Saturday, May 2, 2009

Voting against Lu

Required Vote
Each director must be elected by a majority of the votes cast, meaning that the number of shares entitled to vote on the election of directors and represented in person or by proxy at the Annual Meeting casting their vote "FOR" a director must exceed the number of votes "AGAINST" a director. Abstention votes with respect to the election of directors will be counted for purposes of determining the presence or absence of a quorum at the Annual Meeting but will have no other legal effect upon election of directors. You may not cumulate your votes for the election of directors. If a nominee for director fails to receive the required number of votes for election, he or she is required to tender his or her resignation to the Board. In such a case, the Nominating and Corporate Governance Committee of the Board has the option of accepting or declining such resignation, considering any factors that the Committee deems relevant.


Given the performance of the company and the stock price, it is obvious that Hong Lu should not be re-elected. The fact that the current board is recommending his re-election is further proof that the entire board doesn't have "outside" shareholder's best interest and are determined to maintain the status quo of high management/board compensation and poor company/share price performance. Despite this clarity to remove Lu, it will be an uphill climb due to the number of shares the insiders hold. Softbank alone has about 15m shares. Nevertheless, I am hoping to rally "outside" shareholders to vote against Lu. I am hoping the new rule of majority votes will help. I am hoping that Wu, Huang, Barton, and other former executives may actually care about the share price and vote against Lu. I am hoping that the retail shareholder base that is more significant now and the current institutional holders are so fed up that they actually take some time to vote.

Last week, there was an unusually high amount of visits to the blog from China. I and all the long-term shareholders would be open to any suggestions coming from China to improve company performance and board/management accountability.

If you still own shares, this is one of the few outlets to have your voice heard. There are still a huge number of shares out there and I encourage all the shareholders to vote against the re-election of Lu.

Have a good weekend.