1. Don't Rock the Vote, Baby

You always have to be on the lookout for shareholder democracy. Otherwise, that sinister scourge could insinuate itself into your company and -- horrors! -- actually take hold.

Yep, that's what we thought this week when we heard the latest news about a shareholder resolution proposed for Disney's (DIS) - Get Report annual meeting next year.

Mickey Mouse Democracy
Can't be too careful

Last month, you see, activist Disney shareholder groups got the blessing of staffers at the Securities and Exchange Commission to submit for vote a resolution asking Disney to enable certain shareholders, under certain circumstances, to easily nominate a limited number of independent directors for election to the board.

Lest democracy run amok, the resolution -- somewhat similar to proposals already kicking around -- had a number of limitations that would have prevented Shareholders Gone Wild madness. To make a nomination, the shareholder or shareholder group would have had to hold at least 5% of stock for two years. And, given Disney's 11-member board, the shareholder slate -- which would be running, presumably, against the board's full slate -- would be limited to two directors.

Well, it seems a little bit of democracy is still too much. As The Wall Street Journal reported Wednesday, after some complaining from Disney, the SEC staff reversed itself and gave Disney the green light to withhold the resolution from a shareholder vote.

Whew! That was close. If the SEC had let that through, who knows how many more dominoes would be knocked over? Pretty soon, U.S. citizens would start asking for the right to nominate presidential candidates. Lord knows where that would lead us.

2. It's All About the Benjamins, Franklin


Fannie Mae


CEO Franklin Raines has a minor disagreement with the mortgage giant, we learned Monday.

That should be the least of his worries.

Raines announced his retirement Dec. 21, soon after

the SEC demanded Fannie Mae restate its books for the past few years. The correction is expected to erase $9 billion in profit from Fannie Mae's books.

But exactly when Raines' retirement takes effect is a matter of dispute. The company says it happened Dec. 21, the day Raines effectively left the building. Raines says his retirement actually will take place six months from now.

What's at stake? Oh, somewhere north of a half-million. According to a Fannie Mae filing at the SEC Monday, should Raines' scenario prevail, he'd be due $600,000 in pay for the next six months. And his lifetime annual pension, which Fannie Mae calculates to be $1,372,716, would be nudged upward to $1,395,600 instead. Every little $22,884 helps, you know.

What isn't in dispute is that Raines is supposed to have a lot more coming to him: millions of dollars' worth of additional stock options, performance-based equity grants, bonuses, deferred compensation, life insurance premium payments, and medical and dental coverage for Raines, his wife and dependents under age 21.

Oops! We almost forgot the annual $10,000 in charitable matching gifts!

Whether he can collect all that is another matter, though. As Fannie Mae said Monday, the Office of Federal Housing Enterprise Oversight -- even though it approved Raines' termination benefits in November -- requests Fannie Mae not pay any termination benefits to Raines until it has a chance to further review them. OFHEO says it's concerned about whether there have been "enhancements" to the benefits since the package was agreed upon. There's also that little public relations problem of a vast payout to a guy on whose watch Fannie Mae may have overstated its profit by $9 billion.

So we don't expect Raines will be seeing his retirement money -- not to mention that $600,000 base pay -- anytime soon. Dick Grasso -- another chief of a semipublic institution

who left under a cloud and whose retirement package aroused outrage -- has been fighting for his retirement kitty for the past 15 months but looks no closer to getting his hands on the dough.

You know, if the two of them ever get together to commiserate, we at the Research Lab promise to pay their bar tab. We understand how tough it can be for seniors if you don't receive your monthly check.

3. Me and Edward, Edward Jones -- We Got a Thing Going On

The folks at Edward Jones tell the truth and nothing but the truth. It's the whole truth that they seem to have had a little trouble with.

As we learned from a series of recent settlement agreements with the SEC, the

New York Stock Exchange

and the

National Association of Securities Dealers

, the St. Louis-based brokerage firm has been doing a big business selling mutual funds to its clients.

While Edward Jones can sell clients mutual funds from 240 different families, historically 95% to 98% of its sales come from seven "preferred" families, according to the NASD. As Edward Jones has told its clients, the firm likes to focus on a handful of funds "that share," says EJ, "our same commitment to service, long-term investment objectives, and long-term performance."

