Shareholders of the World Unite: Power in Numbers

This is such a great idea, I can't believe I didn't come up with it myself:

http://features.csmonitor.com/economyrebuild/2009/05/07/one-mans-bid-to-bolster-shareholder-power/

Go to isuffrage.org to learn more.

Update on May 24, 2009: I am now affiliated with this program as a "field agent."

California Dreamin': Fiscal Irresponsibility

This is old news, but still worth sharing, because of California's upcoming special election:

http://online.barrons.com/article/SB123941269948510457.html

Chris Street, treasurer of Orange County, Calif., warns if the federal government backs California's debt, the market for city bonds will be harmed. "Why would anybody buy the debt of a local issuer if they can get federally backed debt sold by the state?" he asks. He should know. The OC declared bankruptcy several years ago. Barron's is too smart not to notice the irony of quoting an OC official about the demand for municipal bonds.

Just in case you forgot--the CS Monitor reminds you that taxpayers back and insure government employees' retirement plans. Ultimately, every dollar that goes to them--the police, firefighters, and teachers--comes out of our pocket. Other states besides California also pay disproportionate amounts for their public pensions, showing the system itself is fundamentally flawed. For example, Illinois had $40.9 billion in future general and special obligation bond debt service as of June 30, 2006 ($22.7 billion principal and $18.2 billion interest). $10 billion of that–almost half of the principal--was tied to public sector pensions. (From http://www.wh1.ioc.state.il.us/fiscalcondition/DebtLevels.htm.)

Meanwhile, in California, things keep getting worse:

San Jose officials said Tuesday that the tanking stock market could force taxpayers to pony up as much as $50 million extra the following year to cover losses in the city's retirement funds.

Things look even worse in the longer term, as city officials say the cash-strapped general operating fund could have to pour tens of millions of additional dollars into the city's two pension programs by 2013.

If it's not painfully obvious by now, the current government retirement system--which is tethered to the vagaries of the stock market--is untenable. It promotes civil war between taxpayers, Wall Street, and government employees. We need to eliminate the special pension plans given to public sector employees and let them have the same retirement plan most private sector workers have--namely, a 401k or a 403b plan. In exchange, taxpayers can boost some government salaries, which are easier to track and not tied to the stock market.

As for the upcoming special election, California's governor wants Californians to vote "yes" on all the measures in the upcoming special election. I've already voted by absentee ballot, but I voted "no" on some measures. I am sick of my legislature not being able to handle basic accounting. When your income declines, you need to cut expenses. Will Sacramento ever learn third grade math?

Bonus: Robert Frank on people buying property.

Bonus II: Steve Malanga on public sector unions:

http://online.wsj.com/article/SB124227027965718333.html

Sarah Jones: Incredible Performance

Lawyers and Dysthymia

Lawyers tend to suffer from all kinds of maladies. Now, we have to worry about "dysthymia," too:

My kind of depression is termed “dysthymia” in the DSM IV (mental health’s diagnostic “Bible”). With dysthymia, a person can still function—after a fashion. However, life’s colors are faded. It’s more difficult to enjoy pursuits that had, not long ago, brought pleasure. We withdraw from our closest relationships.

More here. I think the lesson is not to go into divorce law, aka family law. I used to make appearances for other lawyers in family court, and I got really sad after spending just an hour in court. Many people in family court are self-represented (pro se). It is hard to see people go at each other in public, especially when kids are involved.

Teacher's Unions Suing California

The CFT--California Federation of Teachers (how many teachers' unions are there?)--is suing California to get taxpayers to give them more money:

http://www.mercurynews.com/ci_12328660 (SJ Merc article published on 5/8/09, Sharon Noguchi)

Unbelievable. The timing of the lawsuit makes it appear they're trying to usurp the voters if we go against their funding demands. It's important to try to work with all entities, especially when education is involved, but that's hard to do when California's teachers' unions sue the state. After all, they're really suing the taxpayers.

WH Auden on Mass Media

Attributed to W.H. Auden, one of my favorite poets:

What the mass media offers is not popular art, but entertainment which is intended to be consumed like food, forgotten, and replaced by a new dish. This is bad for everyone; the majority lose all genuine taste of their own, and the minority become cultural snobs.

