The Noisiest Shareholder Activist Takes a Break
|July 27, 2012||Posted by Jeffery J. Smith under News|
The Ms Quixote of the Corporate Jungle
What one woman gets away with is awe-inspiring. What more that needs to be done is, of course, somewhat daunting. Yet geonomists may save the day! This 2012 article is from the Associated Press , Jly 13.
by Christina Rexrode
Introducing herself as queen of the corporate jungle, Evelyn Y. Davis is the world’s most famous shareholder activist. She’s also the most outspoken, the most outrageous, the most intelligent, the most confident, the most charming.
For decades, Mrs. Davis has been buying stock in big companies for the primary reason, it seems, of attending their annual meetings and turning them into her personal stage.
Simultaneously brash and flirty, she heckles CEOs, remarks on their handsomeness, yells at other shareholders, and proclaims that she knows more than anyone else in the room.
This year there was something missing when Mrs. Davis didn’t show up at any company’s annual meeting. Not Bank of America. Not US Airways. Not Ford or Goldman Sachs or any of the dozens she usually attends.
Age has finally made her do what the most powerful CEOs in America couldn’t: Give it a rest. “I’m not so young anymore,” said Mrs. Davis, 82.
This is the first year she won’t publish “Highlights and Lowlights,” the newsletter in which since 1965 she has reported on company meetings and how she was treated at them, which reporters gave her the most coverage, and anything else on her mind. She peddles it for $600 a copy, minimum two copies, to the same CEOs she harangues.
While some investors are scared to confront powerful executives, she is anything but. She asks pointed questions about their business decisions, and sometimes tells them they should resign in shame.
She advocates for lower CEO pay, term limits for board members and more disclosure on companies’ political spending — issues dear to most shareholder advocates.
In 2005, Macy’s decided to make its board members stand for re-election every year instead of every three years. The company noted at the time that Mrs. Davis had been submitting a proposal asking for just that since 1988, and had won majority support from other shareholders in the most recent years.
Mrs. Davis interrupts everyone, sitting at the front and yelling out questions that often have nothing to do with the topic being discussed. She tells other speakers they don’t know what they’re talking about. She implies that the best-looking male CEOs are in love with her.
Last month, she watched on TV as Dimon testified to Congress about an unexpected trading loss at JPMorgan. She called him afterward to tell him how gorgeous he had looked.
If executives are exasperated by her theatrics, they have yet to put a muzzle on her. Her access to them is uncanny. She calls them directly and often, and she can be fierce when she doesn’t get what she wants.
At a meeting in 1970, she showed up in a bathing suit to make sure she wouldn’t get upstaged by Ralph Nader. (He didn’t show.) She wore hot pants to another meeting the next year, an ammunition bandolier to another.
Mrs. Davis was born to a wealthy family in Amsterdam in 1929, two months before the stock market crash pitched the U.S. into the Great Depression. She survived a concentration camp in Nazi-occupied Czechoslovakia. Mrs. Davis moved to the Baltimore area after World War II with her father and began investing in the 1950s.
She is short and speaks loudly — or just shouts — in a heavy Dutch accent. Her hair and makeup are always in place, her suits impeccable. In a biography filed with the Securities and Exchange Commission when she was a panelist for a roundtable there on shareholder issues, she described herself as “a four times Divorcee with NO children.”
The annual shareholder meeting is the one time of year when CEOs of public companies have to face their shareholders, answer their questions, and listen to their complaints. Mrs. Davis’ critics say she makes a mockery of them. They get frustrated that she’s the only shareholder allowed to break the rules, not waiting her turn to speak or respecting time limits. They find her annoying, even mean.
At meetings, some shareholders do jeer, others laugh, even applaud. To them, Mrs. Davis is a champion of shareholder rights.
JJS: Small shareholders — the people risking their savings — get little back from corporations. Most of the value of the stock goes to insiders who get information before others and can buy and sell before others. Most of corporate cash flow goes to management and directors, per capita. So the corporate jungle needs more Mrs. Davises, not fewer. And the main thing they should rail against, cited above, is political spending.
You think of a company and you think, oh, they make cars (GM) or deliver oil (Exxon) or retail household goods (Walmart) or make household appliances (GE) or sell computer programs (MicroSoft). You’d be right, but only partially right. The main thing that Big Business does is lobby, and lobby well. A vast majority of corporate profit does not come from delivering the goods (whatever the product may be) but from government.
Businesses rake in amazingly valuable favors from politicians. They get contracts and get paid whether they deliver the goods or not — weaponeers like GE get away with that. They get weak enforcement of the law — polluters like GM and Exxon benefit from that. They get subsidies, such as the bailout of GM. All of them get limited liability and even extra lenient limits when they need it, as when Congress held MicroSoft blameless in 1999, just in case the Y2K scare proved real. Plus, these favors expand market share and put competitors out of business.
The oldest favor business gets is society’s failure to recover its socially-generated value of land. American society spends trillions each year for sites and resources and most of that goes to oil companies and as mortgages to Wall Street. Even businesses not selling resources or financing the land beneath homes also benefit. Land speculation creates sprawl and sprawl unduly expands the market for cars, gifting GM, Ford, et al, and delivers customers to Big Boxes like Walmart. Sprawl also provides very little community and fewer relationships and constant household moving stresses marriage; a higher divorce rate means more households needing more appliances, helping GE. And Bill Gates might be the richest guy on the planet but he shelters his fortune by buying tens of thousands of acres of land, as do all the rich.
Rents — a society’s spending for the nature it uses, from locations to EM spectrum — is immense and now, while it is not recovered and shared, only serves to benefit one class, the owners of the major corporations who, engorged with rents, are too big and powerful to much be bothered by shareholder gadflies. So, while reformers should dog the obvious actions of corporations and demand responsible behavior, they should also examine the harder-to-see bigger picture and insist on public recovery and public sharing of the publicly-generated values of our institutions and of our natural world.
The move is a long time coming