Sounds great. Except that Edward Jones forgot to tell its clients another quality that made some of those families preferable: their habit of paying money to Edward Jones. Sharing revenue from Edward Jones-initiated sales, according to the SEC, "was a material factor, among others, in the selection of at least two of the preferred families."

There were a few other relevant things Edward Jones forgot to tell clients. For example, they made big money for brokers. As one executive pointed out to EJ's investment representatives, selling the preferred funds instead of the nonpreferred ones could add a quarter-million to an IR's paycheck over 10 years.

And, for a 2002 sales contest in which IRs competed for vacations to exotic locales, Edward Jones execs changed the usual rules on such contests so that only certain funds in the preferred families counted toward the trip. If an IR recommended funds that weren't on the preferred list but -- dare we say it -- might be better for clients, the sales didn't count.

To which we say: Great job, guys. We used to think that the mutual fund industry had exhausted all the bad press it could generate. But the hits just keep on coming.

4. High Fives All Around for UBS

Our memory of UBS' 32nd annual Media Week Conference is that we had a fine old time. But UBS isn't taking any chances.

See, last week UBS emailed us and other conference attendees a request for feedback on the conference, which took place Dec. 6-9 and featured folks like

Warner Music Group

CEO Edgar Bronfman,

who discussed his intriguing vision of the future of the music business.

A Perfect Score
UBS makes it easy

All we had to do for the UBS feedback request was fill out a questionnaire in which we ranked the conference on about a dozen different criteria. How good, for example, were the speakers? What was the quality of our informal interactions with UBS salespeople? How satisfactory was the conference overall? On each particular issue, we could electronically mark our rating on a scale of 1 (meaning "poor") to 5 (meaning "excellent").

Except if we didn't feel like clicking on a number, we didn't have to. See, UBS already had filled out the form for us, rating UBS an excellent 5 on all of the quality-of-conference questions. All we had to do was click once to submit the form. Which is exactly what we did, giving UBS a rating of uninterrupted 5s.

Usually, we're impressed with UBS' research, but this time around we'll make an exception. To say that survey's presentation could influence its results is sort of like saying that your finger could get squashed if you hit it with a sledgehammer.

5. Bud Nips It in the Bud

You know, we usually are staunch defenders of truth in advertising. But when it comes to truth in beer advertising -- well, we're willing to cut people a little slack.

Which is why we're much amused by the outraged pronouncements emanating from


(BUD) - Get Report

of late. On Christmas Eve, the brewing conglomerate proudly announced that rival

Coors Brewing

had pulled TV ads for its low-carb beer Aspen Edge. Anheuser-Busch had challenged those ads with the networks, saying Coors had made "unsubstantiated taste preference claims" in comparisons to A-B's own low-carb beer, Michelob Ultra.

("We have study results that substantiate all claims made in our Aspen Edge advertising, and Coors stands by those results," says a Coors spokeswoman. "Rather than become embroiled in a pointless and distracting debate with A-B, we elected to pull the ads from rotation.")

The dispute comes in the wake of another advertising battle A-B is waging, this one against 11 ads aired by


. In response to A-B's complaints,


(VIAB) - Get Report

CBS pulled some of the Miller ads earlier this month,



A Frosty One
Bud puts a chill on Miller's claims

In A-B's Christmas Eve announcement, you could hear the quiver of outrage in a statement from an A-B executive: "Competition is the lifeblood of American business," sales and marketing chief Michael J. Owens said, "but companies like Coors and SABMiller are now on notice that we will fight for truth in advertising."

Ah. Truth in advertising. That's rich. This from a company that made the claim, never quite substantiated, that a bull terrier named Spuds MacKenzie had a taste preference for Bud Light. (This from a company that, in fact, concealed the fact that the animal playing this party-guy dog was actually a gal.)

But you don't need a spokesdog to arouse our skepticism. We start questioning the veracity of beer ads the moment they hint that the authenticity of friendships has some sort of connection to the brand of beer that pals drink. So lighten up, A-B. Don't go foaming at the mouth.

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