More and more American companies are dropping their annual meetings of shareholders and going for online broadcasts. The argument for the move is based on cost savings and increasing the potential audience – but that is something some companies are already doing by maintaining their meetings and broadcasting online.
But faced with activists and other potential touchy questioners, some companies are dropping the physical meeting completely for better control and to protect managements and boards.
But you can bet there is one corporate annual meeting that will never go wholly on line, even though there has been a step up in the pace of companies ending physical meetings of shareholders and going solely via a website as Ford, the US car giant, because the latest of some 150 major companies to move online.
That company is Berkshire Hathaway, whose annual meetings in late April or early may (May 6 this year) are legendary, attracting tens of thousands of shareholders and others to the US midwestern state of Omaha Nebraska, where Berkshire is based.
Berkshire’s annual meeting went on line last year for the first time ever – the total number attending for the April 30 weekend fell, according to the company and city officials to around 48,000, but an estimated 17 million people tuned in to the online broadcast via Yahoo, which has signed up for another go next month.
Berkshire has had 51 AGMs and the online audience last year was more than the reported totals for those meetings according to the company.
For years now Berkshire’s meetings have been referred to as “Woodstock for Capitalists” with Warren Buffett out and about, playing bridge and table tennis, taking part in newspaper tossing contests (he delivered newspapers when an early teenager), eating at various outlets (with a Coca Cola drink in his hand – Cherry flavour. The company is one of his longest held shareholdings).
None of that will change and some US analysts say numbers visiting might start rising, given the experience of other events that have moved to online simulcasting and seen a rise in the number of people actually attending.
But many people in corporate America (and increasingly in the Business Council of Australia), are going wholly offline to better control the meeting, restrict shareholder questions from activist groups (that is always denied) and cut costs (at a time of rising profitability). They do not welcome shareholder ands tough questions as Buffett does (on global warming for instance).
Ford announced last Friday that it was joining “a growing list of forward-looking companies” by ending its in-person (physical) shareholder meeting. “The virtual nature of the meeting will enable us to increase shareholder accessibility, while improving meeting efficiency and reducing costs,” said Bill Ford, chairman.
HP, JetBlue, Sprint, Fitbit and PayPal are others to have switched to virtual meetings. the Financial Times reported that number of companies holding online-only events was 155 last year, with a further 32 testing the waters by holding simulcasting an in-person meeting as well as a virtual event (Like Berkshire Hathaway). The number will be close to 200 by the end of this year, according to some estimates.
Mid level oil and gas major, ConocoPhillips is another company switching to “virtual” meetings this year, in a move they say makes it possible for more shareholders to take part and ask questions. It has been cutting costs and slashing staff numbers because of the downturn in revenue from the oil price sump. Last week it sold $US13 billion worth of Canadian oil sands and gas assets to cut debt and give shareholders a capital return.
The FT says that "Opponents, however, say directors are using technology to hide from the small shareholders and activists who have enlivened corporate meetings for generations. According to Broadridge, the investor services company whose software is used for virtual shareholder meetings, 184 US companies will hold online meetings in the first six months of this year, a one-third increase on the period in 2016.”
“The decision by Duke Energy, the largest utility in the US, to switch to a virtual meeting this year, was criticised by As You Sow, a shareholder group that has put a resolution on the agenda demanding information on pollution from its coal-fired power plants,” the FT reported.
