2009 will be an interesting year. On the negative side, the financial markets will continue to melt down, political crises around the world will continue to explode and Mother Nature will undoubtedly deliver us some interesting surprises. On the positive side, we get a new president in a few weeks with a myriad of positive changes.
For the couch potatoes out there, surveying these changes will be a spectator sport on par with the World 
Series. For those of you more inclined to action, there is an opportunity to jump into the melee and start swinging. No, not a bar fight, I mean …
VOTE!
What? You thought you voted for president in November. Yes, the presidential elections are behind us but that doesn’t mean that we can’t still vote for something or somebody that’s as directly relevant in our lives.
That opportunity will present itself to America’s individual shareholders this spring during the time known as Proxy Season.
Before you fall off to sleep dear reader, consider this as you toss out the blue plastic envelopes containing your proxy materials: In less time than it takes to scan the stock tables in the newspaper to see how much your investments plunged TODAY, consider checking off a few boxes on your proxy ballot, sticking the ballot in a postage paid envelope and dropping it in the mail. You get your ballots electronically you say? Even better. Click through to the ballot screen, check off the boxes and voila! You are done.
Since most of you can’t get off your petards and do what’s right, why change now?
Because if you don’t do something now, your investments will continue to plunge and your taxes will be handed over to incompetent managers who will continue to line their pockets. You’re fine with that? No problem, here’s a link to a terrific blog about kittens. Enjoy.
However, if you want to change things, it’s time for you to get up and vote.
My Voting Recommendations for 2009
Here is what I think investors should do in 2009:
- Vote out boards of directors. If a company performed badly this year (in relative terms since in absolute terms this covers just about every public company), vote against all of the directors.
- Vote against all pay packages. Enough said on this issue, just do it.
- Get rid of the outside auditors. These clowns wouldn’t know risk if it were an elephant in their bathrooms.
These are bold moves for shareholders. I know this sounds too simple given all of the complicated data presented to you when you get your proxy. But if you begin to pay attention to the issues, your ham fisted voting approach my become a but more refined.
Am I the Only Idiot Who Does Not Vote?
No, I’m afraid not – you are not as “special” as you might have thought. The short yellow school bus is full of folks just like you.
In a survey of 92 firms that held their annual meetings in 2008, the average participation among “retail” shareholders – individuals, as opposed to institutions – dropped more than 75 percent from the previous year, according to the New York Times. Only 4.5 percent of individual investors voted at firms that used the electronic proxy in late 2007 and early 2008, down from 19.2 percent participation in late 2006 and early 2007.
Moreover, this is not a small, disaffected group of investors. According to an annual study published by the Securities Industry and Financial Markets Association, 54.5 million households participated in the financial markets through equity or bond ownership in early 2008. This represents 47 percent of U.S. households.
Okay, so you are not alone in your investor lethargy. That said, if you are an angry investor, perhaps now is the time to dig through your trashcan and pick out that proxy you just tossed.
So what do you do?
Here is your one opportunity to offer your own views on the management of the companies you own in your 
stock portfolios.
- Pissed off that the CEO got millions in compensation while the share value plunged? Vote AGAINST the board of directors. After all, they approved the CEO’s pay package.
- Irate with the fact that that pesky business strategy somehow eluded the bean counters at the company? Vote AGAINST approving the outside auditors at the company.
- Incredulous that the company management would consider granting ANY stock options for its executives? Try voting NO against all pay plans.
Here is my point. If you are really upset with the companies you own, simply vote against all proposals recommended by management. I realize this grossly oversimplifies the complexities involved in the voting decision. But remember, the proxy voting process was designed to make it overly complex for investors to sort out the voting decision process. In the arcane proxy voting process, a ballot not received means that a company’s management has one less shareholder to worry about and be accountable to at its annual meeting.
The time to start voting your proxies is now. The financial crisis presents a unique opportunity for all investors to take action and make change.
Do you have specific questions about the nuts and bolts of specific issues at specific companies? Let me know what those questions are. Either post a comment to this article or email me at jrichardson@jmr-financial.com and I will try to respond. I look forward to hearing from you.
far right, in attacking the auto industry bailout and more importantly, attacking on American workers. This got me to thinking, who financed this guy? A bit of research at OpenSecrets.org revealed a disturbing discovery. But first, I want to share with you a refresher on old Mitch.
