(Reuters) – A growing number of U.S. companies are holding annual shareholder meetings online to combat the spread of the novel coronavirus. Proponents of “corporate democracy” worry that shareholders will lose the opportunity to meet and challenge management and board members face-to-face.
StarbucksStarbucksCanceled a shareholder meeting scheduled for this month in Seattle. Instead of the usual crowds and free coffee, this year’s event will be a “virtual” meeting on the 18th.
semiconductor maker qualcommQualcommThe general meeting of shareholders on the 10th will prohibit the participation of those who have traveled to countries and regions where the spread of the new crown virus is significant, such as China and Italy. Webcast distribution is also used in conjunction with face-to-face meetings.
Software DevelopmentF5 NetworksFinal Fantasy 4.OShareholders will be allowed to vote electronically for the first time as part of a trial of a virtual general meeting on the 12th. It also held an in-person meeting in Seattle, but issued a health and safety reminder to shareholders.
“This year, companies have been talking about moving to virtual meetings in light of the coronavirus,” said Courtney Aidante of consultancy Teneo.
FacebookFB.Oand Alphabet, Google’s parent companyGoogleas well as the South by Southwest Music and Technology Festival and religious gatherings in churches and synagogues.
Companies hope that online meetings will prevent the spread of the virus and that shareholders who would otherwise not be able to attend will be able to attend. In the United States, most shareholder meetings are usually held in April or May.
Virtual meetings also avoid the risk of companies being sued by investors infected by attending the meeting, said Kai Liekefett, a partner at the law firm Sidley Austin.
But some investors worry the changes will become permanent, reducing shareholders’ access to executives and boards directly.
James MacRitchie, who works on behalf of investors and shareholders, said, “With only virtual meetings, companies can choose only the issues that are convenient for them and avoid protests. This is the situation that shareholders want. No, this is the situation that directors and CEOs want to avoid. Accountable to shareholders.”
Starbucks and F5 declined to comment on concerns that the virtual meeting would make it harder for shareholders to access executives and boards. Qualcomm representatives said they had disclosed in advance on their website that attendees would be asked to fill out a questionnaire about their travel history.
At this stage, only a few companies hold shareholder meetings online. But even before the new virus hit, the numbers had started to rise. According to PwC, 248 U.S. companies held online meetings last year, a 17% increase from the previous year.
Of particular concern are environmental activists who regularly attend meetings of major oil shareholders.Exxon MobilXOM.Women’s clothingand ChevronCVX.NIt has not been announced that the meeting will be held online, but activists fear it will miss a key platform to pressure businesses.
Jonas Kron, director of shareholder advocacy at investment management firm Trillium Asset Management, says: “Management and directors are inherently able to unilaterally control the flow of information and the ability for shareholders to ask questions.”) should be a valuable live forum between management and shareholders Improvised exchange. “
Exxon said it plans to hold its annual shareholder meeting in Dallas this week. Chevron said it “will continue to monitor developments closely.”
Berkshire Hathaway, the world’s largest shareholder meetingBRKa.NThe conference is currently proceeding as planned. The company, led by billionaire investor Warren Buffett, said last week it would hold its annual meeting on May 2 in Omaha, Nebraska. The company’s general meeting of shareholders usually attracts more than 40,000 people, including picnics and 5km marathons, but the scale of surrounding events may be “corrected” this year.
(Reporter Jessica DiNapoli, reporter Svea Herbst-Bayliss)