Commentary: The savvy CEO knows cookies can keep shareholders cheery in tough times


When May and June roll around, so does the busiest part of the annual shareholder meeting season.

Although they provide an important chance for investors to question management teams and provide feedback, these gatherings operate in a way that often seems anachronistic in the age of Web 2.0. But they have the flair of a neighborhood council meeting and can provide a laugh.

Here's how these things usually go down: CEOs, chairmen and general counsels sit at a big table on a stage, read administrative instructions from a script, declare a voting quorum present and tell the audience that Accountant XYZ has been confirmed.

Still awake? Aside from fast-moving highlight reels of hit TV shows and movies (underlined with energetic music), there's little real entertainment. Most prepared CEO speeches summarize last year's long-announced earnings and include well-known promises to provide shareholder value.

This year, the management teams at Time Warner, CBS Corp. and Viacom each highlighted the deep recession that has hurt profits and stock prices and talked up a recent stabilization in the ad market. All agreed that their companies and stock will emerge stronger and better positioned than others.

The goal is not to make headlines but to send shareholders home happy.

Shareholders bringing serious proposals to a vote usually have the most interesting comments, though the proposals typically get voted down. The sole exception this year: TW shareholders approved by a 55% majority a proposal that will allow holders of at least 10% of common stock to call special shareholder meetings outside the annual gathering. A "say on pay" proposal that would have given shareholders a nonbinding vote on the compensation levels of top execs fell just short, with 45% approval.

TW shareholders asked serious questions about the conglomerate's planned separation of AOL, the effects of its focus on content businesses and the outlook for the ad market.

Big institutional investors usually couldn't care less about attending these outings, but most small shareholders have different priorities, which mainly revolve around whether cookies and coffee are served. (A few years ago, shareholders were seen sweeping plates of cookies into their bags.)

Most affairs and their catering this time around were simpler, and shareholders noticed. Time Warner and Viacom held their meetings in more intimate settings at their headquarters, rather than the typical dark hotel conference room with the charm of a parking garage. As CEOs applauded their executives' difficult cost-cutting work, attendees seemed to hand out compliments only when they felt they were really due.

In the only shareholder comment at the Viacom meeting, a woman said the highlight reel shown by president and CEO Philippe Dauman was nice, but she felt the pain brought by the company's low stock price and lack of a dividend. But at least Viacom still serves breakfast, she said.

(Viacom sibling CBS scored brownie points -- or was it just cookies and bananas? -- by serving breakfast at its gathering a few days later.)

This year's meetings brought out those old acquaintances, like longtime shareholder activist Evelyn Y. Davis. But why did she play a lead role at the TW and CBS outings but miss Viacom's? Word is that she sold her Viacom shares a couple of years ago, which means Viacom execs didn't get to hear one of her typical introductions presented, as music readers would say, forte: "I'm Evelyn Y. Davis, editor of 'Highlights and Lowlights.' You probably know me from CNBC."

Davis dragged out the meetings with valid governance questions, followed by stories about her ex-husbands and TV appearances.

But thanks to Davis and another shareholder, I am pitching the idea for a new TV show, "The Dating Game: Shareholder Meeting Edition."

At TW's session, Davis lauded chairman and CEO Jeffrey Bewkes for a reason you might not expect. "You are the best-looking CEO we have had," she said. Another shareholder joined Davis in lauding Bewkes as "handsome."

Bewkes' biggest competition apparently comes from CBS and Viacom chairman and controlling shareholder Sumner Redstone. Davis told him at the CBS meeting that he was looking good and asked whether he had a new haircut.

Anyone care for an annual ranking of the sexiest entertainment CEOs?

Davis provided another of this season's funniest moments, accidentally calling Bewkes "Jerry" a couple of times -- maybe lapsing to the old days, when Gerald Levin ran TW and later AOL TW.

As we said, these shareholder meetings can seem a tad anachronistic.