Shareholders Gear Up for Annual Rite

Shareholders are flooding companies with record numbers of proposals and proxy fights as corporate America braces for the often-stormy annual meeting season.

Investor demands are now reverberating through boardrooms, before being formally addressed in April and May when companies typically meet with their shareholders.

“Shareholders are really using pressure tactics in all kinds of aggressive and creative ways,” said John Wilcox, chairman of proxy solicitation firm Georgeson & Co.

The number of shareholder proposals related to board governance issues has surged 74% from 1995 levels, to 214 for the 1996 annual meeting season, according to data compiled by Georgeson.

Many of them seek to alter board structures or rescind “poison pill” takeover-defense plans.

Dissatisfied shareholders are also trying to oust directors and install their own slates.

“There are a lot of active efforts [by shareholders] to elect their own slates of nominees at companies. That’s a very big issue,” said Jill Lyons, director of research at Institutional Shareholder Services, a Maryland-based firm that assesses proxy fights for institutional investors.

The year’s most explosive meeting is set for Winston-Salem, N.C., where RJR Nabisco Holdings Corp. will face off against well-known investors Bennett LeBow and Carl Icahn.

LeBow, who is chairman of Brooke Group Ltd., has proposed a slate of directors who support an immediate spinoff of RJR’s 80.5%-owned Nabisco Holdings Corp. food unit.

The food and tobacco giant says it is committed to a spinoff but does not want it to occur before 1997.

Experts said shareholders have become increasingly aggressive since 1992, when revisions to federal securities laws made it easier for them to communicate their demands.

“I think people have finally become offended by, in many places, the gross abuses that are taking place,” said Ken Steiner, founder of Investors’ Rights Assn. of America, an activist group that is sponsoring 98 shareholder resolutions this year.

Labor unions are also taking a higher profile at annual meetings, launching resolutions that attack confidential voting and worker safety issues.