On one level, this is shaping up as perhaps the most acrimonious annual meeting season ever.

Earlier this year, two former Walt Disney directors—Roy Disney and Stanley Gold—seemed to inspire dissidents at other companies when they launched an intense, very public campaign to oust Chairman and CEO Michael Eisner. At the March annual meeting, 43 percent of shareholders wound up withholding their votes for the embattled executive, an unusual event since shareholders historically rubber-stamp their approval for directors, who typically run unopposed anyway.

The no-confidence vote, however, seemingly inspired unhappy shareholders at many other companies, touching off a wave of withhold votes at subsequent annual meetings. CalPERS for one, has stepped up this effort this year, and every few days announces a dozen or so of new targets for these no-confidence communications.

Meanwhile, last month a scuffle broke out at the Coca-Cola annual meeting. After activist shareholder Ray Rogers reportedly accused the company of violating human rights in Colombia, he was shoved to the ground and forcibly removed from the company's annual meeting, according to a Reuters report.

A day later, more than 200 attendees to PG&E Corp.'s annual meeting staged a raucous protest against the utility's compensation practices.

It seems they were not very happy that top executives earned millions of dollars while the company's main subsidiary had been in bankruptcy and dividends had been suspended.

More Placid Than Usual?

Yet, despite those three raucous gatherings, 2004 is actually shaping up as one of the more placid annual meeting seasons.

First of all, there are virtually no proxy fights this year. Carol Bowie, director of governance research with the Investor Responsibility Research Center, counts just one—Water Pik Technologies. Its shareholder meeting is scheduled for May 13.

She says the IRRC covered at least 14 last year.

Meanwhile, a growing number of companies appear to be in a comprising mood these days when it comes to pending shareholder resolutions.

For example, in 2003, 22 percent of all governance-related (as opposed to social issues) shareholder proposals were subsequently withdrawn before the annual meeting, up from 17 percent in 2002 and 13 percent in 2001. This implies the sponsor and the company hammered out some sort of deal, Bowie explains.

And this year the number is expected to be even higher. Already 133 of a record 825 governance-related proposals have been withdrawn, or 16 percent of the total, but Bowie won't know the final count until all of the proxies are published.

"Many companies don't want to stand out" as uncompromising or insensitive to shareholders, she figures, especially given that the SEC is likely to unveil its updated proxy access rules as early as this month, which would make it easier for large investors to put up their own slate of directors.

Companies are also becoming more responsive to the non-binding shareholder resolutions that in the past have received high levels of support—eliminating or putting up to shareholder vote a poison pill, and eliminating classified (staggered) boards of directors.

In 2003, 20 companies terminated their poison pills or agreed to put the issue up to shareholder vote. This compares with 12 companies that voluntarily took this position the prior year.

And in 2003, 22 companies chose to eliminate their classified boards compared to just five the prior year.

So far this year, just one company—Pitney Bowes—has seen a poison pill proposal withdrawn.

However, shareholders have pulled proposals to eliminate classified boards at seven companies: Safeway, FirstEnergy, Yum Brands, Dow Chemical, Lucent Technologies, BellSouth and Merck & Co.

"In previous years many companies have ignored shareholder sentiment," Bowie points out. "But in 2003 that seemed to reverse."

Meanwhile, in 2003 only one company among the 2,000 that the IRRC tracks asked shareholders to approve establishing a classified board (Vishay Technologies), compared with five in 2002 and six in 2001.

In addition, in 2003, 23 companies asked shareholders to change the bylaws to eliminate their classified board, versus only five in 2002 and three in 2001. Notes Bowie: "This reflects more responsiveness from companies on this issue."

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