(Reuters) - Some small investors who want to give a piece of their
minds to big tech company directors are losing their only chance:
many board members are skipping annual shareholder meetings.
Companies that hold meetings online have some of the worst records
PHOTO: Paypal co-founder Peter Thiel speaks at the
Republican National Convention in Cleveland, Ohio, U.S.
July 21, 2016. REUTERS/Jonathan Ernst/File Photo
large portion of Alphabet Inc (GOOGL.O),
Facebook Inc (FB.O),
Netflix Inc (NFLX.O)
and Twitter Inc (TWTR.N)
directors have not attended annual shareholder meetings in recent
years, company records and securities filings show, in some cases
in growing numbers.
high-profile no-shows at the meetings - which are often the only
chance “mom-and-pop” retail investors get to ask directors
questions - include Alphabet Chief Executive Larry Page and
Facebook board member Peter Thiel. The companies declined to
discuss the absences in detail.
big asset managers can get access to directors, shareholder
activists and corporate governance experts say the empty seats at
annual meetings mean small investors and campaigners challenging
directors to make corporate changes may not get to engage with
they’re not hearing it, they can’t address it and they can’t
respond,” said Christine Jantz, chief investment officer of
NorthStar Asset Management.
for example, might have dealt better with its data privacy scandal
earlier this year if its full board had taken more notice of
content oversight and governance issues that were discussed at its
most recent annual meetings, said Jantz.
four of eight directors attended Facebook’s annual meeting in
2017, according to the company’s proxy filings. A transcript shows
five of nine directors attended its May 31 annual meeting this
year and that Thiel was not present.
Facebook spokeswoman declined comment, but noted that Jeffrey
Zients, who joined Facebook’s board after the meeting, replacing a
departing director, did attend this year.
the parent of search-engine leader Google, has even lower numbers.
Four of 11 directors attended its June 6 annual meeting, according
to a spokeswoman. CEO Page was absent, a transcript of the event
shows. Four directors also attended last year’s meeting. The
average since 2006 is five directors.
would think that the board members would want to be there and
fully aware of these issues,” said Natasha Lamb, managing partner
of Arjuna Capital, which at this year’s meeting called for
Alphabet to report on its efforts to address political propaganda
and other problematic material on Google’s YouTube service, and to
report on risks related to pay differences between male and female
PHOTO: Larry Page, CEO and Co-founder of Alphabet enters
Trump Tower ahead of a meeting of technology leaders with
President-elect Donald Trump in Manhattan, New York City,
U.S., December 14, 2016. REUTERS/Andrew Kelly/File Photo
National Association of Corporate Directors and many governance
consultants recommend directors attend annual meetings.
from Alphabet and Facebook, almost all directors of top U.S.
businesses attend their annual meetings, according to the most
recent proxies of the 20 largest companies in the S&P 500
Buffett’s Berkshire Hathaway Inc (BRKa.N),
JPMorgan Chase & Co (JPM.N)
and Exxon Mobil Corp (XOM.N)
all had strong director attendance this year, according to
transcripts and spokespeople. Tech leaders Apple Inc (AAPL.O)
and Amazon.com Inc (AMZN.O)
also had good director attendance.
the other end of the scale, some other tech firms are taking to
cyber space, where director absences are less noticeable.
two of Netflix’s 11 directors, including CEO Reed Hastings,
attended its June 6 online-only annual meeting, a company web page
shows. A third director attended in 2017, when the meeting was
held in person.
online format is a “great enabler” for directors inclined to skip
the meetings, said John Chevedden, an activist investor who
frequently files shareholder rights proposals.
Netflix spokesman declined to comment on the attendance but said:
“We approach board practices with a high level of transparency.”
In response to a complaint from Chevedden, Netflix said its
“virtual” meeting was more accessible to stockholders.
nine Twitter directors, only CEO Jack Dorsey was identified as
present at its meeting on May 30, also held only online. Two
Twitter directors attended last year’s event, down from six in
2016 and five in 2015, filings show. A Twitter spokeswoman
declined to comment on the figures and said the online format was
aimed at boosting stockholder participation.
by Ross Kerber in Boston; Editing by Bill Rigby
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