often own a majority of shares outstanding, our small votes can be moot. Still, sometimes they do make a difference. Shareholders have pressured McDonald's, for example, to look into reducing pesticides used on the potatoes it buys. They've also gotten many companies, such as Home Depot, to require two-thirds of their boards to approve executive compensation plans. On shareholder-raised issues, it's good to at least make your preference known, so read the materials and vote.

Here's some guidance to help you be a more involved shareholder:

• If you don't understand the issue(s) at hand, seek guidance. Know that each company will typically explain how management wants you to vote, and it will also usually offer the shareholder proposal's position, too. At sites such as ProxyDemocracy. org, you'll find information on issues being voted on at companies.

• If you don't vote or if you leave your proxy items unmarked, your ballot will often automatically be counted as in agreement with management. (Some shareholder activists are working to change this.) If you're unsure of an issue, it's better to abstain, which will withhold your vote.

• If you're invested in a mutual fund, you can find out how the fund's proxies will be voted, either from the fund company itself or at ProxyDemocracy.org. Fund companies often offer voting guidelines to help you understand what the fund's positions are on various issues. If you're not offered such information, make a little noise and ask for it.

You can learn much more at sites such as www.socialinvest.org/projects/advocacy/ proxyvoting.cfm, www.sec.gov/answers/ proxy.htm and www.corpwatch.org.