Oliver Stone’s “Wall Street” is not one of Hollywood’s great films, but it does contain one of the more memorable scenes derived from an annual shareholder meeting – with Gordon Gekko (Michael Douglas) seizing the microphone and the moment to lecture an auditorium filled with shareholders of the fictitious Teldar Paper company that “greed is good.”
If Intel Corp. has its way, even Gordon Gekko might be hard-pressed to find a way to dominate annual meeting proceedings. In May 2010, the giant tech company will become the first publicly-held U.S. company to hold a “virtual shareholder meeting” to the exclusion of an in-person gathering. Working with technology provided by Broadridge Financial Solutions, Intel will hold its annual meeting only on the worldwide web.
While Broadbridge argues that virtual meetings offer advantages – including no cost to attend annual meetings, and “increased transparency,” with more shareholders able to attend – activist investor groups say Intel’s move would set a “negative precedent” for other companies.
“There is no substitute for the personal and sometimes subtle interactions that can take place at in-person meetings,” says Tim Smith, Senior Vice President of Walden Asset Management, a socially responsible investment firm, in a letter to Intel. “We think that some questions – whether related to business strategy, financial results or ESG (environmental, social and governance) performance – merit interactive discussion that is not easily accomplished via a disembodied electronic connection.”
Smith tells Cary Klafter, Intel’s corporate secretary, that Walden supports the company’s efforts to expand shareholder access to the meeting via the web; Smith also encourages a “no frills physical meeting” to keep costs down.
But, Smith argues, “If Intel abandons the physical meeting altogether, the resulting precedent may have unintended negative consequences as some corporations will likely see virtual meetings as a means to limit shareholder input. No doubt you can imagine a host of possible abuses by managements or boards who prefer to limit accountability and shareholder interaction.”
Corporate governance policies of the Council of Institutional Investors, which represents pension funds with more than $3 trillion in assets, suggest that “companies should hold shareowner meetings by remote communication (so-called electronic or “cyber” meetings) only as a supplement to traditional in-person shareowner meetings, not as a substitute.”
Intel has a generally good reputation on corporate governance issues. No response yet from the company to Smith’s letter. The Intel investors meeting is scheduled for May 11-12, according to the company’s web site.