Shareholder 'Democracy'

By: Jim Hightower

One of the most absurd oxymorons in our country is "shareholder democracy".

The claim by corporate image-makers is that these autocratic corporate empires are actually flowers of democracy governed by and for the millions of little shareholders like Old Aunt Emma in Dubuque, with her 100 shares of Microsoft or Wal-Mart or Disney.

Hogwash. Start with the fact that nearly 60% of Americans own no stock at all - even through a mutual fund or 401(k). And most of those who do own stock have only pittance, like old Aunt Emma's 100 shares. Indeed, 90% of all corporate stock is firmly in the hands of the wealthiest 10% of Americans.

But, second, the CEO's and top managers rule their corporate fiefdoms with an iron fist, not tolerating even the pretense of shareholder democracy.

Take Verizon, the phone giant. It recently held its annual election to choose some members of its board of directors. Great, elections! That's democracy in action, right? Not exactly. Every shareholder does get a ballot, but no opposition candidates are allowed on it. You only get to vote for the "candidates" selected by the CEO.

You can choose to "withhold" your vote from management's handpicked nominees, but it won't much matter, for even if the insider nominees get only one vote each - they win.

Verizon is unabashed by this dictatorship. "Nothing in law requires that an election provide a choice of candidates, or that shareholders have a 'right' to nominate candidates", says a Verizon document. Indeed, Verizon explicitly rejects democracy, claiming that if shareholders had a choice of more than one candidate for each board seat, "It would be difficult to predict which individual would be elected."

Well, yes - democracy is crazy like that.

Verizon is not alone - no corporation allows opposition candidates on its ballot. So much for "shareholder democracy"!