New Orleans I love these big, fat whoopers that the big corporate whoops stand and piously tell about working for their little shareholders, pensioners, and old ladies in Des Moines, especially because it is crystal clear that if they don’t treat these publicly owned companies as private preserves, they are only accountable to the big hedge funds and institutional investors. This is the season when they start rolling out their annual reports on performance over the last fiscal year and pretending that there is some kind of shareholder “democracy.” What a hoot!
It’s the season when shareholders get to try to vote and be heard. An interesting article the other day went through the list of some of big companies where CEOs and directors routinely ignore the votes of the stockholders. Not surprisingly Oracle, the computer and software company, was listed as a prime example where its CEO and big shareholder, Larry Ellison, always among the ten richest billionaires in the world, and often a leading figure on any lists of overpaid executives, is the big dog. Shareholders there have voted multiple times against the compensation program and the inflated pay packages, but their votes are ignored so the good times can roll.
The myth is more important than the reality when Wall Street pretends they are accountable to shareholders. It’s another example of democratic farce before tragedy. Meanwhile conservatives wonder why “little” shareholders have left the market. In some ways the answer is simple: casinos have now created more gambling options closer to home than Wall Street.
Not that they really care.
Simple things like a company’s annual reports, a rare piece of business journalism requiring special skills for the initiated to plow through the numbers hidden in the marketing and promotion, is no longer required to be sent to individual holders. Instead they get a notice that tells them that the report is done and the annual meeting is coming, but if they really, really want a copy, they can go on a website and see if they can request one, and just maybe it will be sent along. I bet we can almost count on one hand the number of people who will go to the trouble. Meanwhile, they want the shareholder to vote for their slate of directors and follow the directors’ instructions on other ballot issues.
Actually Vegas probably does a better job at regulating gambling than the SEC does. In Vegas it’s important for the punter to believe that there is a fair deal and that the game is not fixed by the house. With computer trading, Wall Street machinations, and kid glove regulation by the SEC, no one will ever pretend that Mom and Pop little shareholders with a couple of shares of stock where they used to work isn’t playing in a rigged game that always favors the big houses.