Shareholder rebellion

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Shareholder rebellion occurs when the owners of a corporation work to throw out management or oppose their decisions. Shareholder rebellion may occur at a annual general meeting or through a proxy battle. Shareholders may also threaten to collapse a firm's stock price through concentrated selling. [1] In 1998, the Rockefeller family led a shareholder revolt against Exxon over its climate change policy. [2] In 2005, Michael Eisner retired after Walt Disney's nephew, Roy Disney, led a shareholder revolt, claiming Eisner was a micromanager who had caused a creative brain drain. [3] In 2010, British Petroleum [4] and Shell faced a shareholder revolt over their Canadian tar sands policy. [5]

Annual general meeting A decisive status meeting held once per year

An annual general meeting is a meeting of the general membership of an organization.

The Rockefeller family is an American industrial, political, and banking family that owns one of the world's largest fortunes. The fortune was made in the American petroleum industry during the late 19th and early 20th centuries by John D. Rockefeller and his brother William Rockefeller, primarily through Standard Oil. The family has had a long association with, and control of, Chase Manhattan Bank. As of 1977 the Rockefellers were considered one of the most powerful families, if not the most powerful family, in the history of the United States. The Rockefeller family originated in Rhineland in Germany and family members moved to the New World in the early 18th century, while through Eliza Davison, John D. Rockefeller and William Rockefeller Jr. and their descendants are also of Scotch-Irish ancestry.

Exxon American chain of gas stations and a brand of motor fuel and related products

Exxon is the former brand name of oil and natural resources company Exxon Corporation, prior to 1972 known as Standard Oil Company of New Jersey. In 1999, Exxon Corporation merged with Mobil to form ExxonMobil. The Exxon brand is still used by ExxonMobil's downstream operations as a brand for certain gas stations, motor fuel and related products. Standard Oil Company of New Jersey was one of the Seven Sisters that dominated the global petroleum industry from the mid-1940s to the 1970s.

Contents

Recently, shareholder rebellions have occurred over the issue of executive compensation at Cable and Wireless [6] and Shell; [7] Shell in response unveiled a plan to curb executive compensation and bonuses. [8] According to some analysts, institutional shareholders have been lax about holding management accountable because they were concentrating on picking correct stocks rather than protecting their interests in the stocks they owned. [9] With many firms showing poor performance, shareholder revolts are becoming more common. [10]

Executive compensation or executive pay is composed of the financial compensation and other non-financial awards received by an executive from their firm for their service to the organization. It is typically a mixture of salary, bonuses, shares of or call options on the company stock, benefits, and perquisites, ideally configured to take into account government regulations, tax law, the desires of the organization and the executive, and rewards for performance.

Cable & Wireless Worldwide former British communications operator

Cable & Wireless Worldwide PLC was a British multinational telecommunications services company headquartered in Bracknell, United Kingdom. It was formed in 2010 by the split of Cable & Wireless plc into two companies, the other being Cable & Wireless Communications.

History

On 24 January 1609, Amsterdam-based businessman Isaac Le Maire filed a petition against the Dutch East India Company (VOC), marking the first recorded expression of shareholder activism or shareholder rebellion. [11] [12] [13] [14] [15] [16]

Isaac Le Maire Dutch merchant

Isaac Le Maire was a Walloon-born Dutch entrepreneur, investor, and a sizeable shareholder of the Dutch East India Company (VOC). He is best known for his constant strife with the VOC, which ultimately led to the discovery of Cape Horn.

Dutch East India Company 17th-century Dutch trading company

The Dutch East India Company, officially the United East India Company was an early megacorporation founded by a government-directed amalgamation of several rival Dutch trading companies (voorcompagnieën) in the early 17th century. It was established on March 20, 1602, as a chartered company to trade with Mughal India during the period of proto-industrialization, from which 50% of textiles and 80% of silks were imported, chiefly from its most developed region known as Bengal Subah. In addition, the company traded with Indianised Southeast Asian countries when the Dutch government granted it a 21-year monopoly on the Dutch spice trade. It has been often labelled a trading company or sometimes a shipping company. However, VOC was in fact a proto-conglomerate company, diversifying into multiple commercial and industrial activities such as international trade, shipbuilding, and both production and trade of East Indian spices, Formosan sugarcane, and South African wine. The Company was a transcontinental employer and an early pioneer of outward foreign direct investment. The Company's investment projects helped raise the commercial and industrial potential of many underdeveloped or undeveloped regions of the world in the early modern period. In the early 1600s, by widely issuing bonds and shares of stock to the general public, VOC became the world's first formally listed public company. In other words, it was the first corporation to be listed on an official stock exchange. It was influential in the rise of corporate-led globalisation in the early modern period.

See also

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Michael Eisner American business executive

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Roy E. Disney Senior executive for The Walt Disney Company

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References

  1. John C. Coffee, Jr. (October 1991), Liquidity versus Control: The Institutional Investor as Corporate Monitor, 91, Columbia Law Review, pp. 1277–1368, JSTOR   1123064
  2. Clark, Andrew (19 May 2008). "Exxon facing shareholder revolt over approach to climate change". The Guardian. London.
  3. Lubove, Seth; Fixmer, Andy (13 March 2010). "Brain-eating zombies invade Disney in Iger plan to win boy fans". The Seattle Times.
  4. http://priceofoil.org/2010/02/08/now-bp-faces-shareholder-revolt-over-tar-sands/
  5. MacAlister, Terry (18 January 2010). "Shell faces shareholder revolt over Canadian tar sands project". The Guardian. London.
  6. Wachman, Richard (11 March 2010). "Cable & Wireless facing shareholder revolt over executive pay". The Guardian. London.
  7. "Shell Shareholder 'Rebellion' Leads To New Limits on Executive Pay, Bonuses". HuffPost. 16 February 2010.
  8. https://finance.yahoo.com/news/Shell-unveils-plans-to-curb-apf-853987459.html?x=0
  9. "Time for a shareholder revolt". Reuters. 27 October 2009.
  10. Davey, Jenny; Ashton, James (10 May 2009). "To arms investors Its a shareholder revolt". The Times. London.
  11. Frentrop, Paul (2009). The First Known Shareholder Activist: The Colorful Life and Times of Isaac le Maire (1559–1624), in Frentrop/Jonker/Davis 2009, 11–26
  12. Frentrop, Paul; Jonker, Joost; Davis, S. (ed.), (2009). Shareholder Rights at 400: Commemorating Isaac Le Maire and the First Recorded Expression of Investor Advocacy (The Hague: Remix Business Communications, 2009)
  13. Gelderblom, Oscar; De Jong, Abe; Jonker, Joost (2010). Putting Le Maire into Perspective: Business Organization and the Evolution of Corporate Governance in the Dutch Republic, 1590–1610, in J. Koppell, ed., Origins of Shareholder Advocacy. (New York: Palgrave Macmillan)
  14. McRitchie, James (6 October 2011). "Will UNFI Go Virtual-Only Again? Not if Shareowners Just Say No". CorpGov.net. Retrieved 28 December 2016.
  15. Mueller, Dennis C. (ed.), (2012). The Oxford Handbook of Capitalism, p. 333. (New York: Oxford University Press)
  16. Hansmann, Henry; Pargendler, Mariana (2013). The Evolution of Shareholder Voting Rights: Separation of Ownership and Consumption. (Yale Law Journal, Vol. 123, pp. 100–165, 2014)