Circa August 2008
And, y'know, when the opportunity to stop crap like this from happening arises, a good chunk of us do not act.
See, I own stock. Not a lot, mind you. Most of it came from my dad. It was given to him as part of a buy-out from AT&T to get him to retire and then he gave it to me. I do not like the stock market. It's gambling and I do not like to gamble. I see that gambling failing miserably in my company's 401K plan. No matter what stock they offer, it's all tanking right now so there goes my so-called "investment". Anywho, outside of the 401K stuff and the stuff my dad gave me, that's all the stock I own. regardless, because I own stock, every year I get a prospectus from the companies of which I own shares. Everyone who owns stock get these. Inside the prospectus are details regarding where the company is going, what plans they're making, what board members they want to add on, et cetera, et cetera, so on and so forth. What is also in there, more often than not, are proposals put forth by everyday, run-of-the-mill joes like you and I, trying to bring the high and mighty corporate executives down to earth. Anyone who owns stock can submit proposals. I don't know what regulations, if any, there are before they get presented in the prospectus, but for the most part, if you own stock, you can make a proposal. The thing that sucks is that if you work for that company and submit a proposal that goes against the CEO or Board, you're exposing yourself.
Anywho, these folks often bring up proposals to limit CEO pay or having compensation packages put up to a vote by shareholders or eliminating company perks like a private helicopter ride for the CEO's daily commute. Almost always, the Board recommends the rest of the shareholders vote against these proposals as it limits their ability to stay competitive to bring in the best and brightest CEOs to lead the company. Riiiiiiiiiiiiight. Y'know, frankly, if a guy isn't willing to move for his new job as CEO that you gotta fly that son of a monkey's disowned uncle in at $3500 a pop (one way), then how committed is he really to turning the company around? A good CEO that really CARED about the company he worked for would look at the finances and say, "Cripes! Over three thousand dollars for the helicopter to get me here? Well, seeing as how we don't have enough money to provide bagels and coffee to our employees during morning meetings, maybe we'll shit can the helicopter to save a few bucks. I'll suck it up and move." And if uprooting the family isn't something you want to do, then DON'T TAKE THE EFFING JOB!
I digress. The point is, the prospectus usually has proposals in there to fix these sorts of shenanigans. So, you take your proxy and vote either "for" or "against" the proposals. Each share of stock you own represents one vote. Like, I said, the Board usually advises you to vote "against" any shareholder proposal to hold them accountable. Big surprise. Want to know a bigger surprise? If you don't vote. If you just throw the prospectus and proxy away, 9 times out of 10, that means your votes automatically default to vote according to the Board's recommendations.
See, if a guy submits a proposal which states "We should get rid of the company helicopter. It costs too much to maintain in tough financial times especially with the lack of products lined up in our pipeline over the next two quarters," the Board counters, saying, "The Board recommends shareholders vote AGAINST this proposal as the helicopter has proven to be an invaluable and essential asset in day-to-day business operations. This would also severely limit the Board's ability to attract high-caliber executive talent to our company putting us at a severe disadvantage with our competitors." Now if you get your prospectus and say, "Oh, I don't have the time to read it," or, "I just don't care what happens to the company," or maybe, "It's all a bunch of corporate mumbo-jumbo that I don't understand," and you never read it or throw it out or whatever, then you, in most cases, are voting against the proposal to get rid of the helicopter. If you own 150 shares of stock, that's 150 votes that side with the Board to keep the helicopter right where it is.
This is what my father did. For all the years that he owned stock. he never read them. He never voted. And then he would complain that the company is being mismanaged and that it's being run into the ground. His apathy contributed to the poor performance of the company. By not voting, he ending up voting along with the Board's wishes. This is how the executives maintain the majority. This is why all the things we see wrong with corporations that we complain about never change. That's what dad did. Until I told him what I'm telling you. Now he votes. Now he's making a difference. Now, you can too. If you own stock, read the prospectus. Read the shareholder proposals. Vote on your proxy. And tell others you know all about this and why it's important. This type of crap with the pensions (
http://online.wsj.com/article/SB121761989739205497.html?mod=hpp_us_pageone)? We can stop it. We can change it. All we have to do is vote.
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