Little may be the wrong word to describe investors with hundreds of thousands of dollars. But when a massive corporation calls for a meeting with shareholders, there has to be some way to cut down the numbers and fit everyone in one room.
In the fall, Pfizer will meet with its biggest institutional shareholders who collectively own 35 percent of Pfizer to confer on governance policies including executive compensation. This is the first time a company has proprosed regular meetings between a board and institutional investors expressly to discuss governance issues.
‘We believe this meeting with our shareholders on our governance and compensation policies will give us valuable insights and help us maintain the highest standards in corporate governance,’ said lead director of the Pfizer board Constance Horner in a press release, adding, ‘I am personally committed as the chair of the governance committee, as are the chairs of the compensation and audit committees, to attend these meetings and listen to shareholder viewpoints on governance and executive compensation.’
Though the meeting indicates a move toward greater shareholder responsiveness, it could potentially alienate investors not in attendance. The Corporate Governance website noted that Reg FD stipulates that investors be deemed equal in terms of getting material information. So Pfizer will need to make sure to provide ‘broad, non-exclusionary distribution’ of information when conducting these meetings. Corporate Governance suggested webcasting the meetings.
Though Pfizer has been at the forefront of governance in declassifying their board, adopting majority voting and making disclosures ‘understandable to investors,’ Corporate Governance says they haven’t yet responded to the call for webcasting the proposed meetings.
By Janine Armin
Corporate Secretary magazine