New law is necessary to allow the electronic distribution option of proxy statements and other shareholder information that, under current laws, must be sent through the postal service. These administrative costs can amount to a few hundred thousand dollars for a small or mid-sized company and millions of dollars for a large corporation.
Practically speaking, most large corporations like EMC would probably just add an internet dimension to their annual meetings, but small and mid-sized companies would benefit the most from the reduction in administrative expenses since they probably won't be in a position to support both formats.
The view that the bill would take away the annual meeting from shareholders or somehow make corporations less accountable to their shareholders is nonsensical. EMC's analyst day, for example, used to be inaccessible to individual investors until EMC started opening it up during the last few years by making webcasts and summaries available over the internet. The annual meeting can only benefit from similar treatment.
The sophistry is amusing, though.
Mass. May Go Online for Meetings
By STEVE LeBLANC, Associated Press Writer
BOSTON (AP) - Shareholders who don't have the time or money to travel to annual company meetings could attend the meeting on the World Wide Web instead under a bill being weighed by state lawmakers.
Supporters say the bill would make Massachusetts only the second state in the nation to allow publicly traded companies to hold shareholder meetings online.
Activists fear it would let company executives dodge embarrassing questions and duck face-to-face confrontations with shareholders.
``The worst day in a CEO's life is their annual meeting,'' said Bruce Marks, head of Boston-based Neighborhood Assistance Corp. of America. ``They don't want to go eye-to-eye with anyone that would question their decisions.''
Marks said he is not be opposed to broadcasting live meetings on the Web, but the proposal would allow companies to abandon traditional meetings altogether.
Under the law, shareholders could enter a secure Web site at a predetermined time to listen to a CEO's address, vote on proxy statements, make motions and take part in question and answer sessions.
The bill, patterned after a Delaware law, would also allow companies to e-mail proxy statements and other routine information to shareholders. The current law mandates the materials be sent through the U.S. Mail.
Bill backers say it would make the meetings more democratic.
``Webcasting dramatically expands the number of people who can participate in these meetings,'' said the bill's sponsor, state Rep. David Magnani, D-Framingham.
The measure also has the backing of the business community.
Massachusetts-based data storage giant EMC Corp. still holds traditional shareholder meetings, but would consider going online.
Online meetings would be especially helpful to companies like EMC, with millions of shareholders all over the world, company spokesman Mark Fredrickson said.
About 2,000 shareholders attended the company's last annual meeting. That many people make it difficult to hear the concerns of every shareholder, Fredrickson said.
``Using the Web, shareholders would be able to submit questions. If they couldn't be answered during the live (Webcast), they could be answered later,'' he said.
Stephanie Haug, an associate portfolio manager at Boston-based Walden Asset Management, attended the EMC meeting to ask about the company's record on hiring minorities and women.
``When we showed up ... they had eliminated microphones and they were not accepting questions from the floor,'' Haug said.
Fredrickson said microphones were removed because of the sheer size of the meeting, but Haug fears that allowing ``virtual'' shareholder meetings would give managers an excuse to avoid pointed questions.
Amy Domini, head of Domini Social Investments, said a Webcast would undercut the voices of those who want to use their investments to promote social causes. Her company tries to influence corporate policy through investments.
``The corporations must be held accountable at least to their owners, if not to the public,'' she said.
The bill has passed the Massachusetts House and was scheduled to come up for a vote in the Senate Thursday. That vote was postponed.
There were no objections to the bill at public hearing earlier this year.
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