Page 265 - Executive Warfare

The New Bosses

There were also digital clocks at the front of the stage that counted
down the brief amount of time that each shareholder was allowed to
speak. Nocera notes, “In the meeting’s aftermath, the timers became a
symbol of the authoritarian, contemptuous way he had treated share-
holders. They surely hastened his demise.”
In an open forum like this, you must be gracious and not too thin-
skinned to respond to tough questions.
Be careful, however, with investors whose agendas do not match the
agendas of your other donors or shareholders. The rise of hedge funds is
dangerous for executives because hedge
fund managers are generally not inter-
ested in holding the stock for a long WE’VE BECOME A
time—only in making a quick killing. CULTURE OF
Depending on whether those hedge PEOPLE WHO
fund managers are taking a long or EXPECT AND
short position in your company, it’s in DEMAND HIGH
their interest to push your stock up or RETURNS.
down. And they have the clout to do it.
They may buy just enough stock to
come to meetings and question you so that they can make the rest of your
audience uneasy.
Or they can talk to the press and spread false rumors about you. Is this
legal? No. Does it happen? Yes. These fictions can play havoc with your
stock, but I don’t believe in giving in to market manipulators. As CEO of
John Hancock, I generally refused to see anybody who owned less than
three percent of the company. I rarely met with hedge fund managers, pre-
ferring that they sell the stock instead.
Of course, you may be out of this game entirely, thanks to one of the
private equity firms that have bought public companies at an astounding
clip in recent years. A private equity owner can help you to escape some
of the perversities of the stock market, as well as some of the regulatory
scrutiny and compliance burdens of being a public company.

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