At the TheShareholderActivist.com, we are determined to help level the playing field for the regular investor, providing the tools, tactics and techniques to facilitate your responsible shareholder activism.
I am very pleased to report that our subscribers are responding.
Earlier this month, I produced an easy-to-use checklist: FREE DOWNLOAD: Living with Rejection – Reasons Why Shareholder Proposals are Excluded.
Shareholder proposals are rarely successful. However, before your proposal can even be considered, there are many reasons why it can be “excluded” by management. This checklist is a basic summary of those exclusions.
As a result, I received several positive responses, including one particularly articulate email from Steven Towns, a successful shareholder activist, blogger, and author. Mr. Towns invited me to share his insights related to issues that arose when he submitted a proposal to General Electric in December that initially won SEC support (i.e. ruling that GE may not omit) but ultimately was excluded after GE appealed twice. Excerpts from Mr. Towns email include:
Hi, Craig, I wanted to send a quick note to thank you for putting together your list. The more shareowners that submit proposals the better, of course, the more informed the proposals, the better, too!
With regards to your “reasons” and what was interesting in my case is that I had much to say and was close to (but did not exceed) the 500-word limit when initially submitting my proposal. Technically, under 500 words, I should have been fine. But given how critical my proposal was…GE took its first of many swipes to try and thwart my proposal. So, it counted dollar signs and percent symbols, $ and %, each as words, and given the position of my supporting statement I had more than a dozen of them. In addition, it counted hyphenated words as two words, not one.
Mr. Towns urges those assembling a shareholder proposal to heed his example and be extra vigilant when word counting.
Expect to see many more such tools made available to our subscribers and sign-up is free.
As always, if there is a tool you’d like to see developed or topic you think we should cover, give a holler.
To contact Craig McGuire directly, please email Craig.McGuire@TheShareholderActivist.com.
Christopher Bayer, Ph.D. says:
Conflict and competition have thrived throughout history. Power, money, and control have been major emotional drivers creating markets, as well as wars. Attrition warfare showcases the belligerent force as being heavily invested in grinding down the perceived enemy to the point of defeat and/or surrender as a function of loss of material and personnel. Armies run out of men, food, and fuel at the front.
In this case (for the sake of illustration) we can conceive of corporations as the belligerent forces, and shareholder activists as the enemy. This may not be too “off the beam” based on what I’ve seen and worked with in my practice over a 30 year encampment with Wall Street personnel. The stakes are huge, the bounty enormous, and the emotional toll excessive. Again, on the Street money, power, and control are major drivers that cannot be ignored or trifled with; they are an inherent part of Wall Street culture.
In “combat,” forces exploit any and all weaknesses of opposition. To think otherwise is to be naive, even if the battle field is in the board room, or at the annual shareholder’s meeting.
Rather than focus solely on word count alone perhaps shareholder activists need to focus on “character count/number.” Every single space counts,every mark of punctuation counts, every nuance depending on who’s doing the counting. I do believe the SEC has a long, distinguished history of “bean counting.” The bean count is what matters most; the righteousness of the proposal can get lost in the shuffle.
Bottom-line: one can never be too cautious, or too careful in these matters. Better to err on the side of conservatism (at least in this instance) than expansiveness. Towns’ experience is well founded, and McGuire’s cautionary tale has deep, important implications for all shareholders. Of course there appear to be different rules, or customs, depending on in whose sand box (combat zone) one is “playing.”
I am reminded of the cross examination process in legal testimony. Witnesses can answer questions with absolute veracity 999 times, but on the 1000th query if they trip, fib, appear incredulous, “color,” err, lie, or flub in any significant manner then all previous data is suspect. That’s the operational ethic and code of testimony. It is an unforgiving process as are word, or character, counts for shareholder proposals.
The opposition will seize on any opportunity to “win.” Detail and perspective mean everything if one is going to get to play on the field at all, and be in the game.