Quorum Reduction Item to be on Next Proxy Ballot for Shee Atiká’s Annual Meeting 2024
When Shee Atiká was founded under ANCSA in 1974, each shareholder was awarded 100 shares for a total of 185,200 shares. Since 1974, our shareholders have gifted and passed down shares to family members, spouses, and their descendants. This has increased the total number of shareholders from 1,852 to approximately 3,377 Class A Shareholders over the last 50 years. Today, a Shee Atiká shareholder holds an average of 53 shares. Many shareholders hold less than 25 shares. Having more shareholders who hold fewer shares means more people have to vote in order to reach the same number of shares voted to reach quorum.
What is a Quorum?
A quorum is the minimum number of shares that must participate so that a shareholder annual meeting is legal and compliant. For Shee Atiká, the minimum number of shares is 50% + 1 of voting shares. Currently, this comes to about 90,000 shares that must be voted in order to reach quorum. As the number of shares have been distributed among more shareholders, the ability to meet our quorum requirement has been more difficult to achieve. To ensure that we are able to hold compliant annual meetings for generations to come, the Shee Atiká Board of Directors is proposing that the requirement be reduced from 50% + 1 of voting shares to 33.3%.
ANCSA Rule for Quorum Changes
In 2015, the Alaska State Legislature (under HB 149) allowed Alaska Native Corporations to amend their articles of incorporation to reduce quorum requirements for a meeting of shareholders to one-third of the outstanding shares entitled to vote at a meeting.
Why is the Board of Directors Proposing the Change in Quorum Requirement?
The Board of Directors sees now as the time to pass the quorum reduction requirement looking into Shee Atiká’s future. As the number of shares held by a shareholder decreases with time, the ability to reach a quorum to have a compliant annual meeting also decreases with time. A failed annual meeting can result in significant costs for re-scheduling, staff time, and wasted expenses, which can be anywhere from $25,000 to $50,000. Your Board wants to be proactive to ensure future successful annual meetings and satisfactory quorums for years to come.
Next steps for Shareholders
This year, in addition to voting for the three candidates to serve on the Shee Atiká Board of Directors, shareholders will also be asked to vote on quorum reduction. First, we must achieve quorum by having 50%+1 share vote at the annual meeting either in-person or by proxy. Then, two-thirds of those voting shares must vote “yes” for the quorum reduction proposal to pass.
What Would be the New Proposed Shee Atiká Quorum Requirement?
The proposed new quorum requirement would be lowered from 50%+1 to 33.3% of total shares (from 90,000 to 61,672 shares).
Will Reducing the Quorum Requirement Also Reduce the Shareholders Ability to Vote?
No. Shee Atiká will still strive to meet 50%+1 target so that we have a majority of shareholders voting on any matter. We would love it if ALL shareholders voted, but that is just not the case. The Quorum Reduction will just be another tool in our toolbox that we can use, if ever necessary.
Have Any Other Alaska Native Corporations Reduced Their Quorum Requirement?
Yes, other Alaska Native Corporations whose shareholders have voted to reduce their quorums include Koniag, Bering Straits Native Corporation, Ahtna Incorporated, Pauk-Vik Incorporated Limited, and Natives of Kodiak.
Please look out for future communications about this topic in your email, our Facebook page, and your mail box to inform yourself on this extremely important topic that will be on the annual meeting proxy for 2024.
If you have any questions please feel free to reach out to us at info@sheeatika.com or call 907-747-3534.