Mon, Apr 10, 2017 page14

• Shareholder meetings go virtual in US

  IRATE INVESTORS: Companies are defending the practice for its accessibility and efficiency, while groups are accusing firms of hiding from shareholder accountability

  • AFP, NEW YORK
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  Big US corporations have identified a new strategy for managing irate investors at annual shareholder meetings: going virtual.

  This year, about 250 companies are expected to convene their yearly investor tete-a-tete via audio or video, up from 155 last year and just 26 in 2012, according to investors communications firm Broadridge.

  The set of companies forgoing face-to-face encounters includes No. 2 US automaker Ford Motor Co and energy giants ConocoPhillips Co and Duke Energy Corp.

  “We take very seriously the trust that our shareholders place in our leadership team,” Ford executive chairman Bill Ford said. “The virtual nature of this year’s meeting will enable us to increase shareholder accessibility, while improving efficiency and reducing costs.”

  Duke Energy also defended the practice, saying the format would permit chief executive Lynn Good “to answer more shareholder questions, either during the meeting or afterward through a Web posting,” according to a press release.

  However, not everyone is persuaded of the nobility of intent.

  “What’s really going on is that corporations are trying to hide — from shareholders, from protesters, from anyone trying to hold them accountable,” said Marni Halasa, founder of protest consulting firm Revolution is Sexy, who has previously criticized large banks.

  “We do not believe it is in the company’s interest to insulate itself from the interested public,” Duke shareholder Danielle Fugere of the non-governmental organization As You Sow said.

  The group has proposed a shareholder resolution to require the company to report on the public health impacts of its use of coal.

  New York City Comptroller Scott Stringer, who oversees investments under the city’s US$170 billion public pension system, has declared war on virtual meetings, sending a letter to almost 20 companies demanding they go the traditional way.

  “It’s one of the great markers of American enterprise — whether you own one share or 1 million, you can speak at a company’s annual meeting,” Stringer said. “Except now, in this interconnected world, companies are using technological tools to whittle away at investors’ rights and hide from accountability.”

  However, the companies rebut this point, with Ford saying: “Any pertinent questions that cannot be answered during the meeting, due to time constraints, will be answered and posted online.”

  Virtual meetings became possible following legal changes in a number of US states, including Delaware, where many companies are based.

  The annual events are not usually a major occasion for the biggest shareholders, who are typically in an ongoing dialogue with corporations.

  However, the annual meeting has traditionally offered a unique forum to the individual investor who lack the clout of large institutional investors.

  By going virtual, big companies could avoid criticism over shareholder pay, their environmental performance or any number of controversial matters.

  Calpers, which oversees pension and health benefits for about 1.6 million people in California, joined smaller shareholders in decrying the trend.

  Calpers backs physical meetings that are accessible remotely by investors via technology.

  Some companies, like Microsoft Corp, have employed this hybrid style.

  “Companies should hold shareowner meetings by remote communication [so-called ‘virtual’ meetings] only as a supplement to traditional in-person shareowner meetings, not as a substitute,” Calpers said, adding that the technology “should facilitate the opportunity for remote attendees to participate in the meeting to the same degree as in-person attendees.”
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