🎵Where have all the gadflies gone?🎵
You know who we mean. The typically older stockholders owning only a modest number of shares, with lots of time on their hands because, besides being older, they were usually retired. And their passion was to attend annual stockholder meetings and torture executive management with as many tough questions as they could get away with – the questions frequently being totally inappropriate, if not insulting.
Some of the most famous of these characters were Evelyn Y. Davis, Lewis and John Gilbert, Emil Rossi, Wilma Soss and William Steiner. Davis was the most fearsome, because she would hog the microphone and belittle the C-Suite sitting up on the dais – threatening to trash them in the press if an attempt was made to silence her. We think it is also public knowledge she much preferred dealing with men over woman, so woe betide a woman CEO whose meeting she attended. Your writer once served as Inspector of Election at an annual meeting where Davis started speaking, when, lo and behold, another gadfly stood up and ordered her to give HIM the microphone. “No way,” she yelled. “Yes way,” he yelled back. This went on for a good ten minutes. Ultimately the Chairman, who was also the CEO, said “I’m sorry everyone but I have to fly to an important meeting which will greatly benefit the company, so I must bring the meeting to a close,” whereupon he abruptly adjourned the meeting and left. Wisely, all voting on the proxy statement matters had already been handled at the outset of the meeting.
So now fast forward to today, when at least half the annual meetings of U.S. public companies are virtual (“VSMs”). These events do not allow for gadfly disruptions. Companies can even pick and choose which shareholder questions submitted electronically will be answered during the meeting. Sure, today’s successors to the fearsome gadflies of yesteryear, like John Cheveddon and James McRitchie, are still quite active submitting contentious shareholder proposals, and they sometimes present them “live” at VSMs, but their ability to spar directly with the C-Suite is limited – it all happening in a “remote” environment where no one can SEE any fur flying. And at the remaining in-person meetings we don’t hear about gadflies buzzing around anymore either, perhaps because the Davis, Gilbert and Rossi types in particular are gone and were not replaced by people of similar grit and pizzazz. Wilma Soss used to show up at meetings in various costumes to emphasize her “take” on issues, like as a cleaning woman with mop and pail, and as a safari guide wearing khakis and a pith helmet.
We support shareholder activism. It keeps corporate management honest and on its toes. And we have written before that shareholder questions – appropriate, not meaningless or insulting ones of course – should arguably ALL be presented and answered during the meeting, like at the in-person meetings of the past. Even gadflies raising valid issues should have been, and usually were, allowed time to make their points. But we don’t miss the gadflies who grabbed the microphone simply to draw attention to themselves and gleefully spoil the meeting for everyone else. There’s no time for that anymore, if there ever was.