INVESTING: Annual meetings provide insight into companies

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This is the time of year when the vast majority of publicly traded companies issue financial reports and make public presentations to their shareholders. From March to May, companies fill mailboxes with annual reports and proxy statements.

The proxy statement announces the date, time, location and agenda for the company’s annual meeting. For people who enjoy learning about businesses, reading the annual report and proxy materials and then attending the company’s annual meeting is an excellent way to increase your knowledge and experience as an investor.

And while these meetings are generally held for the current shareholders, many companies will allow interested investors who do not own their stock to attend. That being said, if you wish to attend an annual meeting for a company in which you are not a stockholder, you may want to call ahead and make sure you are welcome.

Most annual meetings start with a formal business session, where the proposals listed in the proxy are presented for vote. Often, there are proposals on the agenda made by a shareholder asking for a vote “FOR” a proposal that is in opposition to management which is “AGAINST” the proposal.

These days, shareholder proposals that seek to rein in executive compensation are fairly common. Such proposals get on the proxy by being properly submitted well in advance of the meeting and in accordance with a company’s bylaws. A representative of the shareholder proposal may speak during the meeting detailing the reasons why shareholders should support the proposal. The shareholder votes are then tallied for all proposals and the results announced.

Next, management usually provides an overview of the prior-year results and opens the floor for a question-and-answer session. This part of the meeting gives investors a chance to size up the quality of the management team. Does the company have a clear course of action? What are the positive factors that will enable the company to grow? Are managers candid about their mistakes or do they shift blame elsewhere? Does their presentation come across as sincere? How do they handle the tough questions?

One note of caution: Annual meetings come in all shapes and sizes. My colleague Rich Rockwood once walked into the annual meeting for a small publicly traded manufacturer, and the employees were eating fried chicken. Nevertheless, he had an engaging conversation with the company president. On the other hand, it is possible to travel a considerable distance for a meeting and leave frustrated that management spent little time discussing the company.

Still, if you find learning about different businesses interesting, this is a great time of the year. Within a day’s drive of Indianapolis, there are hundreds of public companies holding meetings. They are free to attend-except for that pesky $80 to fill your tank.

A couple of local companies are yet to hold their meetings. Conseco’s meeting is May 21, and Interactive Intelligence’s is May 30.

Skarbeck is managing partner of Indianapolis-based Aldebaran Capital LLC, a money-management firm. Views expressed are his own. He can be reached at 818-7827 or

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