Not a shareholder rising but a Tienanmen Square moment..

A fab article from Luigi Zingales:

The ongoing global economic crisis is not only causing incumbent governments to lose elections; it is also shaking corporate boards. When stock prices and profits seemed to defy gravity, shareholders’ meetings resembled American political conventions: a show to promote a company’s image, rather than a forum to debate contentious issues. This year’s round of annual general meetings has been different. Frustrated by low returns, investors are much feistier.

At Credit Suisse and Barclays, for example, more than a quarter of shareholders rejected the pay package proposed by management. At Citigroup, a majority of shareholders rejected managers’ pay at Citigroup – the first S&P 500 company at which that happened.

This has led some people to believe that there is some kind of shareholder spring. However, it is just a shareholder struggle which is then undone by powerful groups:

But many commentators’ hyperbolic depiction of a “shareholders’ spring,” with its resonance of ousted Arab dictators, is inappropriate for several reasons, not the least of which is the fact that the Arab Spring actually toppled regimes. At the moment, the current shareholders’ revolt is failing to achieve any significant result.

When describing shareholders’ struggle to make board members accountable, the right analogy is not the Arab Spring, but the protests at Beijing’s Tiananmen Square two decades ago. In 1989, the Chinese Government sent troops to repress the country’s pro-democracy movement. In a similar vein, the Business Roundtable, composed of CEOs of major US corporations, has deployed brigades of lawyers to squelch shareholders’ aspirations.

Superb reading..