by Max Brantley
The New York Times examines shareholder unhappiness with high-handed corporate management and notes some cases where stockholders fight back.
Most prominently mentioned is Chesapeake Energy. Its shareholders are meeting today amid a forced ouster of some board members who allowed sweetheart dealing by CEO Aubrey McClendon, whose riches include big shares of the company's gas wells in Arkansas's Fayettteville shale. (In other words, huge chunks of the accounted benefits of the shale are going into a bank in Aubrey McClendon's name.)
Depending on the company, shareholders can only go so far. At Walmart, for example, the Waltons control enough shares to defeat any corporate governance reform measures. But, nonetheless, they've been heard.
Wal-Mart, too, has faced intense scrutiny from prominent shareholders. In the wake of a New York Times article exposing bribery in Wal-Mart’s Mexican arm, the nation’s second largest public pension fund, the California State Teachers’ Retirement System, sued the company and voted against all of its board members. The pension fund railed against “a breakdown of corporate governance.”
While the skirmish has yet to yield changes at Wal-Mart, other embattled companies are making concessions. Chesapeake this week agreed to eject four of its nine board members. The company will replace them with board members handpicked by its two largest shareholders, Southeastern Asset Management and Carl C. Icahn.
UPDATE: More from today on Chesapeake. Selling assets.