We just held our Annual Stockholder Meeting. It’s the one-day of the year that I am guaranteed to wear a suit. I think it’s also a favorite day for my young teenage daughter. She savors the chance to give me one of those “you aren’t really going to wear thaaaaat are you?” comments — said with appropriate roll of the eyes– as I go out the door. I do have to admit, the suit felt a bit tighter this year.
Much of the reason the meeting went so well is the result of work done earlier in the year. At the direction of our board of directors, our team has actively engaged with a number of shareholder groups and solicited their input on our corporate governance policies. The result was that we made a significant number of changes, including:
adoption of majority voting for directors;
removal of our stockholder rights plan;
adoption of performance based stock award;
adoption of a mandatory retirement age for directors;
adoption of annual board and committee self-assessments;
implementation of stock ownership guidelines for executives, and
creation of a presiding director duty statement.
Also, as a result of recent management changes, Sun’s Chairman and CEO positions are now held by separate individuals. For those who are interested, page 14 of our proxy has additional details.
To me, however, the current form of Annual Stockholder Meeting is an archaic holdover from the days when international trading markets were non-existent. Back then, it made sense that you would be able to have all of your stockholders together in a single physical location. That no longer is the case. Today, stockholders are located around the globe. And, because of the use of brokers and proxies, the outcome of the vote at the meeting is usually no surprise. So, you end up spending a great deal of money in terms of facilities, security and internal resources for something that is generally attended by no more than 100 to 200 individual stockholders. For them, the real value is the opportunity to directly question management (and we had some very thoughtful questions at this year’s meeting). But, it does seem unfair that stockholders that are not physically present don’t have the opportunity to do the same.
My personal belief is that in the very near future, Annual Stockholder Meetings will move from the physical to the virtual. (In fact, Delaware corporate law already permits this.) Through live interactive web casts, voting will be electronic and real-time and stockholders will be able to question management and directors by email, phone or over the web.
To some, this may seem farfetched, but take a look at the first comment posted to Jonathan Schwartz’s recent blog. It’s from SEC Commissioner Cox. You may recall that Jonathan and I previously sent a letter to Commissioner Cox advocating the idea that dissemination of material information through corporate websites and blogs should satisfy Reg FD. Looks like the SEC is interested in discussing the idea further.
I’m beginning to think this whole “Internet thing” might catch on. 😉