Tuesday, September 28, 2010

I have followed the debate on electronic annual meetings (or e-meetings) with some care, but hey, it's my job. Apologies if I offend any fellow activist investors (or sticklers for formal English) with "nerd", but I truly thought only aficionados cared for the nature and conduct of e-meetings.

But, when Gretchen Morgenson features the subject in her column on the front page of the Sunday New York Times Business Section this past weekend, then maybe other smart investors might find this interesting, or even important.

Here I'll merely reference her meaty tale of how Symantec Corporation sidestepped nosy shareholder questions by conducting their annual meeting like the worst perfunctory quarterly conference call. At the meeting last week, listeners (audio only, no video feed) didn't even know which directors, the ones on whom shareholders had just voted, even attended the meeting. All-in-all, a very unsatisfactory application of a cutting-edge idea.

I thought this subject interests only the hard-core among us activist investors. We follow the subject through a useful resource at The Shareholder Forum. The site moderates a discussion about how companies should conduct e-meetings, proposes and debates guidelines and standards for e-meetings, and cites good and bad examples of recent e-meetings.

What does this mean for smart investors?
But something larger is going on. Let's set aside, for the moment, how well or poorly one or another company conducts an e-meeting. The rise of e-meetings does signal an important emerging trend, the possible end of proxy solicitation. In principal, shareholders can now "attend" a meeting electronically, and vote on the agenda directly No more "appointing" someone to serve as the shareholder's proxy. The idea (and arcane, convoluted, confusing, and costly process) of proxy voting basically goes away.

Of course, proponents of board nominees and meeting resolutions still need to promote their candidates and issues, as we note in our discussion of the new proxy access rules. Still, that's a good bit different (and simpler and cheaper) than developing and distributing proxy cards and materials.

Looks like we should continue to follow this.

MRL