Traders and the media have assumed a path-breaking turn in the ways and mores of the stock market: shareholders are going to rise up and be heard! Some have gone so far as to term this the Shareholder Spring, a reference to last year's Arab Spring, which upended old and deplorable regimes.
Well, not exactly. In fact, they are all probably having a pretty relaxed Memorial Day. This week will see Wal-Mart's (WMT) shareholder meeting. It's their 50th anniversary and the meeting was expected to be light and airy, all celebratory and little cause for concern, until the recent Mexico bribery scandal. Now: management is expected to face hellfire and damnation from shareholders.
But hold the hyperbole. When Wal-Mart emerges from this anticipated shareholder revolt whole, the entire concept of this Shareholder Spring will be reevaluated -- and it's about time.
Last month, Citigroup (C) shareholders did slap down a $15 million pay package for chief executive Vikram Pandit, but the rebuke was isolated. Despite the public outrage and efforts from groups like Occupy Wall Street, the well-heeled institutional investors who run pension and mutual funds and hold the most voting power, tend to be passive, if not secret advocates of management power and indulgence.
Here, though, a majority of shareholders voted against the Citigroup plan, but it was only a relatively narrow majority (55 percent, no landslide) and Citigroup is a pretty singular entity.
As if to prove it, only weeks later -- and after announcing a stunning 2 billion buck loss -- JP Morgan (JPM) shareholders all but shined management's shoes. They voted down all independent reform proposals and played 'yes man' to management initiatives in what effectively turned into a coronation for CEO Jamie Dimon.
Some Shareholder Spring. Arabs faced bullets; shareholder couldn't stand up to Dimon's charm.
Moreover, the Wal-Mart issue is the wrong time and wrong place. Wal-Mart is doing well and the scandal, as it were -- doling out bribes for land use in foreign territories -- is too commonplace to stand out and sustain outrage. "Casablanca's" Captain Renault might feign `shock, shock' at such practices, but the high rollers who hold the voting power won't, dampening further this concept of shareholders in open, active and effective revolt.