1. Don't Rock the Vote, BabyYou 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) 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, FranklinFormer Fannie Mae ( FNM) 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
3. Me and Edward, Edward Jones -- We Got a Thing Going OnThe 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 UBSOur 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,
|A Perfect Score |
UBS makes it easy
5. Bud Nips It in the BudYou 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 Anheuser-Busch ( BUD) 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 SABMiller. In response to A-B's complaints, Viacom's ( VIAB) CBS pulled some of the Miller ads earlier this month, Reuters reported.
|A Frosty One |
Bud puts a chill on Miller's claims