In October, the United States Postal Service (USPS) increased the price and reduced the speed of its First-Class Mail service―from one to three days to one to five days.
The impact of these changes can be underestimated when so much of our communication is electronic, but mail continues to be a major channel for shareholder communications and is protected by regulation.
Here is what the changes mean for shareholders and for your business, and what you can do to mitigate the impact of higher costs and slower deliveries.
How will shareholders be affected?
Shareholders who receive full set delivery, with all materials sent by mail, are most obviously affected by the extended timeframe and could easily incur delays in receipt of mail.
How will your business be affected?
For most issuers, the biggest impact will be the increased amount of time needed to ensure that regulatory deadlines are met.
The SEC deadline for delivering proxy materials electronically, called notice and access delivery, is 40 days prior to the annual meeting date. Best practice for full set delivery mailings is 30 days, although issuers with non-routine proposals should consider earlier mailings to allow time for additional solicitations. In either case, shareholders may receive their proxy materials a little later than past years due to the mail delays.
Price increases are just a few cents per item: around 3¢ for a letter or 7¢ for a package of bound printed matter. However, the collective cost increase could be significant for issuers that have many shareholders or a higher proportion opting for full set delivery.
What can you do to avoid added costs and delays?
- Carefully review your proxy timeline with your proxy solutions provider to ensure that potential mail delays are taken into consideration.
- Plan ahead to avoid potential rush fees.
- Consider using a stratified mailing approach using First-Class Mail and Standard Mail where appropriate.
- Be proactive. Work with your transfer agent, proxy solutions provider and intermediaries to help increase electronic consents.
Why is USPS making these changes?
The USPS has cited financial shortfalls and challenges meeting performance standards. It says that using fewer airplanes and more trucks will allow it to move higher volumes of mail at a lower cost, at the same time as increasing the reliability of its service.
The changes are part of a 10-year plan that includes a host of upgrades to equipment and infrastructure, with further price increases to come. These are anticipated to take place twice annually, starting in 2023.
Choosing the right provider will help you improve the quality and efficiency of shareholder communications. Mediant is built for the transition to digital: our solutions have revolutionized how issuers, banks and brokers execute and manage their investor communications programs from start to finish. This includes our omni-channel communication strategy, which makes it easy and cost-effective to meet shareholders where they are and in their preferred communication channel.
Find out more about Mediant’s investor communications solutions.