Today, Dendreon had its annual shareholders meeting (what I shorten to ASM out of habit, but the real title is Annual Meeting of Stockholders.) Despite images of corporate America, no trumpets blared, no champagne flowed, very little gold was on display. At least that was the case for the public meeting. Considering how much management is paid it wouldn’t be surprising to learn that caviar was involved after the public left. Corporate America is caricatured, and a caricature is an abstraction. I like to walk in and check on reality. Sometimes the caricature isn’t too far off.
The meeting was held at Seattle’s Art Museum, affectionately known as SAM. The ASM was held at SAM. Nice place. If I wasn’t rushing around catching ferries and buses, and being driven by the desire to write, I might have hung around to look at Art. But, evidently I am a writer and an investor to the point that I attended without breakfast (gotta catch the right ferry to catch the right bus) and without lunch (when do the buses head from downtown America back to my island so I can write?). Two hours each way, I sympathize with the commuters who do that every day.
The total trip took six hours. The meeting took one. For those that want the details about the meeting, head out to the DNDN boards on The Motley Fool, Investor Village, and Silicon Investor. I post the full notes there so comments and replies can benefit broader audiences. For those that want a bit of the emotion and culture shock, stay tuned.
I’ve blogged before about the culture shock of traveling to Merika. Island life is stereotypically slow, quiet, and casual. Thirty years ago, Seattle was slow, quiet, and casual. Now, it is frantic, noisy, and populated with fashionistas. People from NYC and LA may disagree. Imagine the shock I’d undergo if I went to the big cities. It wasn’t always that way. Very few wanted to move to Seattle in 1980. I did because I’d landed a nice job at Boeing Commercial Airplanes. I was a young aerospace engineer and learned the trade on 747s. Suits weren’t required, or at least it didn’t appear that way. I dealt with computers. They didn’t care how I dressed. Microsoft, Starbucks, and Frazier may have changed Seattle.
About 100 people showed up for today’s Dendreon meeting. Only about a third weren’t in suits and such. In general, the casually dressed sat in the back, and were the individual investors, not the officers, directors, or financiers. Young companies tend to have small meetings. A hundred is typical until some spike in popularity that swells the crowd into the thousands. That was fun watching happen at Microsoft and Starbucks.
I attend the meetings to see the people. Are the officers happy to see individuals show up, or are they a nuisance? Does management mingle or cluster? Are employees attending, and what’s their mood? I want data about the company. That is the purpose of the meeting. The owners get to hear how their company is being managed; but, I also know that corporate speak can conceal instead of reveal. I show up anyway. They might actually say something, and even if they don’t, the crowd reaction can be very educational.
This meeting was more caricature and stereotype than usual, even moreso than MicroVision‘s from last week. The suits talked amongst themselves. I saw very little interaction. There was even a roped off section, a security guard (possibly Seattle Police), a photo ID check at check-in, and specified rules for expulsion. They weren’t called “rules for expulsion” on the sheet, but someone described them to me that way.
The business presentation was clinically clean. Previous meetings threw up disclaimers, and then tried to educate the audience. This meeting had the necessarily identical disclaimer, but then said far less. The change felt similar to the transfer within ICOS as it passed from the passionate founder’s era, to the detailed data development phase, and then to the corporate buyout phase. The passion and personal connection faded at each phase. I felt uneasy at that time too.
The unscripted parts are the most revealing, and that’s why the question and answer period is so intriguing. Go to the boards for the longer list. Allow me to highlight one item that exemplified cultural collisions.
In response to a question about the stock price, the CEO noted that no one else in the room wanted the price to go higher than he did. I almost said something out loud, but then remembered the rules for expulsion. In large part because of DNDN’s collapse I have been looking for a job (see My Jobs Report Month 9), am having to sell my house (see Home For Sale Alas), and have never had more uncertainty in my life (see Too Many IFs). I contend that he is not having to sell his house to find money for living expenses, is not looking for a job, and has not had to sell off 66% of his shares and most of an IRA in the interim. I strongly suspect that returning DNDN to $60 would have a much greater affect on my life than it would on his.
There is a disconnect within some companies, where the upper management seem disconnected from other economic realities. In one edit of my book (Dream. Invest. Live. – the basis of this blog) I recount the story of another company’s board bemoaning his water bill. He had a house in the southwest. Irrigating the lawn was costing him too much. He complained about the water rates. He didn’t question watering the desert. He didn’t recognize that his water bill was more than some people’s living expenses. He acted as if everyone has such issues. The other folks sitting with me in the back row raised eyebrows too.
I think one of America’s strengths is that individuals can participate in investing. Yet, there are too many examples of excessive corporate compensation and a disconnect with the folks in the back row. I think part of the problem is that the compensation doesn’t seem excessive from within that class that is caricatured, yet the more they receive, the larger the gap becomes. At times like that I wish corporate voting was based on one vote per shareholder instead of one vote per share. But I don’t expect that to happen.
This has been a long day, and while I spent this time to learn about the clinical and financial aspects of Dendreon, I think I learned more about how segmented America has become: rich and poor, urban and rural. Shareholders own corporations, which is one lever that can make the necessary changes. Citizens control a country, and our votes are one way we can affect change. I wonder how this will turn out.