The United States Postal Service (USPS) has been periodically increasing the price of First-Class Mail, reflecting ongoing changes in operational costs and other factors. Additionally, delivery times for First-Class Mail have been extended from the previous one-to-three days to a broader range of one-to-five days.
The impact of these changes can be underestimated in an era dominated by electronic communication. However, traditional mail remains a crucial channel for shareholder communications and is protected by regulation.
Here is what the changes mean for shareholders and for your business, plus two things 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 is 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. However, the collective cost increase could be significant for issuers that have many shareholders or a higher proportion opting for full set delivery.
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.
Two things you can do to avoid added costs and delays
- Streamline your proxy mailings.
- 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.
- Transition more shareholders to digital communications.
- Shareholders have the right to receive proxy materials by mail, but most will opt for digital communications when that is offered.
- BetaNXT was built for the transition to digital.
- BetaNXT uses an omni-channel communications strategy that makes it simple and cost-effective to meet shareholders where they are and in their preferred communication channel.
- Invite shareholders to sign up for digital communications—include a message for electronic consent in future mailings.
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