The Illusion Of Democracy

A new dilemma arose today in the ‘Teach my 9 year old child about money’ project. Kellogg’s sent her a voting card and ballot proxy, urging her to exercise her right to suffrage at the annual shareholder’s meeting, or more preferably, by signing a proxy form and sending it back to management.

Tony_The_Tiger_Retro

Shareholder ballots: Theeey’re GREAT!

She has that voting right because I am a mean daddy and I took her tooth fairy money and made her buy 8 shares of K back in 2013.

The ballot, like all the others I’ve ever gotten from public companies, urges her to:

1. Vote for the nominated slate of directors (about whom she knows nothing, obviously.)

2. Vote for the proposed executive compensation package (about which she knows nothing, but which I’m certain would be upsetting if she connected the dots for example about what they’re paid vs. what the parents of kids in her school make per year.)

3. Vote for the proposed annual auditor. (She’s only nine, but she’s actually dedicated quite a lot of time to understanding the differences between the Big 4 accounting firms, specifically as they provide services to food conglomerates, so I know she’d have a lot to say about this one. Like every kid I know, she just loves PriceWaterhouse Coopers LLC. And who doesn’t?)

Ballot choices 1 and 2 in particular represent a kind of charade democracy whereby the supposed owners (shareholders) ratify key insider-decisions (leadership and pay) but without any freaking clue what they’re voting for. And since the interest of shareholders might diverge strongly from the company leadership when it comes to executive pay in particular, shareholder voting for public companies in this manner is about as legitimate as elections in Communist Russia. And personally I don’t like to participate in charades and farces [1]

Kellogg vote

 

Just imagine if we ran The World’s Greatest Democracy this way, and the Financial-Powers-That-Be got together and only presented two choices for president, a Bush and a Clinton. Ummm…. [2]

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Vintage Vixen 5 years ago Member's comment

I really enjoy your writing. To clarify, you think that withholding a vote, hence approval, is the only option? I can't see another, but won't that just be seen as apathy and encourage them to think they can do anything with impunity?

Bankers Anonymous 5 years ago Author's comment

Thanks for reading! At this point I don't know of any real option for creating 'shareholder democracy,' whatever that would look like. I guess I am saying 'withhold the proxy,' even though it doesn't do any good either way.