Some Rights are Worth the Fight
For my column yesterday, I wrote about how activist investor John Chevedden has been subject to legal action by companies that want to exclude his shareholder proposals from their proxy statements. Even more suspect, the usual procedure companies take in such situations is the SEC's no-action process, so these companies are bypassing normal procedure to take it to the courts.(This is deja vu, as Apache did this last year, too.)
James McRitchie at CorpGov.net has been covering this issue, and in his most recent post he points out an action that I neglected to mention in my article, which is emailing the SEC and expressing concerns about these companies' actions, not to mention the precedent this might be setting going forward. Shareholders being allowed to vote on other shareholders' proposals is a pretty basic right we should all expect from our stakes in public companies. (I argued yesterday, good grief, it companies can't take the heat of a shareholder scrutiny on their policies, WHY are they public companies anyway? Sorry, shouldn't have screamed "why," but I just get irritated sometimes.)
Great quote from McRitchie's post: After many challenges, the SEC’s powers were finally sustained in the 1947 case, SEC vTransamerica, when judge John J. Biggs Jr. ruled, “a corporation is run for the benefit of its stockholders and not for that of its managers.”
I fear many investors get tremendously confused about this, and of course, not all courts will necessarily see this point of view either. I kind of think it's a rather huge misinterpretation that's a little too pervasive in the marketplace.
Anyway. I wanted to throw this out there (including the option of writing to the SEC). I think it's important for investors to be aware of these issues, and what really jumps out at me: if a company's willing to work THAT hard to stifle shareholder opinion and voice, it really may not be worth our hard-earned investment dollars.