Smulyan nemesis passes on Emmis meeting

February 12, 2007


Emmis Communications Corp. CEO Jeff Smulyan won’t have to face his nemesis—Elkhart-based investment manager Frank Martin—when the company holds its annual meeting tomorrow.

Martin has submitted a proposal on the meeting agenda that would do away with a special class of stock that gives Smulyan 60 percent of the company’s voting power, even though he holds less than 20 percent of its shares.

Martin, whose Martin Capital Management owns more than 8 percent of the company’s Class A stock, said he’s not going because he sees no reason “to get [Smulyan] exercised ... and give the impression I was going to raise a ruckus at the meeting.”

The measure has no chance of passing. That’s because it would require Smulyan’s approval, and he says he will oppose it.

The extra voting power for Smulyan is one of several major flaws with Emmis’ corporate governance, Martin said. In the shareholder proposal, Martin wrote: "Such disparity in voting power and economic interests becomes contentious when it provides ... for the perpetual entrenchment of a manager whose record may not otherwise warrant such a privileged 'untouchable' status."

Martin says that instead of attending the meeting himself, he'll be represented by Dennis Blyly, a partner with Martin Capital Management.

That doesn't mean Martin is turnign conciliatory, however. "I am ashamed...to be known as a shareholder," he said. "I am tired of being asked the same question from our clients: 'How could you be so stupid to own a company that is governed like Emmis?"

Emmis' annual meeting begins at 2 p.m. tomorrow at the company's headquarters on Monument Circle.

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