All public companies have Annual General Meetings or AGM and shareholders get to vote for the Board of Directors, the audit company, executive compensation and other issues which may come up. If a company has made money and the profits are within the expected range, the odds are overwhelming what management has recommended will pass. If the company is losing money or shares are down, then shareholders will and do vote against management recommendations.
In an article from Reuters, what a difference a year makes. Last year Exxon Mobil Corp headquartered in Houston, Texas was facing a low price of oil and gas which sent the share price down to the lowest point in years. Then Russia invaded Ukraine and oil prices went up. Last year, the concerns over the environment lead to 3 people being elected to the Board of Directors which were not recommended by management. This year the the overwhelming majority backed management as the share prices climb from the 30’s to the 90’s and the company cash is gushing into the company. At the AGM, an organization wanted increase action on climate change but only 28% voted for it.
Linking to dividend paying stocks, when a company makes profits and can pay shareholder dividends or do stock buybacks, the majority of shareholders will make management because they made profits. In some industries, as long as management does not make huge blunders they can make profits, in other industries they have to continually executed well. The issue is shareholders can do what they want with the dividends, the company’s job is to ensure they can be paid.
There are more questions than answers, till the next time – to raising questions.