When it’s time for the annual meeting and things might get ugly, there’s no place like the road.
Marshall & Illsley Corp., a 164-year-old Wisconsin bank, usually meets with shareholders each April in its hometown of Milwaukee. But that was before the bagpipe-playing firefighters and marching teachers descended on its branches by the thousands earlier this year to protest contributions from executives to Gov. Scott Walker, who signed a contentious collective-bargaining law. And it was before the board decided to sell the bank to a Canadian company, a deal that includes $65 million in severance for those same executives.
M&I postponed its regular annual meeting and decamped for New York, 900 miles away, for a hasty special meeting last week. It would be the bank’s last shareholder meeting — and it lasted seven minutes. Attendees say executives promised to take questions at the end but never did — exiting quickly through a back door after holding a vote to approve the acquisition by BMO Finance Group, the parent of the Bank of Montreal.
“How can shareholders cast an informed vote if the executives acting on their behalf fail to answer basic questions?” says Daniel Pedrotty, director of the office of investment for the AFL-CIO, which has some members with retirement money invested in M&I through pension funds.
Executives of publicly traded companies are required to face their investors once a year at annual meetings, typically in the spring. These meetings allow shareholders — such as investing clubs made up of grandmothers and large pension funds — to see and question the chief executive and other top executives. For small shareholders, it’s probably the only chance to get face time with a company’s leaders.
While moving a meeting isn’t a new phenomenon, these annual events are most often held in the city where a company is based or in Delaware, where many of them are incorporated. Sometimes, a company might hold its annual shareholder confab in a location where it has a strong business presence, a significant number of employees or a new partner.
But critics say going on the road also is one way companies under fire can hide from angry investors and avoid confrontations with shareholders and protesters. In many cases, the strategy has worked, with fewer people making the trek to attend far-flung meetings.
