Activist investors deploy a wide range of public and non-public forms of persuasion to compel change in their targets. Insofar as they take to the airwaves, their message–for better or worse–enters into that domain the ancients called “rhetoric.” And were we to visit them awhile, they would tell us that there are at least three means of persuasion: via 1) the speaker’s credibility, 2) the emotions of the audience, or 3) the grip of the argument itself. (Stanford EoP)
Some activists, perhaps those most enamored with their rhetorical flair (or rather, more generously, those gifted to entertain), take the complex route, weaving an elegant and elaborate discourse of personal anecdotes and earnest appeals. Yet, there is another way.
Stunningly simple, a written letter, seven sentences.
“Dear Fellow Shareholder,
HARI has publicly reported six full years of financial information. In each of the three years before its IPO, it reported a net loss. Since the IPO, our Company has produced subpar returns in each of the years for which financial results have been reported.[1] In every year for which information has been publicly reported except 2012, the CEO’s pay was greater than the earnings of the Bank.[2]
It is our belief that subpar returns are symptomatic of a poorly-run company with a board that does not hold its management team accountable. We believe it is now time to find a better-run community bank to buy HARI in an effort to maximize shareholder value. Our nominee, Mark Saladin, a partner of Zanck, Coen, Wright & Saladin, P.C., understands management responsibilities first-hand and will utilize his experience to push HARI’s Board in this direction.
Sincerely, Joseph Stilwell” [Preliminary Proxy]
Simple, yes–but rather potent.
Disclosure: No position
Wide Moat Investing 