“Dear Andy: Please write a column urging stockowners to pay attention to the proxy statement booklets they get this time of year, and then vote their shares accordingly. I know you once wrote that you just tossed the proxy statements (and I presume the proxy ballot). Please reconsider. There really are important things being proposed. As a matter of fact, you could sponsor resolutions yourself. All you need is $1000 of stock held for one year.” — Carl Olson, Chairman, Fund for Stockowner Rights
Thanks, Carl. Good point. But do you have any anecdotal evidence or otherwise of cases where it’s made a difference? With so few people voting (and most stock held by their pension fund), if a measure gets 3% or even 23%, does management really take note?
To which Carl persuasively replied:
“Dear Andy: Here is some good data for you. As you may know, the SEC is considering a proposed rule change to make it much harder for stockowners to propose items for votes at annual meetings. A massive battle is on. You can see it at the SEC web page www.sec.gov under the proposed rules, including hundreds of comments (including mine as chairman of Fund for Stockowners Rights). This is a quote from the SEC presentation:
Based on the information provided to us by IRRC [Investor Responsibility Research Center in Washington, D.C., which analyzes issues to advise stockowners how to vote], we understand that in the period January 1, 1997 to date [July], 19 proposals obtained shareholder approval out of a total of 234 submitted to shareholder votes. Nine were proposals to repeal classified boards. Nine sought redemption of companies’ shareholder rights plans. [Poison pills]. One focused on ‘golden parachute’ payments to executives. Even if a proposal does not obtain shareholder approval, however, it may nonetheless influence management, especially if it receives substantial shareholder support. A proposal may also influence management even if it is not put to a shareholder vote. We understand that in some instances management has made concessions to shareholders in return for the withdrawal of a proposal.
“In my own case, I proposed that Occidental Petroleum Corp. adopt a confidential voting policy. In 1991 it got 54,000,000 shares in favor; in 1992 it got 71,500,000, and in 1994 it got 111,400,000 (versus 93,000,000 against). The board finally adopted a watered-down one. The same thing happened at The LTV Corp. Oftentimes it takes a multi-year approach in order to build support. Another example is the Fleming Companies (food wholesaler). Another stockholder has been able to have passed proposals in both 1996 and 1997 to eliminate the poison pills.
“This coming season of annual meetings has a lot of exciting matters.
“1. At Occidental Petroleum and LTV, I have proposed that the stockowners should be told how much financial backing the auditors have for their opinions. You may have seen that the Big Six now have LLP after their names. This means that the individual partners are NOT liable for the misdeeds of the other partners. Thus, for the Big Six, security in the amount of $3 billion to $5 billion has been removed from the stockowners of an audited firm. We ought to know. This issue right now is up for an appeal to the full SEC.
“2. At AT&T, a permanent confidential voting policy.
“3. At Lucent, GM, Ford, and BellSouth, an anti-slave labor policy (not just sweatshop, but real forced labor, such as the massive ‘laogai’ system in China that Harry Wu is exposing). ”
OK, Carl. I’m not sure I’m against slave labor, but I’m no fan of poison pills. I’ll try to vote more often. Keep up the good work!
(This is a joke. I am against slave labor.)