Emmis Special Shareholder Meeting
Awhile back, my sister-in-law was writing a report about Emmis Communications (EMMS), which owns radio and television stations as well as some magazines around the county. Being familiar with it and having being sparked by her questions and report; I decided to invest a little in it. I logged onto my Sharebuilder account and picked up a few shares.
A few days ago, I got a notice from Sharebuilder announcing a special shareholder meeting and included the proxy to vote my shares. I have never attended a public company’s shareholder meeting; I have usually just sent in my proxy if I remembered about it. Since I was in town and had some free time I decided to attend in person and see what the fuss was about. Maybe I might even learn something in the process? Naah.
The headquarters for Emmis is in the downtown circle and right outside the building they were setting up for a Formula One publicity event. Inside, there was nothing to indicate anything was going on, so I checked with the security desk who was one of the nicest gentlemen I met today. He showed me to the elevator, explained where to go and swiped a badge so I have access to the top floor where the meeting was held. He even had a few good jokes about the stock and such. Once I got on the elevator though, it instead went to the basement and cleared out where the button had been pushed so I lost access to the top floor. Luckily someone else got on at the next floor and re-swiped her badge so I get upstairs.
From what I’ve read and heard previously, the vast majority of shareholder meetings is a very sparsely attended affair not like the Wal-Mart or Berkshire Hathaway (cheer sessions?) meetings you see on television. This one was in the first category for sure. My exact first reaction as I walked in the room was like hold back the crowds. There was me, an older lady (who apparently had 200’ish shares) and a guy who I think may have been a reporter. There were a few Emmis employees milling around in the back of the room.
The gentlemen (whose name I don’t have with me at the moment) who ran the meeting called the meeting to order, introduced himself and announced they were voting on the approval of the dutch auction that Emmis had been previously announced. He asked if anyone needed to vote, which both the lady and I did. He then announced the results of the vote, which was approved and then asked for a motion to adjourn. The whole thing was over within like 4 minutes, which would have been even faster if I hadn’t voted. A few people even showed up a few minutes late and were surprised to find out they missed the big event. Of course, it did not even matter how I or mostly anyone else voted since the Class B shares have the super majority of 10 votes for every 1 vote each of my shares get. The CEO, Jeff Smulyan owns 100% of the Class B shares, so that means 48% of the vote automatically goes in favor of management. The tin-foil hat wearing conspiracy side of me wonders if maybe this Dutch auction may just be really a way of getting Jeff’s share back over 50% and getting the benefits of that such as FCC control purposes and some exemptions that go along with that without him having to spend his own money. Besides, if I understand what I have read about this auction, the company is borrowing money to fund this auction. So the company is taking on more debt to try to bump up the share price, but wouldn’t things such as reducing debt and maybe even a dividend (well…if you have the extra special shares, you already get a dividend) help matters?
They did have a few things such as orange juice out on a table outside the meeting room, which seemed to be mostly enjoyed by Emmis employees. It was an semi-interesting experience, I’m not sure if I would go again or not but at least I went once.