Best proxy statement (small cap) CSG Systems International
CSG Systems International’s approach to its proxy statement is a great example of a company that views the document as an opportunity to communicate with its shareholders.
John Rea, vice president and head of investor relations, explains that since becoming CEO and president, Brian Shepherd has pushed for the company to up its game in terms of its proxy statement. Rea says Shepherd believes in producing a great document that tells investors what CSG is about. That’s clear from the start: pages one and two feature a photo of and letter from Shepherd. The letter outlines the company’s strategy, mission, culture and some of its work and successes from the preceding year while pointing to its aims for the future.
The proxy statement then helps shareholders get to know the board with details of its composition in terms of skills and experience, tenure, generation and gender and racial/ethnic identities. The document also includes explanations of the annual board evaluation process, board refreshment policies, what CSG looks for in director nominees and the duties and number of meetings held by board committees.
The document goes on to address environmental, social and human capital issues. For the latter, it provides details of the firm's culture and philosophy as well as figures explaining CSG’s workforce composition, including the percentage of women and people of ethnic/racial minorities who hold leadership positions.
Another significant component of CSG’s proxy statement is the compensation discussion & analysis section. This begins with a table of contents, followed by headshots of named executive officers, an executive summary and a detailed analysis. The proxy statement explains that around 79 percent of the votes cast backed CSG’s 2021 say-on-pay proposal, which the company viewed as ‘unacceptably low support’. As a result, CSG reassessed its compensation programs in 2021 and engaged with shareholders to understand their concerns and other issues that influenced their votes.
The proxy includes details both of the feedback it received and the steps it took to respond. CSG’s efforts – including the proxy statement – seem to have been a success: the say-on-pay vote increased to 94.7 percent in 2022.
