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Annual Meetings' Beloved Nuisance

Gadfly Evelyn Davis sits out a few annual shareholder sessions on doctor's orders.

April 04, 2006|From Reuters

The biggest news from Goldman Sachs Group's annual meeting last week wasn't an exchange over environmental policy or chief executives' compensation: It was the absence of Evelyn Y. Davis, the shareholder gadfly who has vexed corporate America's biggest bigwigs for four decades.

In the otherwise routine and dull world of annual meetings, Davis adds a dash of chaos. The diminutive activist is infamous for taking the floor during comment periods and then refusing to let go until she finishes lecturing management on issues such as board elections, stock options and excessive compensation.

Her Germanic accent, her refusal to genuflect before corporate executives and her willingness to pick fights with more obsequious gadflies makes her a memorable part of the corporate business world. But this year, she said, doctors advised her to limit travel for a few weeks. Davis said she expected to return to the meeting circuit next month and thus will miss the annual meetings this week of Morgan Stanley and Lehman Bros.

"It's not a big deal. My doctor said for a few weeks I have to curtail my travels," she said by phone from her residence at the Watergate in Washington. "It's nothing serious."

Davis said she has been attending meetings and calling for corporate governance changes for 40 years. The fact that pet issues such as cumulative voting and de-staggered board elections are in vogue is more an annoyance than a vindication, given that she must share the microphone with many newcomers.

"I am the original gadfly," she protested last year.

And although she can disrupt carefully scripted meetings with long-winded monologues, CEOs say her absence is missed.

"Where is Evelyn Y. Davis?" Goldman CEO Henry "Hank" Paulson asked Friday, drawing a few chuckles from shareholders.

About two years ago, Davis left the audience microphone, walked up to the stage and gave Paulson a warm hug.

"Evelyn Davis has been an invaluable contributor to the debate over corporate governance," Goldman spokesman Peter Rose said.

Davis, of course, enjoys unusual clout and access to top executives. Former American Express CEO Harvey Golub would hand-deliver a newly issued charge card, and Ford Motor Co. chief William Clay Ford Jr. once personally delivered a new Jaguar automobile to her.

Davis recently spoke to former Morgan Stanley CEO Philip Purcell, who was forced to retire last May after a shareholder rebellion, and to new CEO John Mack, who returned to the investment bank in June.

Last year Davis recorded a number of victories at Morgan and Lehman, which adopted her governance proposals after years of fending them off.

And despite her many years on the governance beat, Davis said she was far from retired. By May and June, she expects to resume traveling and attend annual meetings of newly separated CBS Corp. and of struggling General Motors Corp.

Davis says she is most looking forward to the inaugural meeting of NYSE Group, which runs the New York Stock Exchange. "That should be very interesting. I will be there if they have to carry me in with a stretcher," she said.

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