Take Control Of Your Shareholding
March 16th, 2009
If you’re tired of seeing your money eroded by falling share prices, and the dividend being cut as well in some cases, you need to make your feelings known about how the company is being run.
First you should be voting your shares at the company meetings. Ultimately shareholders have the right to elect directors to look after their interests, and if you don’t vote, you don’t have a say.
When looking at candidates in board elections, check their backgrounds. A director who has overseen a disaster at another company may not fail a second time, but shareholders are entitled to know why they are considered a good candidate.
Remuneration reports should be scanned to see which directors are getting pay increases and the level of bonuses. The key personnel note in an annual report will tell you transactions directors and executives have been making with the company and how many shares they own. Any shareholder who has concerns should communicate directly to the company. Many companies invite shareholders to submit questions to be asked at the AGM.
You should be paying attention to these matters not just in bear markets, but also when prices are booming. Excesses in pay and problems with Boards are often apparent in the good times, but only get publicity when things go wrong.
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