Yeah, yeah. Soylent Green was released a thousand years ago, but it looks like the conservative majority on the US Supreme Court saw a rerun of it and decided "Works for us!"
WSJ: Supreme Court Reverses Limits on Campaign Spending
Royal Dutch Shell's $10M toward Congressman "Drill Baby Drill" and your $25 toward his opponent are equal contributions under the law. Doesn't that make you feel warm and fuzzy?
I've heard commentators saying things like "shareholders can sway corporate behavior," including Chief Justice Roberts. See Reargument, Citizens United v. Federal Election Commission p. 58:
[Are you saying] shareholders are too stupid to keep track of what their corporations are doing and can't sell their shares or object in the corporate context if they don't like it?to which I say, "have you ever owned stock?" In my experience annual shareholders' meetings rarely have any impact on management's activities, even when salary and bonus decisions are discussed.
Another argument I've heard: "Well, it means labor unions can spend freely too," to which I say, "unions are way outgunned in terms of the cash they have to spend, and they only represent about 12% of the American population. What about the rest of us?"
Thank you, Ronald Reagan and the Bush family. Between the three of you you appointed all the justices who voted in the majority on this case.
Posted by Linkmeister at January 21, 2010 10:05 AM | TrackBackSpeaking from 30 years working in the financial industry: shareholder activism is a fairy tale, even if the shareholders are engaged (rare) and organized (even rarer). The reason? A little secret called "treasury stock." This is the amount of the corporation's stock held by the corporation itself. It is almost invariably a bigger block than anybody else holds, and guess how management votes it?
On top of this, the next largest blocks of stock are held by institutional investors - that would be your pension fund, your mutual fund. Those investors tend to vote with management too, largely because it requires less effort, and if they didn't believe in management they wouldn't own the stock. (There are a few exceptions to this.)
Your 200 shares of Exxon, or even your 2,000 shares of Exxon? Not even background noise.
Posted by: hedera at January 21, 2010 12:36 PMI couldn't even sway my mutual funds' managers to do what I wanted with their own parent company, so the odds of getting them to change the behavior of a corporation whose stock they held in my name were slim to none. As you say, I felt they tended to sympathize with the corporation's management anyway.
Posted by: Linkmeister at January 21, 2010 01:06 PMBut corporations usually taste bad (and unlike Charlie the Tuna, also have bad taste, where good taste is not shown by paying millions of dollars for fine art, even good fine art). And I don't think ketchup helps.
Posted by: Bruce Cohen (SpeakerToManagers) at January 23, 2010 01:35 PM