Tuesday, 13 Nov 2018
Business

RIP, Evelyn Y. Davis: An irrepressible shareholder activist for ages


Evelyn Y. Davis is offering a bullet to an ammunition bandier that she was wearing at the shareholders meeting of the 20th Century-Fox Film Corp. in 1971 (Bill Ingraham / AP)

At an annual meeting of shareholders of a major airline in the 1990s, Nell Minow remembers meeting Evelyn Y. Davis, a flamboyant company who died last Sunday at the age of 89, after decades theatrical epic but persistent among corporate executives.

"She was talking to the staff there and was convinced that the microphone of the Q & A session should be closer to her seat," said Minow, a shareholder rights advocate and long-time advisor on corporate governance issues. # 39; company. Not only that, but "she wanted the CEO to move him personally," she said. "And he did it."

The story is a classic, Davis, the US-Dutch investor, concentration camp survivor, shareholder activist and publisher of the annual newsletter – "Strengths and Weaknesses of Annual Meetings" – which earned him a pass press at the White House. She has tabled resolutions with many public companies over several decades and has presented at annual meetings not only to cajole and encourage the board to adopt better governance, but also sometimes to flirt with the CEO, and apparently always, to draw attention to itself.

In 2010, she told Jamie Dimon, CEO of JPMorgan Chase, "that you have to stay here forever," wore a swimsuit during a meeting at General Motors in 1970 and, according to Automotive News, told Alan Mulally, former CEO of Ford, that Looking, "you should go back to Boeing, and we should have my king, Bill Ford, come back and be president and CEO again."

In 2003, Bill Ford personally handed over the keys to his new Jaguar at the Watergate Complex in Washington where she was living, after which Bloomberg said, "It's my secret, manipulating the male self, playing against each other."

A gravestone she had installed at Rock Creek Cemetery in Washington State reads: "Queen of the Enterprise Jungle" and "I did not realize the situation neither of my shyness. When the Washington Post described it in 2003, she suggested her own title: "I was gifted with an extraordinary beauty and brain and I used them for my ultimate benefit. "

Like most shareholder activists, his proposals often do not garner a majority of votes. At the Bank of New York meeting in 2006, she won a majority of votes in the election of board members, for example, and succeeded in having Bristol-Myers Squibb adopt annual election after years of pressure. In 1990, it asked General Motors to prohibit over-allotment of shares and, in particular, to influence the rules of the US Securities Exchange Commission regarding the disclosure of executive compensation.

According to governance experts, investors continue to focus on key issues such as director quality, shareholder voting processes, executive compensation, corporate legal invoices and political contributions.

"Early on, she identified these corporate governance issues in our larger businesses. She was a consistent advocate and, according to some, irritating, "said Charles Elson, who runs a governance center at the University of Delaware. "The message she was promoting was really ahead of her time. What was considered far enough there [then] is not only the mainstream today, but the dead center of the mainstream.

His tactics, said Minow, "facilitated the removal of the legitimacy of his arguments, which were generally excellent. The questions she raised were identical to those raised by investors today. Davis "has really educated the community of shareholders more than she has educated the business world".

The world of shareholder activism has evolved considerably since Davis began attending shareholder meetings in 1959. Today, discussions between shareholders and companies tend to unfold. more often behind the scenes or in a less dramatic way, even as pension funds and other issues promoted by Davis.


Evelyn Y. Davis owned stocks in over 80 publicly traded companies and liked to show her presence at shareholder meetings. His flamboyant methods "easily rejected the legitimacy of his arguments, which were generally excellent," said one observer. (Seth Wenig / AP)

"Companies have started to be much less distant," said Richard Clayton, research director at CtW Investment Group, a group of activists working with union-sponsored pension funds. They were "more committed and more willing to make a change if they thought the change was relatively modest and logical, and if it allowed them to avoid public controversy".

Shareholder resolutions are often withdrawn if a company adopts a change and can never put it on the ballot.

Nevertheless, the role of the individual investor as a corporate gadget is alive and well. According to Proxy Insight data, depositors such as John Chevedden and James McRitchie, as well as other people, were responsible for 200 shareholder proposals that were incorporated into the company's proxy statements to date in 2018, 38% of the total. The average vote in favor was 34%.

"They do not wear clown noses at annual meetings and do not wear pants like Evelyn's," said Minow, "but they're slow and steady," and their problems "gain support over time." .

In an email, McRitchie said that although Davis "used too many crazy tactics, such as pushing sales of his newsletter to CEOs and dressing up like crazy," she "helped push back the Limits in the number of declassified boards of directors ", which meant that directors all be elected each year, rather than being staggered over time.


The tombstone that Evelyn Y. Davis ordered for herself. (Courtland Milloy / The Washington Post)

"She has won majority votes on this issue in 36 companies between 2001 and 2009 and perhaps much more before that deadline," said McRitchie. "For this, we can all be grateful.Create more democratic corporate governance is not and should not be done by elderly men in three-piece suits." Embrace diversity. "

Minow said individual shareholder activists can play a leading role in business because large institutional investors – especially fund managers – "do not always want to be in the vanguard". When gadgets steal the resolution, "it's like a note in a bottle, you describe it," and larger investors might follow.

With the growth of fund management companies and institutional investors and the influence of proxy advisors, people's chances of being magnified are even greater, Elson said.

Elson, who had known Davis for years, said things were different during his heyday. "His style was theatrical and at that time, for an individual, you had to be attentive or not pay attention," he said. He remembers doing shopping with his kids on Saturday morning and having received calls on his Davis cell phone.

"She had the cell phone number of everyone," he says, and "she would shout on the phone, CHARLIE, no matter where you were, you were going to stop." She was not going to let you go before you finish. "

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