• "The Poet & The City" (p.83)

Google's Annual Shareholder Meeting (2009)

I attended Google's (GOOG) annual shareholder meeting today, May 7, 2009. As usual, the meeting took place on Google's campus. In the past, meetings were an intimate, casual affair. Larry Page and Sergey Brin, Google's founders, would sit on stools and answer shareholder questions. I loved watching these two young men up-end Santa Clara County's normally uptight corporate culture. Sergey was especially fun to watch, because if he didn't think your question or comment had merit, he'd take you on directly. During one meeting a few years ago, when a shareholder chastised Google for not doing enough to combat China's censorship, saying other companies were being more pro-active, Sergey sneeringly pointed out that Yahoo had just helped China jail a reporter. In any case, I should have known it was all too good to be true. This year, neither founder attended the meeting. The meeting took place in a larger conference hall instead of an upstairs room above the cafeteria. I suppose this development is a natural progression--more shareholders attend the annual meeting, and most companies move away from their founders as they grow. Still, I hope Sergey and Larry come to next year's meeting. It wasn't the same without the two of them sitting up there, jeans and all, ready to answer questions without a corporate-style verbal filter.

I missed the lunch, which was held at 12:30PM. (I still managed to get two It's-It ice cream treats and a cold salad to tide me over). The meeting itself started at 2:00PM. David Drummond, Google's Senior VP and Chief Legal Officer (and a Santa Clara University graduate--go Broncos!), handled the formal part of the meeting. During the formal part of the meeting, a Chinese activist [Update: his name is Jing Zhao] wanted to make some comments on a shareholder proposal relating to online censorship; however, Google's procedures do not allow ordinary shareholders to make comments on proposals prior to voting. Google only lets the shareholder who placed the proposal on the ballot to speak for a few minutes. Thus, Google acts as a partial censor at its annual meeting--at least with respect to comments that may impact how shareholders vote on stockholder proposals.

Many shareholders vote their shares in person at the meeting and may be influenced by shareholder comments. Allowing ordinary shareholders to comment on proposals only after voting is closed is tantamount to the American government banning CNN from making political comments until after national election polls are closed. Google ought to limit the time a shareholder can speak on proposals to three minutes and let anyone who wants to comment specifically on a proposal have their say. This change would strike a reasonable balance between allowing activists to disrupt the meeting and restricting the flow of information to shareholders.

As for the person who wanted to speak, his first language isn't English. I've seen him at other shareholder meetings commenting on stockholder proposals relating to China. He is against China's censorship policies, but his broken English makes him difficult to understand. In this case, when he wasn't given an opportunity to speak, he quietly walked out of the meeting. When he tried to speak at Cisco's annual shareholder meeting, the CEO allowed him to speak briefly. After the meeting, a Cisco investor relations representative took him outside and listened to him. Cisco handled the situation much better than Google, but I am confident Google will learn from this experience.

CEO Eric Schmidt handled the informal portion of the meeting. He spoke for about ten minutes. His main points were these:

1. There is no recession in information.
2. Google is making advertising ridiculously easy.
3. Mobile is wherever you are. ["Search" can be part of the person, unrestricted to a place.]

During the Q&A session Mr. David Drummond talked about censorship as being bigger than just China. He said it also took place in non-authoritarian countries. In a really interesting comment, he said that police have visited Google in the middle of the night because Google would not share information. He later mentioned Germany and France as two non-authoritarian countries that apparently engage in some censorship.

A shareholder asked about company morale now that Google's "legendary" perks have been reduced. CEO Schmidt said Google still had amazing perks, including fifteen(!) food options/cafeterias. Mr. Schmidt is correct--Google still has fantastic perks, and the perks aren't limited to tangible items. A casual stroll through Google's offices shows that employees have the freedom to do pretty much anything. One employee, Mr. Tan Chade-Meng, has pictures with lots of famous speakers posted outside his office, and most Google employees decorate their work space as they see fit. I saw a bunch of international flags, stickers from different American states, and even pictures promoting a pirate club. Google even has on-site medical doctors who can prescribe medication, so no employee has to go to the hospital unless something really serious happens. Of course, Google employees still get free food, soft drinks, coffee, and massages (Google gives massage certificates to employees on their birthdays). Google employees may also bring a friend twice a month to the cafeteria for a complimentary meal. In short, I wouldn't worry about Google's employees. They are expected to work hard and are allowed wide latitude as long as their work gets done.

Another shareholder asked Google not to split its stock. He was concerned with market manipulators and short sellers.

Other shareholders commented on how to improve various services, especially Google's language translation tools.

Overall, Google's shareholder meeting was well-done, but not a great experience. It almost felt like the company had matured into just another big corporation. Many shareholders fell in love with Google because of Larry and Sergey's vision. Without them at the meeting, Google risks having a so-so shareholder meeting instead of an annual event on par with Berkshire Hathaway, Apple Inc., and other wonderful companies.

Bonus: here is Eric Savitz's take on the meeting. The picture above is of Eric and me. For those of you who follow his blog, he seems like a really cool guy.

Audiocasts of annual meetings are here. Video of the annual meeting is here.