5 Min Read
NEW YORK (Reuters) - Forget the goody bags. Many shareholders accustomed to grabbing free food and gifts at U.S. corporate annual meetings are going home empty-handed.
Citigroup, 3M Co, Hershey Co and other big businesses have scaled back the freebies at their yearly stockholder gatherings, deciding to send a message of austerity to investors amid the rough economy.
The annual meeting is a corporate rite in which stockholders typically elect members of the board of directors, approve the appointment of outside auditors and listen to management deliver optimistic remarks about the business.
Most individual investors never go to these meetings, usually held in the spring by companies whose fiscal years end in December. But some do turn up in part because they are enticed by a free lunch, gifts or live entertainment.
But some meetings are being held without the frills these days. Citigroup, for example, did not supply the coffee and pastries it has historically provided when it held its annual gathering earlier this week.
Citigroup Chairman Richard Parsons told stockholders that offering refreshments would have required the bank to rent more space at the Midtown Manhattan hotel where the meeting took place, increasing the expense of the event. In these times, he said, saving money is a good thing.
With the government funneling $45 billion of capital into the bank and the company's share price in the doldrums, many people might agree with the no-doughnuts policy.
3M's shareholders already have been told not to expect any frills at the industrial manufacturer's May 12 meeting in St. Paul, Minnesota.
The company informed them in a note enclosed with its annual report that this year's meeting will be "somewhat different." That means no lunch -- and no gift bags stuffed with 3M products such as Post-it notes and bandages either.
Hershey shareholders, set to meet on April 30, also will forego the treats the company traditionally has distributed.
The change is not a cost-cutting move but is related to the economic turmoil, said spokesman Kirk Saville. He said the Pennsylvania-based candymaker decided to donate money to a local food bank in lieu of giving shareholder gifts.
"This change is consistent with our long-term commitment to the community," Saville said.
The Walt Disney Co held its annual meeting last month at a theater in a gritty section of Oakland, California, a less ritzy affair than past events that have featured live entertainment, such as life-sized cartoon characters and singer Randy Newman performing live for shareholders two years ago.
Live entertainment has been a feature of Wal-Mart Stores Inc's annual meetings, with performances by singers including Garth Brooks and Jessica Simpson.
The world's largest retailer -- which has fared better than many other big businesses amid the recession as shoppers seek its low prices on household staples -- said the identity of the performer is always a surprise for the people who attend the meeting. A spokesman declined to comment about any specific plans surrounding this year's gathering, set for June 5.
Some companies do not traditionally provide meeting treats. A spokesman for Bank of America Corp, for instance, said the company has not given out coffee, food or other things at its gatherings, and plans no changes this year.
The bank's shareholders likely won't need any caffeine to be fueled up for this year's meeting, though. Many shareholders are furious over the company's controversial acquisition of troubled investment bank Merrill Lynch & Co, and are weighing a proposal to strip Chief Executive Kenneth Lewis of power by throwing him off the board of directors.
But gift-giving is business as usual at some companies. Procter & Gamble Co, which holds its annual gatherings in October, said it gave out goody bags as usual last year and is not planning anything different for this fall's gathering.
Starbucks Corp, meanwhile, gave out a pound of coffee and a three-packet envelope of its new Via instant coffee blend at its March 18 meeting.
Also keeping up the gift-giving was spice maker McCormick & Co Inc. Shareholders received free samples including marinade, a Teriyaki noodle bowl meal, a cinnamon grinder and Creole mustard at its March meeting, spokesman Jim Lynn said.
"They leave happy because they have a stock that over time has done very well by them," he said. "And they also get a nice bag of products."
Additional reporting by Gina Keating in Los Angeles and Jonathan Stempel and Dan Wilchins in New York; Editing by Steve Orlofsky