I was shocked when I noticed that I could not vote on the Unilever moving abroad because I hold the shares electronically.
How can I ensure that I can exercise my voting rights the next time that one of the companies I hold shares in wants to do something like that?
Your vote: how do you ensure that you gain control over the company of a company that you own, electronically, rather than on paper?
Tanya Jefferies, from This is Money, replies: Many of Unilever's individual shareholders were angry at the difficulties they faced in voting on the company's plan to move its headquarters from London to Rotterdam in the Netherlands.
Eventually, the proposal was deleted before it was voted because of opposition from several large shareholders of the consumer giant.
But ordinary investors who & # 39; electronically & # 39; owning shares – on a nominee account managed by their broker or online platform, instead of old-fashioned paper certificates – are not happy that this would not have done them justice if the voting had continued.
Top stockbroker The Share Center even filed a protest with company secretary Greg Clark about the prospect that some shareholders could be silenced.
The excitement about Unilever and its eventual ascent may prevent other companies from falling into the same trap when they hold their own high profile voices.
In the meantime, we have asked an expert from Equiniti, who offers registration services for shares to many listed companies, including top players in the FTSE 100 and FTSE 250, to explain how shareholders in a future situation like this can get a vote.
Equiniti is not the registrar for Unilever.
Mark Taylor: "Because of the drawback of paper certificates, the preferred method of holding shares is through a nominee & # 39;
Mark Taylor, chief customer officer at financial services provider Equiniti, replies: Firstly, it is useful to understand what it means when an investor says that he & # 39; electronic & # 39; keeps.
Most shares are now digitally stored in a so-called Nominee account.
In broad terms, this means that the name of a person does not appear in the company's share register.
Instead, the name of the nominee company, which holds the shares.
It is the job of the nominated company, usually a stockbroker or online platform, to keep your shares safe and to ensure that you receive the rights attached to your participation as if you were a shareholder appearing in a register.
The approach by the nominated company is quite common nowadays.
It is a more efficient way to hold shares and ensure that transactions can be settled, usually through a system called CREST.
Why do many people today today keep digital instead of on paper?
The alternative would be to hold paper certificates for a shareholder and to enter his name in the company's share register. This approach has a number of drawbacks.
Whenever the individual sells shares in that company, the appropriate level of share certificates must be submitted to cover the sale.
If the shareholder chooses to reinvest dividends, he also receives a share certificate each time. Some companies pay dividends each quarter, while others pay two or only once a year.
In the course of time, these share certificates increase and sometimes shareholders lose them. They can be replaced, but for a fee, which depends on the value of the shares held.
Normally there are administrative costs (the costs of including the original lost certificate, issuing a declaration of compensation and the production of a new certificate) and a co-signing fee (the costs of the insurance to protect the issuing institution against abuse of the original certificate).
As a guideline, the administration costs of Equiniti are £ 42, including VAT for shares worth £ 100 or more, and nothing for those who are worth less.
His co-signature costs range from £ 23.32 for shares worth £ 50 to £ 1,000, to £ 675.68 for shares from £ 75,000 to £ 100,000.
It costs nothing for shares with a value of less than £ 50.
For shares with a value of £ 100,000, the investor must contact Equiniti (or the appropriate registrar), as the costs depend on the value of the shares that exceed it.
The shareholder can obtain his own compensation co-signature from any market supplier.
Due to the disadvantage of paper certificates, the preferred method of holding shares these days is via a proxy.
You can exercise your voting rights and attend the AGMs in both cases, but because the use of a nominee means that you are not mentioned in the register of shares, the process is different.
How do you vote if you own shares electronically?
If a shareholder who uses a nominee contacts the nominated company, he must be able to vote and receive the annual report and accounts and attend an AGM.
However, the person must make this request. It is not automatic.
That is why the shareholder must submit the request every time there is a vote. It is a similar situation when they want to attend an AGM. They must make contact.
Some companies make a nominee account available to their individual shareholders. This is known as a company-sponsored nomination.
The CSN works by removing investors' names from the main register and preserving them together with other investors in the nominee business.
A separate register of underlying individual investors is kept behind the scenes by the authorized representative.
Investors will still enjoy the benefits of holding shares, retain the right to receive dividend payments and the company will usually provide financial information and arrange for you to attend and vote on the business attended to general meetings of the company.
In essence, a CSN is considered an extension of a share register and therefore business communications are automatically sent to someone who holds shares for a CSN.
If the company you are part of has a CSN, you can sign up to fill out a simple form.
There are no costs involved in transferring shares to a CSN. Once in the CSN, there are no ongoing management fees.
What happened in the Unilever case?
In the case of Unilever, many investors held their shares by name, but the company stated that the large brokers would only count as one shareholder, instead of counting the votes of each shareholder on the nominee account.
This is not something that happens regularly, and in the case of similar votes in the future, investors who want to have a say should understand how their shares are held in a specific company, please note the company's communication if they are held through a CSN and contact their nominee company if they are being held through a nominee account.