More Company Meetings Ask Investors to Tune In, Not Show Up

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By Andrea Vittorio

Comcast Corp.’s shareholder meeting lasted just 25 minutes this year. It usually takes about an hour.

What changed? Comcast switched last year from an in-person gathering to a virtual-only version.

The nation’s largest cable company isn’t alone. About 5 percent of S&P 500 companies, including Ford Motor Co. and Duke Energy Corp., have moved their annual meetings online so far this year, up from 3 percent in 2016, according to the latest tally by Ernst & Young. Another 16 percent of companies held an in-person meeting in 2017 with an audio or video component.

Companies say it saves time and costs and lets more shareholders take part if they don’t have to travel to a meeting site. “As physical attendance at meetings has dwindled, web participation has grown significantly, and has proven to be substantially more popular and effective at enabling stockholder participation,” Intel Corp., one of the first to go virtual, says in its 2017 proxy statement.

The small but growing trend has concerned corporate governance hawks, who say meetings that are exclusively virtual deny shareholders the opportunity for face time with the board and management.

“Intel’s approach to stockholder engagement is that it is a year-round process,” not limited to the once-a-year event, a company spokeswoman told Bloomberg BNA.

Investors Wary

For smaller investors who aren’t part of companies’ regular outreach efforts, the annual meeting may be their only chance to interact with corporate representatives and “really look them in the eye and ask tough questions,” said Jamie Smith of EY’s Center for Board Matters. Smith said in-person meetings also allow shareholders to see how many people have lined up to ask questions and watch how companies respond to questioning. “There’s concern a lot of that accountability gets lost,” she told Bloomberg BNA.

At Comcast’s June 8 meeting, investors asked twice about why it won’t hold a hybrid meeting that’s both virtual and in-person or why it won’t at least stream a video showing key company representatives in attendance. “We’re always evaluating the response from our shareholders,” Comcast CEO and Chairman Brian Roberts said during the Q&A session. But, in the company’s view, the current format is efficient and easier for shareholders to participate in, he said.

One of those questions came from an attendee of Comcast’s previous in-person meetings: Thomas McCaney, associate director of corporate social responsibility at the Sisters of St. Francis of Philadelphia. The religious order is among investors who have tried putting the issue of meeting format up for a vote of their peers at Philadelphia-based Comcast and other companies. The Securities and Exchange Commission has blocked such proposals, leaving it up to companies to decide whether meetings are in-person, online, or both.

EY says companies considering virtual-only meetings should think through whether certain factors, such as a controversial proposal or a “vote no” campaign against directors, might create the appearance of insulation. Companies could also assuage investors by making their virtual meetings more closely resemble in-person gatherings.

“Even though they can address everything virtually that they can in-person, there are certain things that just can’t be experienced,” like shaking hands with a CEO or talking with directors, McCaney said. “That’s goodwill that can’t be bought,” he told Bloomberg BNA.

To contact the reporter on this story: Andrea Vittorio in Washington at avittorio@bna.com

To contact the editor responsible for this story: Yin Wilczek at ywilczek@bna.com

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