The Wall Street Journal discusses new online networks for organizing smaller investors to agitate for corporate change:
Mr. Steiner, 45 years old, is a private investor from New York’s Long Island who filed petitions at five companies late last year under the new SEC rule. Over the past decade or so, Mr. Steiner estimates, he has formally made several hundred proposals to improve how companies are run—including simplifying the election of directors, giving more say over how top executives are paid and eliminating “poison pills” that can entrench management.
“It’s up to the small shareholders to get these things on the agenda,” Mr. Steiner says. “Institutional investors have been horribly negligent in what I consider their fiduciary duty to the people who invest with them and to the country in general. They don’t want to ruffle feathers, and they’re cowards.” …
Using a form he downloaded from proxyexchange.org, Mr. Steiner late last year requested that the boards at Bank of America, Textron, Ferro, Sprint Nextel and MEMC Electronic Materials amend their companies’ bylaws to permit any group of 100 or more shareholders who have held at least $2,000 in stock for at least one year—or any holder of 1% or more for at least two years—to nominate directors. …
Frustrated by how hard it is to find other investors willing to shake up moribund companies, Mr. Cunningham founded Sharegate. Likely to launch later this year, the website will join others that seek to rally shareholders, including United States Proxy Exchange, ProxyDemocracy.org and Moxy Vote.
Though there have been several articles touting the promise of these new networks I remain unconvinced that, beyond a few dedicated shareholders, individual investors will be more effective than institutional investors. What do you think?
Read the full article here.
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