Gretchen Morgenson Has Eaten Her Wheaties, and Tears into Marty Lipton...
Marty Lipton has driven the New York Times's Gretchen Morgenson into shrillness:
Memo to Shareholders: Shut Up - New York Times: TO all those public company shareholders who are trying to make directors more accountable to owners and more watchful over executives: Cheer up. Your efforts seem to be gaining genuine traction. How do we know? Martin Lipton told us so... founding partner of Wachtell, Lipton, Rosen & Katz... invented the poison pill.... More recently, Mr. Lipton has become the apologist for embattled chief executives who don't like shareholders sounding off on excessive pay and cozy boards.
Last week, he sounded a grave warning at the 25th annual Institute on Federal Securities in Miami. "Today shareholder activism is ripping through the boardrooms of public corporations and threatening the future of American business."... Directors are under siege, he averred, thanks to shareholder activists.... Finally, Mr. Lipton thundered: "We cannot afford continuing attacks on the board of directors. It is time to recognize the threat to our economy and reverse the trend."... Mr. Lipton also asked such fundamental questions as whether qualified people would agree to serve as directors in the current environment and whether directors would become so risk-averse that their companies would suffer.
Those are both worthwhile topics for a reasoned, probing discussion. But the sheer desperation in Mr. Lipton's speech... may have been the best proof yet that shareholders' rightful demands to make directors more accountable are getting results. Mr. Lipton did not return a phone call seeking comment....
"It's almost like listening to a small boy who has lost his favorite toy--in this case the poison pill"... said Herbert A. Denton, president of Providence Capital in New York... adviser to minority shareholders....
If the public corporation is an endangered species, as Mr. Lipton argued, it is not because of shareholders. Those who owned stock in Enron, WorldCom, Adelphia and Tyco did not create the scandals that rocked those companies and sowed mistrust among others. Selfish managers and passive directors did that work handily. Almost everyone gets nostalgic, of course. And Mr. Lipton may pine for the days when the poison pill reigned supreme, his chief-executive clients were safe and boards resided quietly in their Amen corner...
