Even by the standards of a company that normally runs such events on a tight timetable, Weyerhaeuser Co.’s recent annual shareholders meeting was an expeditious affair. Over and done with in 45 minutes, sparse attendance, no controversy, not a single shareholder resolution on the proxy ballot, little in the way of questions from the audience.
You could attribute that to the scheduling of the meeting on the Friday before a three-day weekend, or to the fact that Weyerhaeuser has already released first-quarter earnings, so there was no breaking news to report. Or it could be that Weyerhaeuser is not the size it once was, having pruned away much of its papermaking operations and homebuilding units in recent years. Or that the controversies that enlivened previous meetings have been resolved or faded away.
Or it could be one more piece of evidence to verify a longer, broader trend: the increasing irrelevance of and lack of interest in the practice of convening shareholders physically to hear from the managers of the company they supposedly own and to ratify their representatives supposedly overseeing the management of their investment.
Stock investing has been evolving over the years anyway, in the direction of loosening the connection between individual shareholders and the company they own pieces of. Annual reports and proxy materials come electronically, making it much easier to let such communications pile up unread and ignored. Many investors don’t bother with individual stocks, preferring mutual funds or, at one more level of remove, index funds. Do you own a part of Weyerhaeuser, or Microsoft, Starbucks, Costco or some other Northwest company, even indirectly? Maybe you do, but you wouldn’t know unless you go digging through those unread reports.
When a public company does connect with a shareholder, it’s usually with a large institutional investor, a fund manager, an insurer or investment bank holding a huge block of shares whose representatives usually don’t see the need to attend a shareholders meeting. Most voting is done in advance and electronically; although there have been a few holdouts in recent years who cast their ballots during the meeting, there didn’t appear to be any this year at Weyerhaeuser.
All of which makes the annual shareholders meeting an increasingly anachronistic affair, albeit a legally required one. In theory the whole thing could be Skyped at much less bother and expense or done away with completely.
But since it is required, some companies have transformed the annual meeting into a marketing event and pep rally. Starbucks meetings are famous for running on for multiple hours, what with big-name entertainment performing musical numbers. At this year’s event at McCaw Hall in Seattle, Starbucks passed out samples of food it plans to introduce at its stores. It also reported actual news about its operations.
Truck manufacturer Paccar isn’t known for splashy marketing on the order of a Starbucks, but it did some promotion of its own this year when it held its annual meeting in a curtained-off section of its Kenworth manufacturing plant in Renton. It shut down the assembly line for a day, and let meeting attendees take a self-guided tour (with employees stationed along the route to explain the steps in building a truck), all to show off what a modern manufacturing operation looks like and the technology that goes into its products.
The annual meeting also can be an opportunity to showcase a star CEO dispensing wisdom and insights; that, along with the food and other giveaways, is what draws people to a shareholders meeting featuring a Warren Buffett, a Howard Shultz or a Jeff Bezos.
And it can be used as a forum for various interest groups to promote their causes and get some publicity.
But there is one still useful function of an annual meeting for shareholders. It’s the one occasion they have to directly address management and pose questions and criticisms), even if their holdings amount to a few hundred shares rather than a few million.
That is, if that matters to them. At Paccar, shareholders asked questions on topics ranging from natural-gas trucks to whether the company would consider selling its Bellevue headquarters building.
One Weyerhaeuser shareholder did ask a question about dividend payout policy. But no one asked, for example, about the planned sale of the landmark Federal Way building where the meeting was taking place and the planned move to Seattle.
(For the record, in a press Q&A afterward, CEO Doyle Simons said the company has received several serious queries, and it is now going through pre-qualifying of potential bidders.)
Annual meetings can still generate some drama, as occurred recently with a fight between management and an investor group for control of DuPont. Absent such a confrontation in this region, the annual meeting is likely to evolve further, either as an entertainment extravaganza or as one more quaint corporate custom whose point and usefulness has been long forgotten.