NCR will hold its annual meeting at 9 a.m. April 22. To participate, go to virtualshareholdermeeting.com/ncr
NCR shareholders who want to question company strategy or hear about its commitment to diversity needn’t worry about plane tickets or hotel rooms for this year’s annual meeting. But they also won’t be able to shake the CEO’s hand after the gathering.
For the first time, the Duluth-based tech giant is holding its meeting online. The April 22 event will have no physical location. Instead, shareholders must log in to attend.
NCR is among several companies eschewing the annual press-the-flesh ritual to hold its meeting in press-the-mouse mode. Last week, computer giant Hewlett-Packard held its meeting via the Web.
The online-only approach makes the meetings more accessible to far-flung shareholders who can’t take the time or spend the money to travel. There is also an environmental benefit, NCR said, from allowing people to participate from home.
The downside is that shareholders who often have just one chance each year to meet the leaders of the companies they own can no longer show up and see board members and executives in person. There also is no place for protesters to gather.
“It doesn’t seem like a very shareholder friendly move,” said Gil Luria, an analyst for Wedbush Securities who covers NCR.
Last year, 53 firms held online-only shareholder meetings, said Broc Romanek, a former lawyer for the Securities and Exchange Commission who now edits a blog, TheCorporateCounsel.net. Most have been small companies that argued virtual meetings save money and make it easier for shareholders to participate. A much bigger number — roughly 500 — hold hybrid meetings in which shareholders can attend either online or in person, he said.
In 2009, angry shareholders forced Intel to ditch an online-only meeting plan. It went back to a hybrid meeting.
Still, online-only meetings could soon become more common after NCR and H-P both made the move this year, said Romanek. “I would definitely expect there could be a spike,” he said.
Resistance at big companies comes from both small-time retail shareholders and major investors. The Council of Institutional Investors, which represents big investors such as pension funds and university endowments, has said it welcomes hybrid meetings but opposes virtual-only shareholder meetings.
Eliminating face-to-face interaction can mean fewer vigorous exchanges, said Timothy Smith, senior vice president of Walden Asset Management.
“In a public meeting, the dynamic is very different,” Smith said. “It should not be difficult for them one time a year to stand before their shareholders.”
Smith noted that meetings that are sparsely attended may give those who do take the time to travel even more opportunities to interact with the top brass.
A virtual meeting makes it easier to avoid controversies, and Smith worried that it would be easier to “lose” controversial questions in an online forum, as opposed to when someone is standing and persistent in person. Luria, the analyst, said it may be easier to filter questions online.
NCR, which recently announced plans to move its headquarters to Midtown with the help of $15.8 million of incentives, wouldn't make someone available to talk about the decision. Spokesman Kevin Ruane could not say whether the company had the ability to edit questions.
In an email, Ruane said NCR has not had significant shareholder attendance in the past. As a technology company, he wrote, NCR looks for ways to take advantage of technological developments that provide “for greater connection to a larger group of shareholders.”
If participation rises online and more small stockholders are able to log on, it will be good for shareholders whose voices aren’t always heard, said Joe Lawless, executive director of the Center for Leadership and Social Responsibility at the University of Washington Tacoma. Having a broader audience via the web could also mean leaders’ remarks are more broadly heard.
He cautioned, though, that both executives and virtual attendees lose by not being able to see the body language of speakers and other attendees.
Romanek said he suspects many companies’ top managers and boards of directors just don’t like facing shareholders at the annual rituals and want to avoid the security hassles and potential embarrassments of activist protesters, gadflies and shareholders’ pointed questions.
“Some senior managers really hate the meetings because they’re a pain,” Romanek said, adding many view them as a waste of time.
Romanek thinks dropping face-to-face meetings is a mistake, however.
“Shareholders only have one chance a year to look management in the eye and say ‘What’s going on here?’ “ he said. “It’s worth the company spending the money.”
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