One of the problems sponsoring an upsurge of shareholder relations projects has been a rash of proxy fights. Since the fight for control of the New York Central RR, Montgomery Ward, Libby, and others, there has been little corporate management complacent about conditions which might invite or induce a proxy raid.
Other interesting aspects have been a rash of mergers, and an increased emphasis on the diversification concept which finds companies venturing out into product fields entirely new to them.
Programs to improve communications and strengthen ties between shareholders and management have included meetings in major cities remote from corporate headquarters, campaigns to spread stock ownership broadly or among special groups such as employees, and educational efforts to sell shareholders a particular viewpoint.
The variety, if not the scope, can be gleaned from the following examples.
Meetings
Caterpillar Tractor in Peoria was host to a large body of the National Federation of Financial Analysts Societies on the occasion of a convention in Chicago. A special train brought the analysts to Peoria. The day's program led off with an equipment demonstration on the Research Proving Grounds and was followed by a tour of the Diesel Engine Factory. There was a luncheon in a Caterpillar cafeteria and then a discussion period with company executives answering questions concerning operations, financial position, and outlook. As follow through each guest received a letter from the Caterpillar president. When the analysts visited Motorola each was given a specially prepared dictionary of electronics terms so the technical language he heard would not sail over his head.
Matson Lines, years ago, began holding their annual meeting aboard the luxury liner Lurline. Tire purpose was to increase attendance by glamorizing the occasion. Attendance in short order boomed from an average 20 to 700. This was all the more remarkable because total shareholders numbered 2,000. A typical meeting agenda included the formal business, a company film, inspection of premises, and a Hawaiian luncheon.
Whiting Corporation moved its shareholder meetings to various cities. The purpose was to give home headquarters executives a closer feel of local conditions.
The Detroit Football Company wanted to bring its stockholders closer to the operation of the club. It invited them to a special practice of the Lions when the men were preparing to defend their National Football League Championship. A lunch after practice enabled the stockholders to talk with the players and the management.
Foote Mineral Company in Pennsylvania took 200 stockholders for a plant tour by closed circuit TV. The tour covered 81 acres. Stockholders got a clear picture without getting sore feet at the same time.
Telling the Story
A broker industry educational program has attracted such participants as Chrysler, GE, Republic Steel, United Air Lines, and Zenith Radio Companies on the New York Stock Exchange. Via a public relations firm, the participating companies tell their stories with exhibits in more than 200 street level brokers' windows in major U.S. cities.
Sheller Manufacturing Corporation got up a brochure Highlights telling its story to selected audiences. Then personal calls were paid to Wall Street people. A personal letter of welcome went from the president to each new stock purchaser. Breezy dividend enclosures were developed.
Delta Air Lines and Chicago and Southern Air Lines, on their merger, sent a broadside to all stockholders. It explained in detail how the merger would cut maintenance costs, had financial advantages, and was in the public interest.
Pittsburgh Plate Glass included a one page history of the company short and sweet with its annual report.
In the struggle for directorships between the Wolfsan group and the Montgomery Ward administration then in the saddle, differing techniques to tell the story were employed. The Wolfsan strategy emphasized mass meetings with stockholders, and the press in attendance. The MW administration, starting with President Kridcr, stressed quiet calls on stockholders individually for unpublicized personal talks.
Dravo Corporation, to get more mileage on its annual report, sent copies to sales personnel in the U.S. and Canada. Other companies have extended circulation to the press, the investment fraternities, schools, libraries, and even lists of Cadillac owners.
Like many others, National Dairy Products Corp. adopted a practice of sending annual report copies to opinion leaders. On the list were public health officials, doctors, dentists, educators, editors, and ministers.
The Hawaiian Telephone Company had a unique way of reporting to shareholders at its annual meeting. The president, of course, told the balance sheet facts. Then 16 employees told what their duties were and how their functions related to the sum total objective of supplying good telephone service. Each employee spoke two minutes and was supported by color slide films. The whole program took less than 40 minutes.
Lehn and Fink, a 79 year old pharmaceutical firm, mailed its 100th dividend payment in special gold folders.
Hawaiian Sugar Planter's Association told its annual report story on a 16mm film. Merrill, Lynch, Pierce, Fanner and Bane made points in conducting classes for women investors throughout the country.
Putting Shareholders to Work
Atlas Powder Company wanted to feel sure its stockholders would have a good word about it for anyone who asked. A folder went to stockholders containing more vim and vigor than most advertisements. One paragraph said that as an unofficial sales representative you may have opportunities to talk about Atlas good reputation and to encourage the use of your company's products.
The Western Union Telegraph Company, by virtue of its numerous office locations, can undertake face to face projects uneconomical for most companies. For example, they pioneered a program of having company representatives personally call on all shareholders.
Certified Finance Company, Tonawanda, N.Y., had a continuing need for additional capital. The program devised sought to induce present shareholders to keep their stock and to make the company better known to potential new stock purchasers.
To interest employees in a stock purchase plan the company's president visited all offices and told the company's story.
As for outsiders, each new stockholder was welcomed by letter. Large purchasers were seen in person. A pay as you go plan was set up. Messages went out with dividends. The annual report was enlivened. Institutional ads were run in the company's neighboring communities. When a branch office was opened, it became the occasion for an open house with a five dollar raise announced for all employees.
Results were the easy sale of debentures, a waiting list to buy stock, and 80 per cent of the employees became stockholders.
Projects off the Beaten Track
Argus Camera, Inc. got a letter from a ten year old boy. He was a camera bug. He wanted to buy one share of stock from the company president. On appeal from Argus, and recognizing a good publicity vehicle, the Stock Exchange relaxed its rules. The boy was permitted to buy his share of stock on the trading floor. He came to New York for the big moment, and was coached in his purchase by the Argus prexy.
United Fruit Company offered to take its 72,000 stockholders on a 12 day trip through the banana plantation in Tiquisate. The flight from Guatemala City to Tiquisate was the free part of the offer. The only other inducement was the idea of traveling with fellow shareholders. Some 270 made the trip.
Motorola, Inc., held a contest among its shareholders. The one submitting the best letter of suggestion won a trip to the Chicago headquarters. The Stockholder of the Year met corporation officials, toured the plants, and received a trophy at a dinner with management.
In its letters of welcome to new stockholders, the Parker Pen Company enclosed a full color postcard of its modern new factor in Wisconsin.
General Foods issued an unusual kind of report to its stockholders. It was called Item. In the Item were recipes, anecdotes, and product descriptions. The whole thing was in chatty, friendly vein.
When a Copper Company stockholder closed his account he or she heard from the president. He was asked the reasons. The president expressed appreciation for personal reasons, but wanted to know if there was any dissatisfaction. There have been many problems deaths, changes of name, etc. but over all results were reported more than satisfactory. In one three month period three ex holders wrote to say they were so impressed by the president's interest they'd purchase again sometime.
