Sorry, Gus, I'm not buying it.
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.
Fine, then let the new law address that issue. The law as it is proposed contains a lot more.
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.
It is not nonsensical to think that a corporation might attempt to disenfranchise its shareholders. The proposed law would allow this to happen. Even today, many corporations try a variety of methods in an attempt to prevent shareholders from being heard. This will make things easier for them.
And, again, as I said before, there is nothing to prevent anyone from webcasting the annual meeting today. No law is necessary. You're fighting a straw man with that point.
From the article that you cite:
``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.
The problem is that when the question is something that management does not want to answer, they can easily ignore a question on the Internet. Then they cite Reg FD and don't answer the question ever. Again, even now shareholders get ignored at the annual meeting. A 'Net-only meeting would allow management to much more easily ignore its shareholders. At least with an in-person meeting, a company has some degree of pressure to allow people to speak.
Again, I'm all for putting annual meetings on the Internet. Anyone who wants to do that now, can. As far as the cost of an annual meeting is concerned, if a company cannot bear that cost, they shouldn't invite outsiders to own their company. |
