when a group of investors in a company is unhappy with a company rsquo s performance 691652

When a group of investors in a company is unhappy with a company’s performance, it sometimes tries to elect new members to the board of directors at the company’s annual stockholder meeting. This is referred to as a proxy fight. Usually these efforts fail because it has been very expensive to get in contact with all of the company’s shareholders to try to convince them to vote for your group of nominees.But the Internet has changed that, says James Heard, chief executive of Proxy Monitor, a New York firm that consults institutional shareholders on how to vote on corporate governance issues. “Increasingly the Internet is being used as a tool of communication among shareholders to pressure managements,” he said. One recent case involved an effort by a shareholder at Lube’s to get four new people elected to that company’s board of directors. That shareholder attracted considerable support from other Lube’s shareholders by posting messages on a Yahoo! message board.