Shareholders meetings hit the road to avoid conflicts

Associated Press

NEW YORK

When it’s time for the annual meeting, and things might get ugly, there’s no place like the road.

Marshall & Illsley Corp., a 164-year-old Wisconsin bank, usually meets with shareholders each April in its hometown of Milwaukee. But that was before the bagpipe-playing firefighters and marching teachers descended on its branches by the thousands earlier this year to protest contributions from executives to Gov. Scott Walker. And it was before the board decided to sell the bank to a Canadian company, a deal that includes $65 million in severance for those same executives.

M&I postponed its regular annual meeting and decamped for New York, 900 miles away, for a hasty special meeting last week. It would be the bank’s last shareholders’ meeting — and it lasted only seven minutes. Attendees say executives promised to take questions at the end but never did, and exited quickly through a back door after having a vote to approve the acquisition by BMO Finance Group, the parent of the Bank of Montreal.

Executives of publicly traded companies are required to face their investors once a year at annual meetings, typically in the spring. These meetings allow shareholders — ranging from investing clubs made up of grandmas to large pension funds — to see and question the CEO and other top executives. For small shareholders, it’s likely the only chance to get face time with a company’s leaders.

Though moving a meeting isn’t a new phenomenon, these annual events most often take place in the city where a company is headquartered, or in Delaware, where many of them are incorporated. Sometimes a company might conduct its annual shareholder confab in a location where it has a strong business presence, a significant number of employees or a new partner.

But critics say going on the road is also one way companies under fire can hide from angry investors and avoid confrontations with shareholders and protesters. In many cases, the strategy has worked, with fewer people making the trek to attend far-flung meetings.