Stockholders have their say;

              Photograph not included
in the Web version
Stockholders
Have
Their Say
The buzz of conversation mounts as
men and women gather at the door-ways,
pick up programs, gradually
move into the hall and take seats. Old
friends lean out over the aisles to greet
each other. Chatter reaches its peak
and then diminishes as latecomers
bustle into their places. Voices hush
and all eyes turn to stage front, ex-pectantly.
For it's the show of the year-one
performance only—and the price of
a seat can be in the thousands of dol-lars.
It's the annual stockholders meet-ing
of United Synergistic Corporation.
Call an annual meeting a show?
Why, sure. Management is on show.
It's a day of reckoning in which Mrs.
Hometown with two shares and Mr.
Mogul with ten thousand get to see
just what has been going on in the
executive suite and how these goings
on have affected sales and earnings of
the corporation as well as the value of
the ticket of admission: shares. It's
also the opportunity for shareholders
to show their stuff to management by
8 registering approval or disapproval
through their proxies or direct votes.
And, if the audience is a lively and in-volved
one, it can be a very exciting
show.
Typically, the script goes like this:
The chairman or president of United
Synergistic calls the meeting to order
and introduces the directors and impor-tant
company officers. He also intro-duces
the auditors. Votes are collected
for tabulation. In the meantime the
chief executive officer will describe the
corporation's ups or downs for the past
year. He'll detail mergers and acquisi-tions,
describe capital outlays and new
product breakthroughs. If things are
rosy, he'll emphasize the bright spots.
If the company has been suffering, he'll
do some justifying. And then, just be-fore
the results of stockholder voting
are announced, he'll throw the meeting
open to questions from the floor.
This is the climactic point of the
meeting. If enough stockholders, no
matter how humble their holdings,
stand up and let themselves be heard,
the annual meeting can be lively the-ater.
If stockholders are shy, the meet-ing
will be a cut-and-dried lecture
presentation, to the relief of the cor-porate
officers in the spotlight.
When stockholders do ask questions,
management does most of the answer-ing.
However, stockholders frequently
request that they be permitted to ad-dress
their questions directly to the
auditors or, on other occasions, man-agement
may refer questions to the
auditors. The Haskins & Sells repre-sentative,
for example, may be asked if
the Firm received full cooperation
from management while making its
audit, how frequently the auditors met
with the audit committee. Have the
auditors checked for inventory obso-lescence?
Have the auditors noticed
any problems in the collection of ac-counts
receivable?
More and more stockholders have
been asking questions lately, and the
information they seek is not always in-cluded
in the handsomely packaged
annual reports that are issued before
these once-a-year conclaves. Even
though items are detailed in print, they
often must be clarified orally for the
stockholders.
Stockholder questions typically re-flect
the shareholder's own financial
interests. When will dividends be in-creased?
Can't the company hold costs
down better? Was such-and-such an
expenditure necessary? Aren't execu-tive
salaries too high? Why were
bonuses increased? The more sophisti-cated
investors might note in the an-nual
report that the reason why the
company's earnings for the year were
lower than expected could be traced
to the writeoff of an expensive research
program. They could question the
method used to account for these costs.
Not all questions concern finances,
especially with the growth of social