No Shareholders’ Spring

CHICAGO – The ongoing global economic crisis is not only causing incumbent governments to lose elections; it is also shaking corporate boards. When stock prices and profits seemed to defy gravity, shareholders’ meetings resembled American political conventions: a show to promote a company’s image, rather than a forum to debate contentious issues. This year’s round of annual general meetings has been different. Frustrated by low returns, investors are much feistier.

At Credit Suisse and Barclays, for example, more than a quarter of shareholders rejected the pay package proposed by management. At Citigroup, a majority of shareholders rejected managers’ pay at Citigroup – the first S&P 500 company at which that happened.

Shareholder activists can also claim other (at least partial) victories at Yahoo!, where a shareholder activist forced the newly appointed CEO to resign for falsifying his educational credentials.

But many commentators’ hyperbolic depiction of a “shareholders’ spring,” with its resonance of ousted Arab dictators, is inappropriate for several reasons, not the least of which is the fact that the Arab Spring actually toppled regimes. At the moment, the current shareholders’ revolt is failing to achieve any significant result.