(Reuters) – Often rowdy and confrontational, this year’s bank shareholder meetings have so far been brief and uneventful as the annual gatherings move online amid U.S. coronavirus lockdowns.
FILE PHOTO: A Bank of America logo is pictured in the Manhattan borough of New York City, New York, U.S., January 30, 2019. REUTERS/Carlo Allegri
The shift is a welcome reprieve for the senior executives who field combative questioning or disruptive protests from shareholders and activists over business decisions. In 2018, JPMorgan Chase & Co (JPM.N) Chief Executive Jamie Dimon said the demonstrations had made the meetings a “complete waste of time.”
But the change worries advocacy groups and retail investors for whom the meetings offer a rare chance to engage with bank leadership on critical corporate governance issues such as pay, diversity and sustainability.
“It’s the once-a-year opportunity to engage with directors who are overseeing management and… to do so in a public forum where those directors are held accountable,” said Mike Mayo, a Wells Fargo banking analyst whose single Citigroup (C.N) share has allowed him to attend its annual meetings since 2013.
While some outspoken investors recognize the virtual meetings are necessary to protect public health, they say the rules of engagement effectively muzzle them.
At last year’s Citi meeting, Mayo queued for the microphone more than a dozen times to grill its management. This year, he was dismayed the bank would only accept written questions during its webcast meeting on Tuesday, so he skipped it.
“Interactive feedback with voice should be a bare minimum,” he said.
As a key source of financing for industries like firearms, oil drilling, and private prisons, Wall Street banks attract activists looking to sway boards from investing in these clients.
But as meetings go online, activists say management is able cherry-pick or edit questions.
“It’s definitely a concern if shareholders aren’t given time and space on the agenda to ask about critical issues,” said Ben Cushing, campaign representative of the environmental group Sierra Club. He was frustrated when a bank representative summed up his 350-word-long question in fewer than 60 words during Wednesday’s virtual meeting.
“There is usually a lot more back and forth.”
Bank of America (BAC.N) answered all the questions submitted and summarized some to save time, spokesman Jerry Dubrowski told Reuters. Citigroup also answered every question that was submitted for its meeting, spokeswoman Jennifer Lowney said in a statement. BNY Mellon (BK.N), which allowed shareholders to submit questions in advance, did not immediately respond to requests for comment. So far, no major banks have allowed shareholders to call in questions and speak freely with executives.
Even before the coronavirus outbreak, virtual shareholder meetings were growing. In 2019, 248 U.S. companies held virtual meetings in that year’s corporate voting season, up 17% from the year before, according to consulting firm PwC.
Concerned that the virus restrictions will accelerate that trend, activists are thinking about other ways to get attention.
Fair housing advocate and activist financer Bruce Marks said his organization, Neighborhood Assistance Corporation of America, is considering targeting executives at corporate conferences, social settings and even in their neighborhoods.
The banks’ move to virtual meetings, he said, forces activitsts to “find other forums to address those questions where they’re not going to like it.”
Reporting by Imani Moise; Editing by Michelle Price and Aurora Ellis