And if management is following the same policy that I would follow if I owned the whole place, that's management I like. Additionally, you want to know if there are major shareholders who don't serve on the board. Anyone owning more than 5 percent of a company's stock will be reported in the proxy statement. Even if they don't serve on the board, major shareholders can influence corporate policy. Location And Conduct Pay attention to where the annual meeting is held and how it is conducted.
Some companies hold bare-bones meetings and others put on stylish affairs.
The meeting should be appropriate for the company's line of business, its image and for its financial condition. Be circumspect about a company that squelches shareholder participation. You can learn a lot by asking questions and by listening to the questions of other shareholders. In the early 1990s Salomon Brothers, the New York investment banking house, nearly collapsed due to a scandal involving bond trading improprieties. Because Berkshire Hathaway was a major shareholder in Salomon Brothers, Buffett was enlisted to act as temporary chairman to help the company through the crisis.