The 2013 Reynolds American, Inc. Annual Shareholders Meeting: orders, points of order, “out of order” and ordered out!
May 14th, 2013
By Edward L. Sweda, J.D.
As the hour of 9:00 A.M. approached on May 9, 2013, the date of Reynolds American, Inc.’s (RAI) Annual Shareholders Meeting in Winston-Salem, North Carolina, the atmosphere seemed more contentious than in previous years. In addition to the tight security that included the wanding of shareholders for anything metallic in their possession, the removal of suit jackets and the emptying of all pockets, Reynolds American management had arranged for the presence of four uniformed Winston-Salem police officers inside the meeting room. That contingent of police supplemented several officers stationed outside the Reynolds American building at 401 North Main Street.
Running the meeting was the Chairman of RAI’s Board of Directors, Tom Wajnert, who pleasantly wished the audience a good morning and commented on the beautiful, sunny weather outside. Mr. Wajnert’s pleasant demeanor lasted less than a minute when, after addressing “points of information” by two shareholders who asked about the tardiness of the company’s response to written questions submitted at the 2012 Annual Shareholders Meeting, he declared that a third shareholder who began to raise a point of information was engaging in “silliness’ and was “out of order.”
After Mr. Wajnert proclaimed from the podium that he would “not tolerate disruptive behavior,” he turned the forum over to RAI President and Chief Executive Officer Daan Delen, who provided a report on the company’s activities in 2012. Delen trumpeted his company’s increasing endeavors in the field of tobacco harm reduction and boasted about RAI’s “innovation,” noting that Camel snus has 80% of the snus market. Delen also touted Zonnic, a nicotine gum, and Vuse, a brand of e-cigarettes whose distribution will be expanded in 2013.
In the presence of many shareholders who are concerned about the deplorable conditions under which migrant farm workers toil in tobacco growing fields, Delen praised the audit of North Carolina farms his company conducted since the 2012 Annual Shareholders Meeting and R.J. Reynolds’ “Good Manufacturing Practices” program, as well as its health and safety training DVDs. [Members of the Farm Labor Organizing Committee (FLOC) demonstrated outside the building throughout the morning.
Finally, Delen, mentioned the increased transparency of the company’s disclosure of its political contributions on its website. This decision had followed the submission by the Province of St. Joseph of the Capuchin Order in Milwaukee and Rev. Michael Crosby, of a proposed shareholder resolution calling on the company to do so. That proposal was withdrawn by the sponsor following RAI’s disclosure.
What Mr. Delen did not give shareholders – for the first time in this author’s lengthy history of attending tobacco company annual shareholders meetings – was any comment about any aspect of tobacco litigation. Delen’s silence on this issue came less than two months after the Florida Supreme Court resoundingly rejected the tobacco industry’s legal argument that the way Engle Progeny trials have been conducted since 2009 violates the industry’s due process rights.
During Senior Vice President Dara Folan’s report on an advisory vote for compensation to board members, a shareholder from the audience attempted to make a point of order. Mr. Wajnert immediately declared that shareholders should “stop playing a stand-up game,” and, without knowing the issue the shareholder was trying to raise, determined that person to be “out of order” and declared that he “won’t tolerate interruptions.”
After a supporter and a seconder of an AFL-CIO-backed shareholder resolution calling for the annual election of board members to replace the current three-year staggered terms made their presentations (the resolution was defeated), the next order of business was the question-and-answer session.
In its agenda distributed to attendees, RAI informed the audience that it had allotted all of 25 minutes to consider questions from shareholders. As soon as the meeting’s Q&A session was declared open, Dr. Sharon Brown, a grandmother and a shareholder from Pennsylvania, who was seated second from the aisle where the company’s sole microphone for audience members was situated, stood up and attempted to get to the microphone. Sitting to her right was a male employee of RAI who neither rose to allow Dr. Brown to get by, nor moved his legs sufficiently to allow her by. This author, who had been seated immediately to Dr. Brown’s left and was intending to follow her to the microphone, instead saw Dr. Brown fall to the floor after she attempted to get by the RAI employee. By the time Dr. Brown was able – without any assistance whatsoever from the RAI employee who was at the microphone or from the RAI employee who had been sitting to her right – to get back onto her feet, approximately fifteen people had formed a line leading to the lone microphone. The RAI employee at the microphone ordered Dr. Brown to go to the end of the line.
After the allotted 25 minutes had expired and with eleven people still standing in line to ask a question, Mr. Wajnert announced that he would take two final questions. After those two final questions had been asked and answered, Dr. Brown went to the microphone and, noting that the day before she had attended the Philip Morris International Annual Shareholders Meeting in New York City, a meeting where more than an hour was allotted for questions, asked that more time be allowed for shareholders’ questions.
Mr. Wajnert emphatically denied that request. When Dr. Brown then noted that she had been tripped while attempting to approach the microphone and that she had been similarly tripped at the company’s 2011 Annual Shareholders Meeting, Mr. Wajnert’s response was to call on security, including the Winston-Salem police officers, to remove her from the meeting room on the grounds that she was “out of order.”
The meeting was adjourned several minutes after the ejection of Dr. Sharon Brown.