NY Times DealBook: Shareholder Activists Take to the Web
March 13, 2008, 6:50 am
Activist investors are stepping up their use of the Web to push for change at companies, Compliance Week wrote in a recent article.
The Securities and Exchange Commission seems to be acknowledging the trend: Last month, it adopted amendments to federal proxy rules intended to “encourage the creation of, and participation in, company-sponsored electronic shareholder forums.” These amendments may assist grass-roots activists such as Eric Jackson, who created a Web site where small Yahoo shareholders could press for an overhaul of the struggling Internet company.
The article credits Mr. Jackson with ousting the chief executives at both Yahoo and Motorola “with a few thousand dollars and series of well-timed mouse clicks.” Realistically, it took a bit more than that: Carl Icahn, the billionaire investor, publicly sparred with Motorola’s board for months, for example.
Under the new rules, company-sponsored Web forums may foster a meaningful dialogue among investors. Or they could become little more than “glorified chat rooms.”
The California Public Employees’ Retirement System, an influential voice in corporate governance issues, expressed this latter concern in a comment on the proposed rule changes.
Here is what CalPERS’s general counsel wrote:
CalPERS believes that non-binding shareowner proposals are too important to the corporate and shareowner community to be replaced with an unproven chat-room concept.
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