Symantec Directors: $250,000/Year Not Enough to Log in to Annual Meeting

The shareholders of a public company are sometimes said to own the company. That’s not literally true, for lots of reasons. (See: Do Toyota’s Shareholders Own the Company?) What shareholders really own is the right to part of a company’s profits (if any) after all of its other expenses are paid. At any rate, the fact remains that shareholders are crucially important, and they are in many ways vulnerable. The legal rights of shareholders are relatively few, and relatively weak. That’s what makes corporate governance so important. Shareholders elect the Board of Directors, and the Board of Directors is responsible for hiring the CEO and helping set the overall strategic directo of the firm. For most shareholders, there are precious few ways to interact with, let alone influence, the Board of Directors. The Annual Shareholder Meeting is critical, in that regard.

That’s what makes it so striking when any company degrades its Annual Shareholder Meeting in the way Symantic did this year by switching to an all-virtual, audio-only meeting. See this opinion piece, by Gretchen Morgenson, for the NYT: Questions, and Directors, Lost in the Ether. Check out this juicy bit:

…because the Webcast provided no video, shareholders may not have realized that several directors had not bothered to attend the meeting, even virtually. When asked about directors’ attendance, [Symantec spokeswoman] Ms. Haldeman said 8 of the 11 showed up.

Attending annual meetings seems a pretty basic requirement of a director, don’t you think? Sure, such gatherings may seem a corporate equivalent of root-canal therapy, but a duty is a duty. Directors are paid for their service, after all, sometimes very handsomely. According to Symantec’s most recent proxy materials, directors get around $250,000 a year in cash and stock.

So which directors had neither the time nor the inclination to log on to their computers last Monday to hear from the shareholders they have an obligation to represent? Ms. Haldeman refused to identify those who were AWOL.

Now, it’s worth pointing out that the 3 directors who didn’t “show up” could well have had very good reasons. But if that’s true, Symantic’s shareholders deserve to know it. The little power shareholders have can only be exercised effectively if boards of directors take their duty of accountability seriously.

2 comments so far

  1. Anne H. Wright on

    I agree that there may have been legitimate reasons why 3 of 11 directors didn’t participate in the meeting. But, since the company elected to go with the audio-only format, it needed to deal with the limitations of that format. As a matter of transparency [and common courtesy], online participants should have been advised at the start of the meeting which directors were “present.” Post-meeting, refusing to answer press inquiries re the missing directors’ identities only compounds the poor optics.

    I’m also puzzled why the company, having decided to be the first to conduct an online-only annual meeting, chose to forgo video. Under the circumstances, audio-only doesn’t seem like a the way you’d want go from an investor-relations standpoint.

    • Chris MacDonald on

      Anne:

      Thanks for your comment.

      I agree that the lack of video is puzzling. Admittedly, video presents the possibility of additional technical problems. But this is 2010. Every teenager knows how to do video teleconferencing. And it’s not exactly like Symantec is a stranger to technology.

      I predict things will be different, at next year’s meeting.

      Chris.


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