NEW YORK CITY: Citigroup Inc’s Dean Little and Jonathan Smalley learned the proxy voting process the hard way: in the mailroom.
The two spent years inside Citigroup’s custody business managing various ways shareholders cast votes for an annual meeting - including by fax and old-fashioned mail.
Fed up with a process that’s often manual and fraught with inefficiency, they came up with a digital platform - now known as Proxymity - allowing shareholders to vote in real time.
“It’s personally quite pleasing to go from the person that used to open the post that these proxy cards came in, ” to the founder of a company that’s becoming an important part of the corporate and financial ecosystem, Smalley said. “That’s a pleasing personal journey.”
Proxymity said yesterday it would spin off into its own entity based in London. The firm raised US$20.5mil from eight investors: Bank of New York Mellon Corp, Citigroup, Deutsche Boerse AG’s Clearstream, Computershare Ltd, Deutsche Bank AG, HSBC Holdings Plc, JPMorgan Chase & Co, and State Street Corp.
“It’s one thing to develop clever technology, ” said Chris Cox, head of equities and securities services for Europe, the Middle East and Africa at Citigroup.
“But the thing that drives investor benefit is industry adoption.
“The sheer fact that these guys have managed to secure backing from pretty much all of the leading custodians is really strong validation of what they built.”
Little will be chief executive officer of the new firm as Smalley becomes chief operating officer.
Proxymity will have a commercial team in London and research and development staff in Tel Aviv.
Proxymity has already supported 3,000 shareholder meetings. Little said he expects the firm’s technology to resonate with companies during the coronavirus pandemic as annual meetings become virtual affairs.
“Digitisation of this service and innovating this was needed before the unfortunate events around Covid-19, ” Little said. “But Covid-19 has brought this into the centre of everyone’s foresights.”
Little and Smalley came up with their idea in a Citigroup innovation program, then improved the technology using the bank’s network of innovation labs and one of its incubation programmes.— Bloomberg
“We hope to have more Proxymitys, ” said Emily Turner, head of innovation and business development for Citigroup’s institutional clients group. “These are two individuals -- Dean and Jon -- who have over 20 years experience in the space and a deep, deep understanding of the problem. And they’ve been able to turn that into real value.”