When This 78-Year-Old Stock Gadfly Speaks Up, Fluor Directors Listen

Fanette Stern could barely reach the microphone at Fluor Corp.’s annual shareholders meeting Tuesday. But as always, she got the board’s attention with a combination of audacity, wit and Annie Oakley marksmanship.

“Some of you are worth a lot of money dead,” the 5-foot-tall Stern told the board before complaining about the amount of money the company is spending on death benefits and other perks for directors. The longtime shareholder also noted with disgust that the company pays up to $8,000 a year to key management employees to help them with their individual tax planning.

And she complained that some directors have been absent from board meetings more than 25% of the time. She suggested eliminating the annual retainer of $18,000 given to each director and instead increasing the fee that directors get per meeting attended. “Does that make sense to anyone?” she asked, winning applause from fellow stockholders.

A gadfly among shareholders--who are by and large a very tame group at annual meetings--Stern said she believes that her outspokenness and vigilance are simply “good business.” She prefers being called an “owner” rather than shareholder because that is what a shareholder really is, she said.

Stern, who just turned 78, said she owns stocks and bonds in 40 companies and attends as many of the shareholders meetings as possible. She said she has missed just one Fluor annual meeting--last year when she was ill--since she bought her first Fluor stock in 1960.

She said with pride that two years ago Fluor sent a chauffeur to her home in Los Angeles to drive her to Irvine for a private 2 1/2-hour meeting at Fluor headquarters with Chairman David Tappan Jr., who wanted to hear her opinions about company operations.

At Monday’s annual meeting, Stern commended Tappan for bringing Fluor back to profitability after two years of hefty losses, belt tightening and corporate restructuring.

However, Stern said she believes that Fluor should make a gesture of good will to shareholders by giving them a token dividend in appreciation of their sacrifices during the hard times. The company suspended all dividends to shareholders a year ago.

“As soon as earnings can support a sustained dividend, it will be considered by this board,” Tappan responded.

Tappan said that although the engineering and construction company posted a $9-million profit in the first quarter of its 1988 fiscal year, he does not believe that it is ready to restore dividends. He told a press conference following the shareholders’ meeting that he does not want to resume paying dividends unless he is certain the payments can be maintained. “One quarter does not a year make,” he said.

But Tappan added that the restoration of dividends is a top-priority item. “It will be talked about at every (board) meeting,” he promised.

Tappan was optimistic about future expenditures for the manufacturing and processing plants that his company builds, despite what he called the “doom and gloom” of some economists.

He said he sees capital spending increasing both in the United States and abroad, where Fluor is on an expansion drive.