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Personal Finance > Investing
One stockholder's mission
December 19, 1997: 6:07 p.m. ET

Investor John Gilbert has spent about 50 years taking on big business
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NEW YORK (CNNfn) - John Gilbert's passion for stockholder meetings began a year before the crash of 1929 when he spent hours each day at the New York Public Library reading about Wall Street.
     As he pored through back newspaper issues, he began to follow how big companies ran their businesses. He was engrossed.
     "It was fascinating to me," said Gilbert, 83, a courtly man with a wide grin.
     Gilbert, a fixture at annual meetings with his late brother, Lewis, spoke about his activism in an interview with CNNfn Interactive at his upper East Side apartment recently.
     Lewis Gilbert, six years older than John, went to his first meeting in the early 1930s. Pretty soon, the two brothers were attending as a team.
     "Back then, there were no rules about speaking at meetings," Gilbert said. "People laughed at Lewis when he asked a question. Lewis couldn't understand it because he was a stockholder -- he was an owner, right?''
     That started a "crusade" at meetings across the country: General Motors, Mattel, PepsiCo, Ogden Corp., and many others.
     "We used to go to about 75 meetings every year," Gilbert said. "Now I've cut down -- only about 35 or so."
     The two Gilberts wrote letters to the New York Stock Exchange and the Securities and Exchange Commission. They produced their own "annual report" every year with information on dozens of companies.
     "When my brother and I started this crusade, we knew it wouldn't be cheap," Gilbert said.
     But the brothers were more than mere 'gadflies,' said Charles Elson, professor of corporate law at Stetson Law School. They were an important part of a landmark 1947 case, S.E.C. vs. Transamerica, that helped define shareholder rights.
     "This is the quintessential case of shareholder activism, and we can thank the Gilberts for it," Elson said. Elson cited the Transamerica case as among the ten that most influenced corporate governance.
     The Gilberts had wanted Transamerica to include a resolution on using outside auditors in the company's proxy statement. Transamerica balked. The S.E.C. sided with the brothers. An appeals court later ruled the resolution couldn't be excluded.
     "At the time, people thought the Gilberts were like Don Quixote. But because of that case, it legitimized the use of the shareholder resolution," Elson said.
     Gilbert hands out red noses at shareholder meetings because a company lawyer in the 1950s who was annoyed with his comments told him he was a clown.
     "I said, 'What's wrong with being a clown?'" Gilbert recalled with a shrug. Next year, he showed up at the meeting dressed as a clown.
     "You can do a lot more with humor," Gilbert said.
     Gilbert acknowledges he's slowing down these days: "I'm getting old," he likes to say. But he's continued the crusade after his brother's death four years ago.
     He maintains an office in his apartment with a fax machine, color printer, and a shelf stacked with red noses. A staff of two, who've worked for him for 35 years, keep track of his correspondence and the meetings.
     "I've been speaking out against things that are wrong," Gilbert said. "I talk sense and I do my homework."Back to top
     -- By staff writer Martine Costello

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