Shareholder rebellion occurs when the owners of a corporation work to throw out management or oppose their decisions. Shareholder rebellion may occur at an
annual general meeting or through a
proxy battle
A proxy fight, proxy contest or proxy battle (sometimes even called a proxy war) is an unfriendly contest for the control over an organization. The event usually occurs when a corporation's stockholders develop opposition to some aspect of the cor ...
. Shareholders may also threaten to collapse a firm's stock price through concentrated selling. In 1998, the
Rockefeller family
The Rockefeller family () is an American industrial, political, and banking family that owns one of the world's largest fortunes. The fortune was made in the American petroleum industry during the late 19th and early 20th centuries by broth ...
led a shareholder revolt against
Exxon
ExxonMobil Corporation (commonly shortened to Exxon) is an American multinational oil and gas corporation headquartered in Irving, Texas. It is the largest direct descendant of John D. Rockefeller's Standard Oil, and was formed on November ...
over its
climate change
In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to ...
policy. In 2005,
Michael Eisner
Michael Dammann Eisner (born March 7, 1942) is an American businessman and former chairman and chief executive officer (CEO) of The Walt Disney Company from September 1984 to September 2005. Prior to Disney, Eisner was president of rival film st ...
retired after
Walt Disney
Walter Elias Disney (; December 5, 1901December 15, 1966) was an American animator, film producer and entrepreneur. A pioneer of the American animation industry, he introduced several developments in the production of cartoons. As a film p ...
's nephew,
Roy Disney Roy Disney may refer to:
* Roy O. Disney (1893–1971), partner and elder brother of Walt Disney
* Roy E. Disney
Roy Edward Disney KCSG (January 10, 1930 – December 16, 2009) was an American businessman. He was the longtime senior executive f ...
, led a shareholder revolt, claiming Eisner was a
micromanager who had caused a creative
brain drain. In 2010,
British Petroleum and
Shell faced a shareholder revolt over their
Canadian tar sands
Canadians (french: Canadiens) are people identified with the country of Canada. This connection may be residential, legal, historical or cultural. For most Canadians, many (or all) of these connections exist and are collectively the source of ...
policy.
Recently, shareholder rebellions have occurred over the issue of
executive compensation
Executive compensation is composed of both the financial compensation (executive pay) and other non-financial benefits received by an executive from their employing firm in return for their service. It is typically a mixture of fixed salary, variab ...
at
Cable and Wireless and Shell; Shell in response unveiled a plan to curb executive compensation and bonuses.
According to some analysts,
institutional shareholders
An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked co ...
have been lax about holding management accountable because they were concentrating on picking correct stocks rather than protecting their interests in the stocks they owned.
Shareholder revolts are becoming more common, with a record number of advisory “Say on Pay” votes in the US failing to win majority support in 2018.
History
On 24 January 1609, Amsterdam-based businessman
Isaac Le Maire filed a petition against the
Dutch East India Company
The United East India Company ( nl, Verenigde Oostindische Compagnie, the VOC) was a chartered company established on the 20th March 1602 by the States General of the Netherlands amalgamating existing companies into the first joint-stock c ...
(VOC), marking the first recorded expression of
shareholder activism or shareholder rebellion.
[Hansmann, Henry; Pargendler, Mariana (2013). ''The Evolution of Shareholder Voting Rights: Separation of Ownership and Consumption''. (Yale Law Journal, Vol. 123, pp. 100–165, 2014)]
See also
*
Shareholder activism
*
Shareholder oppression Shareholder oppression occurs when the majority shareholders in a corporation take action that unfairly prejudices the minority. It most commonly occurs in non-publicly traded companies, because the lack of a public market for shares leaves minor ...
References
{{Reflist
Rebellion
Rebellion, uprising, or insurrection is a refusal of obedience or order. It refers to the open resistance against the orders of an established authority.
A rebellion originates from a sentiment of indignation and disapproval of a situation and ...