The first annual corporate shareholders meeting I ever covered was an Ameritech event held some 15 years ago in a large auditorium at the Art Institute in Chicago. I was new to working in "The Loop" at the time and enjoyed going over to the Art Institute on my lunch hours at least once a week--you could get in free on Tuesdays.
At the time, I thought it was a strange setting for a corporate shareholder meeting, that event which aspires to cast itself as a quaint town hall meeting. Though, even the smallest small town meetings have a way of unraveling into endless bickering and complaining. Perhaps by ushering its constituents through the gallery and urging them to stop an contemplate works by Hopper, Chagall and others, Ameritech was hoping to mollify whatever noise was sure to rise during the meeting.
This Thursday, another Chicago-based company, Telephone and Data Systems, will be holding its annual shareholders meeting, and TDS, a small market ILEC and CLEC more known for its ownership of U.S. Cellular than anything else, may be wishing for such a soothing device (Alcatel-Lucent might want one, too, on May 30). TDS, founded in 1969 by current chairman emeritus LeRoy T. Carlson, and now led by LeRoy T. Carlson, Jr., was accused last week of not informing its shareholders that another firm had bid to acquire TDS, and that TDS already had turned back the offer.
The charge was made by investor firm Southeastern Asset Management, which said it will now withhold votes for board of directors candidates at this week's shareholders meeting. Little as known at this point about the details of the acquisition bid or if there even was one (since TDS had not acknowledged it as of this weekend). However, the commotion is sure to put TDS' familial leadership in the collective hot seat come Thursday. Shareholders should and presumably will be looking for answers.
The controversy also re-ignites a perpetual issue: What exactly is in the best interests of shareholders? Should a telecom company soberly evaluate every single offer that comes its way? Should it publicize every offer? Does a top-dollar bid for a short-term deal over-rule other points that might be in the long-term interests of shareholders?
One thing I remember about that long ago Ameritech shareholder meeting was that not many of the shareholders were interested in long-term strategic or markets issues. Quite a few of them had complaints about the size of recent dividend checks, and otherwise were not terribly interested in Ameritech's state of the company information.
Maybe an era of corporate scandals and industry consolidation has changed things, and more informed shareholders are employing all the market intelligence at any CEO's disposal to evaluate the performance of the firms in which they are invested. This week's meeting--and how TDS handles it--is likely to tell us a lot about how that era has influenced both corporate governance and the definition of what exactly is in the best interests of shareholders.
- Dan