In the run-up to the annual podcast covering “The Conduct of the Annual Meeting,” a prospective attendee wrote in to ask if they could pre-record their entire Meeting, and to answer only pre-recorded questions, saying that their transfer agent (one of the biggest ones, that we will allow to remain anonymous) recommended this to them as part of a “major trend.” Ouch!
We responded that Meetings that do not allow shareholders to ask questions during the course of the Meeting do not meet the test as being “Meetings of Shareholders” at all - and they probably flout the rules for VSMs that have been promulgated (with a few minor differences) in all 50 states – in our layman’s opinion.
“Yes, there has been a big trend to having the Chair’s opening speech - and the introduction of management and shareholder proposals being pre-recorded, which, on the whole, has been useful. But there is big and well justified pushback from many institutional investors on Meetings that do NOT allow for live questions - and especially on agendas that do not allow sufficient time for shareholders to vote or change their votes online after the discussion period is over. Also, trying to put the entire Meeting on “automatic pilot” is a risky thing to do - in that there is always a chance that “breaking developments” will need to be discussed at the Meeting…but where? And how? And by whom? The logistics here would be formidable.
The biggest issue however, is that such a move will incur the wrath of Institutional Investors - particularly the Public Pension Funds - and likely give rise to even more activism - and to public naming and shaming – and could well result in the Meeting results being declared null and void!” The T-A in question is way out of its lane here - and needs to wise up immediately.
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