By Marek Fuchs
You'd be crazy to expect anything to come out of the Google (GOOG) shareholder meeting on Thursday, right?
Well, be careful whom you’re calling crazy.
Yes, the bulk of modern shareholder meetings are pro-forma. They tend to be scripted to within an inch of their lives, a mere formality, much ado about nothing.
Google's annual powwow, scheduled for 5 p.m. ET at the company’s headquarters in Mountain View, California, offers, on the surface, even less chance for surprise. Its insiders hold a veritable stranglehold on voting rights, which means shareholder proposals are generally dead on arrival.
Keep an eye out
Still, investors should be careful to keep an eye out for the unexpected. Trap doors exist, even at annual meetings. Last year, for example, Google CEO Larry Page sat out his company's meeting due to what was termed a voice condition. His unanticipated, health-related absence - and the vague way in which it was explained - was greeted by some in the media with a bit of Steve Jobs-inspired worry.
In fact, recent history has been rife with surprise and intrigue at these normally staid, paint-by-the numbers shareholder meetings. As we head toward Google’s meeting and the bulk of media and traders go into auto-think mode, it’s important to remember:
Last month at JP Morgan’s (JPM) shareholder meeting, CEO Jamie Dimon defied expectations in a big way regarding a referendum designed to split his job titles, which in all probability would have shamed him into resigning. He was expected to survive the vote but the buzz ahead of the meeting was that the margin could be narrow. Instead – much to everyone’s surprise – Dimon managed a true victory, with only one in three shareholders voting to split the CEO and shareholder roles.
Earlier this year anticipation was also high that activist investor David Einhorn would stand up at Apple’s (AAPL) shareholder meeting and shout to the skies that they should deploy their cash. Einhorn, however, was a no-show and the meeting ran counter to expectations. Instead of a showdown, it was a snooze – a surprise to the opposite side.
Similarly, in 2012, there was a good deal of media anticipation that Wal-Mart’s (WMT) annual meeting would feature a meaningful confrontation about its recent bribery scandal. Instead, the meeting was more focused on host Justin Timberlake and other present celebs than bribery, and the headlines that followed read along the lines of what The New York Times ran: The Annual Shareholders’ Meeting for Wal-Mart, Like Its Stock, Is Buoyant.
The Buffett factor
Shareholder meetings are often filled with the coupon-clipping crowd but few expected an octogenarian named Warren Buffett to show up at Coke’s (KO) annual meeting earlier this spring to ask questions. And turnabout is (sometimes) fair play. Berkshire Hathaway’s annual meeting (BRK-A, BRK-B) is normally a celebratory spectacle, but noted Buffett bear Douglas Kass asked pointed questions this year, accusing the company of hunting “elephants” instead of “gazelles,” or taking positions too big to move their stock.
"You haven’t convinced me to sell the stock yet, Doug, keep trying,” a very unruffled Buffett replied. To his credit, Buffett actually invited Kass to give the Berkshire bear perspective, but other agitators – both small-time activists and high-powered investors – might simply crash.
As for Google, there has been quite a bit of news swirling around the company of late. The mystery of Page’s no-show last year was only recently revealed: he apparently has vocal chord nerve damage, likely resulting from a virus. Outside of a scratchy voice, he’s going to be fine.
Google’s YouTube division also started a paid subscription pilot program that could fall into oblivion or take a pipe wrench to the notion of free video content, and help the company compete on an equal footing with Netflix (NFLX.) There’s probably no middle ground with the plan to charge monthly sums for subscriptions to various sports and educational YouTube channels. Also revolutionary - or an idea in need of reconditioning - is Google Glass, wearable technology that, so far, seems to elicit a "love it or REALLY hate it" response. And Google had hardly sent out a handful of the product before they had to ban their first porn app.
Meanwhile, like some ancient stream, Google’s stock price just keeps rolling. It traded over $900 through a chunk of May, with $1,000 the latest word in Wall Street price target.
And let's not forget Google's upcoming portrayal on the big screen, with the upcoming comedic Vince Vaughn/Owen Wilson vehicle "The Internship."
So from what point of this year’s annual meeting are the surprises possibly going to spring? Well, the nature of surprises is that they tend to be hard to pinpoint ahead of time. More than anything, this is a call to pay attention for whatever might pop up. At 2010’s annual meeting, amid the rote stump speeches and other boilerplate dialogue, Google made bumptious comments about display advertising becoming, as then-CEO Eric Schmidt put it, “our next big business.” That proved prescient, and any similar comments about mobile - which has been by turns promising and problematic for Google - would feed the market’s expectations.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers before becoming a journalist who wrote The New York Times' County Lines column for six years. Fuchs speaks regularly on business and journalism issues at venues ranging from annual meetings of the Society of American Business Editors and Writers to PBS to National Public Radio. His recent book, "Local Heroes: Portraits of American Volunteer Firefighters," earned widespread praise. He is on the writing faculty at Sarah Lawrence College. When Fuchs is not writing or teaching, he serves as a volunteer firefighter. You can contact him on Twitter: @MarekFuchs.
- Warren Buffett
- shareholder meeting