AT&T to transparency-seeking shareholders: shut up and take what you're given


Where is the profit in delaying the inevitable?

Oh, right, quarterly-earning based thinking strikes again!


Excuse the corporate naivete, but if the shareholders have successfully voted and promoted an issue to the Board:

"Resolved, shareholders request that the Company publish semi-annual reports, subject to existing laws and regulation, providing metrics and discussion regarding requests for customer information by U.S. and foreign governments, at reasonable cost and omitting proprietary information."
the Board still retains the right to operate how they want. Because capitalism, so fuck you, shareholders. My reading of the request is that the shareholders were asking for "discussion" of requests and AT&T doesn't want to allow any precedence of transparency, even if they choose to define "discussion" in the most washed-down way possible. However, I'd also assume Mr. DiNapoli ran this by the Board prior to sending it out to shareholders and yet it remains in the final draft quoted by AT&T's letter, so either he was shooting for the stars, or maybe the possibility still exists for AT&T to share out some of that information?

This isn’t a profit thing. If you read the reasoning for excluding this from the proxy, AT&T has just declared that giving all business records to the NSA is a core business that cannot be brought up for discussion. They have just declared that they are not a telecom company, but an arm of the NSA. That’ll end well.


They may have run it by the Board, but that’s not a requirement for a shareholder raising a question. If they really wanted to press the issue, they could go to the shareholder meeting and bring it up directly in person.



Shareholders have the legal right to request any appropriately-filed resolution to the board of a public company be included in the Annual Report to Shareholders, to be voted on by all shareholders. The board can recommend a vote against the resolution, but they are required to present it in its entirety in the documentation.

And this wasn’t just some politically-minded individual who purchased a single share specifically to battle the company…the resolution was written by Thomas P. DiNapoli, New York’s comptroller, trustee of the $160.7 billion New York State Common Retirement Fund.

We have gotten to the point where businesses know that their lobbying dollars will exempt them from all laws they don’t want to follow. They don’t even have to pretend anymore.


Thanks–the article doesn’t make that clear. I get announcements of proxy votes for the few stocks I own, and those often contain resolutions brought forth by shareholders with recommendations on voting supplied by the Board. That said, I know nothing about how those resolutions are brought forth to the Board, and ultimately to a shareholder vote.
In mentioning running it by the board, I assumed DiNapoli did that given the size of his holdings.

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There are two boards in play here: AT&T and the NY State Common Retirement Fund.

edited to clarify: Mr DiNapoli would have had to discuss the resolution with the other trustees of the NY State Common Retirement Fund prior to sending the resolution to AT&T, as he was representing the Fund officially. And AT&T’s board would have discussed the resolution amongst themselves (and their lawyers), which resulted in the letter we’re seeing here. They’re trying to keep the resolution from having to show up in the Annual Report. They’re probably quite concerned that AT&T shareholders would, in fact, ratify the resolution if presented to them.

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Im a low level monkey working in telecomm, and yearly I am required to take a course, pass a test, and contractually agree to protecting customer privacy including procedures on how to handle customer data, personal responsibilities, legal repurcussions, and how to report others when violations are suspected. Im confident this is boiler plate stuff shared across the industry.

The irony, the faith crushing, everyone is a liar, no hope for the future, irony.


Right–that’s why I’m surprised at the language being so inclusive of corporate records, i.e. “providing discussion”, which could be read as asking for all internal company documentation about such requests and what to do about them, which could then include…gasp…opinions well to the contrary of what AT&T wants the public to hear (even though it’s more likely that AT&T’s internal opinion is something along the lines of “grind the consumer into paste”). That it was turned down surprises me not at all.

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What options do the shareholders have to appeal that decision? Is there any formal process beyond the Board saying ‘no’? I think in the arguments put forward, the idea that AT&T is compelled to comply due to a warrant from a secret court is ‘reasonable’ in that it’s not AT&T who’s volunteering the information but rather the government that is requesting it and they have to comply or face contempt of court. The first part of the letter, that turning over data to government is ‘ordinary business’ just makes me think I shall never use AT&T products or services.

It’d be interesting to see what happens if someone defies the US Government’s FISA court, though. What penalties could actually be exacted. Could someone actually be jailed on the basis of a secret court? Could assets be seized? I’m thinking probably not (at least without giving the game away that America is actually a totalitarian state)

Could licenses be revoked? Could a company be put out of business? Quite possibly.

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There are exceptions to the requirements of SEC Rule 14a-8 (The Shareholder Proposal Rule). AT&T is citing 14a-8(i)(7), which gives a corporation the right to exclude the proposal from the proxy statement “if the proposal deals with a matter relating to the company’s ordinary business operations.” This is not to say that providing info to the NSA is ordinary business operations (that is a different debate), but AT&T is arguing that the choice to produce a transparency report is part of ordinary business operations.

This is great, as I am just taking a break from studying this exact thing for my Corporations final and came across this article on one of my favorite websites.


Time for a minority shareholder lawsuit? Or maybe just show up at the annual meeting with a buddy with a video camera and make a stink about it?

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thanks for the bookmark. still doesn’t look like it applies to ‘management functions’.


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This is some seriously weird logic.

I think it’s very hard to defend the proposition that the extent to which AT&T has handed over customer information to the NSA is not information of interest to the shareholders - it’s evident from recent articles about how takeovers in Europe may be slowed or stopped, if nothing else. Fallout from the NSA cooperation will affect AT&T’s bottom line, and therefore the shareholders need to know.

But because the vote is “tell us what you’re doing”, and telling the shareholders things is an ordinary business function, they can’t be forced to do it by the shareholders? How can the shareholders ever force the company to share information it would rather keep to itself?

And I thought the point of capitalism was that companies were accountable to their shareholders?

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The excuse to keep shareholders from voting is seriously suspect. From a PR perspective, they should probably have allowed the question, but recommended against it. Besides, I don’t believe that this kind of vote is a binding requirement, just a request to consider production of the report. So just let the shareholders have their say and ignore it - that’s the way of capitalism.

If they did product the report, it would probably be “we’re not allowed by law to give this information out, so here’s a blank report”. How hard is that?

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I agree with you that that’s the loophole they’re trying to get this proposal filed under so they don’t have to comply.

I really hope NY State has enough pull to keep up the fight.

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The way I interpret this is basically AT&T saying: “we’d rather lose all our foreign business than possibly cross the government by even considering the possibility of defying unconstitutional orders.”

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Bottom line? The board can do whatever they like and the shareholders have exactly one recourse which is to fire them and elect a new board. There’s a lot of rules and procedures floating around it, but it comes down to that in the end: the board can twist and ignore everything and the shareholders have exactly one real power, which is the nuclear option. It falls to them to decide whether any particular issue is important enough to exercise that option, and boards can and routinely do get away with an awful lot by exploiting the fact that most issues are not that important to the shareholders.


Thanks, most people don’t understand how this works.

I fully support shareholder activism. It’s an old concept, but part of being a shareholder meant you have the responsibility to right some of the wrong of the company.

I do think this will not succeed, as far as I can see it is part of it’s operations, nothing about it’s books or records.

Here a quickie for those that still don’t understand: