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.
From Goldman Sachs (GS) to Pfizer (PFE) to Alcoa (AA), they must be shaking in their shoes, right?
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.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
