Sunday, May 14, 2006

Who says they're not accountable?

Here's the stupidest AP article of the day:
Move of Halliburton Meeting Draws Fire

DUNCAN, Okla. May 14, 2006 (AP)— Halliburton earned a record $2.4 billion last year, but Houston executives will forgo Texas-sized luxury when they come to this rural Oklahoma county seat this week.

Shareholders, who have gathered for the company's annual meeting since 2003 at Houston's lavish Four Seasons Hotel, will meet Wednesday in the modern, but far humbler setting of Duncan's convention center. Those staying the night can choose the Holiday Inn, with rooms opening onto the parking lot, and the Chisholm Suites Hotel, which takes its name for the cattle trail that once passed here.

Halliburton Co. says it moved its meeting to this company town of 22,500 to honor its southern Oklahoma roots. The company's critics accuse it of running to a prairie outpost to hide.

"They're relocating to a city where they don't actually have to be accountable to their own shareholders," said Maureen Haver, spokeswoman for the Houston Global Awareness Collective and one of 15 protesters arrested at Halliburton's meeting last year. "They're going to a town they have in their pocket." ...

Joseph Horgan, a representative for the International Brotherhood of Teamsters, came to Tulsa to represent the union's concerns and ended up riding out a tornado warning in a parking garage. Days later, he followed Pfizer to Lincoln.

Both meetings, he said, were convened far from concentrations of active shareholders, limiting participation by those with beefs about high executive pay and other business practices.

"They were trying to escape scrutiny by active owners," he complained after the IBM meeting.

IBM and Pfizer say changing their meeting locations is nothing new and that doing so gives shareholders in different regions of the country the chance to show up and executives the chance to showcase local facilities. Both reported average meeting attendance.
Liberals can never stop whining about successful American companies based on raw capitalism, and they'll seize on any excuse, no matter how ludicrous.

The "critics" act as if they're acting in the shareholders' interests, but the shareholders are more than capable of defending themselves. If the shareholders don't like where the meetings are being held, they can flex some muscle with their votes. Shareholders tend to keep a company's managers in line simply because the shareholders are the owners, and as owners they are in control -- not the other way around.

Last year, former Morgan Stanley executives started contacting institutional investors about pressuring then-CEO Phil Purcell to resign. Purcell was losing support because, among other reasons, he replaced the president with two friends, refused to spin off the Discover Card, and didn't appear sufficiently "in control" that investors would regain confidence and stop the company's stock price from falling. These shareholders were a significant percentage but still a minority (about a third of the total votes as I recall), yet enough that Purcell resigned. So who thinks that Morgan Stanley, which is far larger than Halliburton, wasn't accountable to its shareholders? When former executive John Mack was lured back to be the new CEO, he was offered a very generous compensation package, yet enough shareholders didn't mind. After all, what's $20 million a year when the company's profits could rebound?

The relatively low cost and ease of travel, compared to past decades, actually has made company managers more accountable. Yet even when meetings are held in major cities, it's not worth most shareholders' time to attend. But again, technology increases a company's accountability to its owners, and far more effectively than any amount of government regulation. Companies can record video and send DVDs to shareholders, set up massive conference calls and video feeds, and e-mail transcripts as soon as they're completed.

The more probable reason for the locations are so these companies can actually get something done at the meetings, instead of dealing with liberal morons who like nothing better than to demonstrate violently and trespass. A sit-in in a hotel is a violation of private property, not freedom of speech.


Blogger CaptiousNut said...

And when one of their own companies is not accountable to shareholders, they suddenly have a different set of standards.

Consider the NYT and it unaccountability to shareholders.

First of all, they never should have been indexed in the S&P 500 with that ownership structure (see link). Secondly, all of the "concerned" pension funds like Calpers or the NY state pension board would never utter a word of criticism against NYT management.

Silence can be just as political as screaming.

Monday, May 15, 2006 8:53:00 AM  
Anonymous Brad Warbiany said...

I just found one thing funny:

"spokeswoman for the Houston Global Awareness Collective"

Yeah, I'm sure she's really worried about shareholders...

Good post, Perry...

Monday, May 15, 2006 10:21:00 AM  
Blogger Mike said...

"After all, what's $20 million a year when the company's profits could rebound?"

And therein lies the problem. To you and me and everyone else that doesn't have the economic maturity of a teenage girl, this makes perfect sense. But to them, this is obscene that someone makes so much for doing so "little" while the lower class "hard workers" get paid so little. (In case anyone is interested, I'm in my fourth summer of being a "hard worker," so I know what its like..and its worth exactly what we get paid.)

Monday, May 15, 2006 9:01:00 PM  

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