Corporate Finance: Instructor\'s Manual Applied Corporate Finance

(Amelia) #1
Aswath Damodaran 47

The Stockholder Backlash


! Institutional investors such as Calpers and the Lens Funds have become much
more active in monitoring companies that they invest in and demanding
changes in the way in which business is done
! Individuals like Michael Price specialize in taking large positions in
companies which they feel need to change their ways (Chase, Dow Jones,
Readers’ Digest) and push for change
! At annual meetings, stockholders have taken to expressing their displeasure
with incumbent management by voting against their compensation contracts
or their board of directors

All of these developments represent the backlash to managers putting their


interests over stockholder interests.

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