Monday, April 14, 2008

Big Bedfellows

Last week found me lurking in the carpeted hallways of D.C.’s Capitol Hilton, press pass hanging from my neck. The occasion was the Council of Institutional Investors (CII) spring meeting, entitled “Thinking Globally.” I assume CII printed its glossy brochures before subprime hell broke loose, and it was too late to re-name the event "Grimacing and Clutching a Bottle of Maalox.”

This seemed like your typical corporate conference: the suits gray, the ballroom chandeliers glitzy, half the audience checking Blackberries as the speakers droned on. So I was startled when a CII board member from a union pension fund mounted the dais, along with a half-dozen hotel workers, to praise the Hilton’s unionized status and remind the crowd to tip generously. People applauded politely, but it was clear not every institutional investor in the room was pleased with the guy's "rah-rah unions" message.

The incident reminded me that people - and yes, bloggers are people too - like to talk about "shareholders” as if they were a homogeneous group when, really, we all know that's silly.

Big shareholders, for one thing, command more respect than little ones. At the conference, SEC Commissioner Kathleen Casey encouraged institutional investors to huddle with corporate managers. (I note that Kathy, in person, is a striking blond who clearly knows her way around a makeup counter, and also that her speech, oddly, isn't yet posted on the SEC website.) And former Pan Am CEO Thomas Plaskett—a guy who’s sampled the doughnuts served in the boardrooms of 12 different companies—had a similar message; disdaining formal “say on pay” resolutions, he suggested those in the room simply “pick up the phone" and call directors to chat about executive compensation.

Some worry that companies, as they make nice to big shareholders in ex parte encounters, foster what SEC Commissioner Atkins called “tyranny of the minority.” Institutional investors, after all, don't have an obligation to represent the concerns of retail shareholders, who are probably more likely to get an audience with the Pope than to get one with a comp committee chair at a Fortune 500 company.

Anyway, I sure hope no CII members directed their anti-union sentiments at the Hilton's unionized chambermaids by leaving soggy towels on the bed.