The regulatory requirements for an annual meeting of a publicly traded company are minimal and with no trouble can be wrapped up in under an hour. There are some companies that dread these required events and try hard to set speed records from opening to closing.
But a handful of companies recognize the vast marketing and communications value and go out of their way to create a memorable spectacle that wins over shareholders, large and small. They understand that such meetings, when done right, can transform shareholders into goodwill ambassadors who afterward go out and sing the praises of the company.
This year's surprising winner was Wal-Mart, which had historically avoided any sizzle at its annual gatherings. Perhaps taking a page from Berkshire Hathaway, which draws thousands each year to Omaha, NE, for a weekend of shareholder festivities, Wal-Mart brought Broadway to Bentonville, AR (actually, the meeting took place in nearby Fayetteville).
With a cast of two dozen New York actors playing employees, the meeting opened with 90 minutes of original song and dance. Using the theme, "It's about the customer," the musical even poked fun at elements of Wal-Mart's culture. The recent winner of American Idol even performed.
This effort is made more admirable in that Wal-Mart executives could have taken a more defensive posture, given the recent issues that have attracted negative press. To its credit, Wal-Mart recognized that circling the wagons would only hinder it and instead sought to win over the more than 20,000 shareholders who packed the Bud Walton Arena for the pep rally.
With far less fanfare, Exxon's annual meeting succeeded at building a bridge to critical shareholders. Exxon's new CEO Rex Tillerson realized that some shareholders would pepper him with angry questions, but he patiently listened and answered each question, ranging from executive compensation to the threat of global warming.
What's more, Tillerson didn't shy away from making his company's point of view heard when he told the audience in Dallas that "scientific consensus is an oxymoron. Climate change is very complex. Why wouldn't everyone want to have an open debate on what we know and what we don't know?"
While both Wal-Mart and Exxon are mega-companies with deep resources, meetings can also help small companies drum up converts, though on a less grand scale. Of course, financial performance is always paramount, but shareholders also want to feel good about owning shares and come to these meetings looking for a reason. Management has the opportunity to help them understand how it plans to succeed and why they should remain committed to the company.
The internal value of such meetings should not be overlooked. These days, staffers, current and retired, often own large amounts of shares through 401(k) plans or other investment vehicles. A good meeting can help raise morale and can even help in recruiting.
The fact is that savvy companies seize the opportunity that shareholder meetings present and use them to cement the shareholder-company bond.
Fred Bratman is president of Hyde Park Financial Communications.