The Corporate Monitoring Newsletter

Issue #7 - May 2000

Written by Mark Latham

IN THIS ISSUE:

1. It's Time For "Stock-Vote-Bot"

2. SAVI Shareowner Proposal News

3. On-Line Discussion Groups
_____________________________________________________________

1. IT'S TIME FOR "STOCK-VOTE-BOT"

The components are rapidly falling into place for a major
shift in voting power from management to shareowners. The
next step is for online brokers to assemble the pieces into a
convenient tool.

CalPERS is now posting its voting decisions on the web, for
300 stocks, two weeks before each company's annual meeting
(linked from http://www.corpmon.com/Vote.htm). More and more
proxies can be voted at www.proxyvote.com and similar sites.
So online brokers could now offer individual investors an
automated voting function on the same websites where they
trade stocks.

With a few mouse-clicks, you could tell your broker's
software to vote all your stocks per management
recommendations automatically for the indefinite future,
until you change that setting. But since management has
conflicts of interest, you could instead have the software
vote the same way as CalPERS, a fellow shareowner with
professionally researched voting decisions. Guess which I
would choose!

Once this software becomes available, voting advice will
proliferate on the web. CalPERS will cover more stocks, and
other advisors will start competing for shareowners' trust.
Management will lose its monopoly on advising individual
investors, who own about 40% of large companies' shares. And
the unprecedented convenience of automated voting will induce
many individuals to vote for the first time.

Where will this lead? See "The Internet Will Drive Corporate
Monitoring" at http://www.corpmon.com/publications.htm, where
you can also find "Internet-based Stock Voting Advice
Systems", outlining the data flow design needed to support
this development.

The incentive for brokers (and for developers of Quicken
and Microsoft Money) to build this new voting function is
that it will attract those investors who want to vote their
stock. It will be seen as a cutting-edge development that
benefits all shareowners, even those who don't vote. A top
priority of the Corporate Monitoring Project is now to let
brokers and software developers know about this opportunity.
_____________________________________________________________

2. SAVI SHAREOWNER PROPOSAL NEWS

Shareowners' Alternative Voting Information -- our SAVI
proposal to hire a proxy advisory firm chosen by shareowner
vote has gained exposure, but not much support yet. At the
Washington Mutual shareowners' meeting on April 18, it only
got 4% of the vote, according to management's announced
preliminary results. At the Whole Foods Market meeting on
March 27, no percentage result was announced; it will be
published in June.

Some influential opinions: Trillium Asset Management, a
social investment fund, voted FOR SAVI at Whole Foods.
CalPERS voted AGAINST SAVI at Washington Mutual, as did
Domini Social Investments. Advisory firm Proxy Monitor
recommended voting AGAINST SAVI at Whole Foods and at
Washington Mutual. Advisor ISS recommended AGAINST SAVI at
Whole Foods. I expect all those mentioned here hold
consistent opinions about SAVI at both these companies, but I
have only reported the views I know about.

My response to ISS is on the web at
http://www.corpmon.com/ResponseToISS.htm
Related questions and answers are at
http://www.corpmon.com/ProposalFAQ.htm

Looks like it will take time for investors to understand the
merits of this proposal! I expect those merits to become
clearer once individual investors start linking their voting
to advice available on the web.

We have submitted the SAVI proposal to two more companies:
Cirrus Logic and Oregon Trail Financial. Cirrus has not
asked the SEC for an okay to keep it out of their proxy, so
presumably it will be included. Oregon Trail is arguing to
keep it out, but without reference to Rule 14a-(i)(8) --
"relates to director election" -- which had been our
Achilles' heel until we explicitly excluded advice on
director elections. Progress will be announced in future
newsletters and at http://www.corpmon.com .
_____________________________________________________________

3. ON-LINE DISCUSSION GROUPS

The Corporate Monitoring message board at Motley Fool,
http://boards.fool.com/Messages.asp?id=1380545000001000
lacks any critical mass of participants so far, but there's
been some related discussion at eRaider's Corporate
Governance message board --
http://www.eraider.com/messagelist.cfm?topicID=21&catID=28

They have an intelligent group of participants with a broader
topic, and eRaider has an interesting activism strategy.

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