Executives cower from this gadfly in the ointment

TRIGAUX E-mail: Click here Archive

© St. Petersburg Times
published May 22, 2002

Tall and imperial, J.P. Morgan Chase chief executive Bill Harrison commands global respect as the head of a banking giant richer and more influential than most of the world's nations.

So it's no surprise on Tuesday that Harrison stands at the podium, ready to take complete charge of his company's annual shareholder meeting. Given the bank's lousy performance, Harrison's only too happy to be holding this year's annual meeting in Tampa -- mercifully far from the madding hometown New York crowd.

After all, Morgan Chase's net income fell 70 percent last year. Stockholders lost 20 percent. Yet Harrison somehow managed to get a $10-million extra bonus for a total pay package of $17.5-million, an astonishing increase of 80 percent from the prior year.

Not to worry. It looks like a friendly bunch showing up at the bank's handsome J.P. Morgan Treasury Technologies complex in east Tampa, just south of where I-4 crosses I-75.

There's only one little problem. Her name is Evelyn Y. Davis.

Davis is Harrison's bane. In fact, she is a royal pain in the asset of dozens of Fortune 500 CEOs, who once a year must confront a tongue-lashing by this feisty 72-year-old shareholder activist.

Davis, you see, is queen of the corporate gadfly set. People magazine dubbed her "America's Most Dreaded Corporate Gadfly." U.S. News & World Report called Davis "the woman they (chief executive officers) love to avoid."

Tuesday, it is Harrison's turn to feel like a tyke in knickers, caught redhanded, whose ear is sternly held by Mother Superior. Davis, who lives in Washington, is not slowed by a plane flight and car trip out to Morgan Chase's suburban facility in Tampa.

To many of the 200-plus, uninitiated shareholders and local J.P. Morgan Chase employees in attendance, Davis looks like a cute grandmother. Oh, they think, here's another little retiree shareholder who will ask an innocent question.

At the podium, Harrison knows better. His body language says he is bracing, anxious to retain control of the shareholders meeting without losing his cool or becoming insulting. His arms are tightly crossed. Is he having trouble breathing?

Disarmingly petite in size, Davis is endowed with a piercing Germanic accent that becomes a powerful weapon when she controls a microphone. She introduces herself as a shareholder with just over 1,000 shares and, she says in a perfect deadpan voice, a depositor so "big" that "without me, the bank would be broke." The audience laughs. It won't be the last time.

Bill, says Davis, who goes at once for the jugular at full decibel, Vot about Enron? How much vas at stake?

Davis is right on target and Harrison privately winces. Morgan Chase was a big lender to Enron and lost hundreds of millions of dollars when the Houston energy company declared bankruptcy. He tries to deflect her questions.

"Evelyn, I'd like to hold any question..." But Harrison is immediately cut off. After all, Davis is a pro at this. She's just getting warmed up.

This is a losing battle. Harrison explains how Morgan Chase loaned $500-million, unsecured, to Enron before the meltdown.

"Enron was a terrible situation," he acknowledges. "We have learned some lessons and hope to become a better company."

Davis wants to know why a Morgan Chase executive was on the board of failed Global Crossing, a Enron-like telecommunications giant. She advises Harrison how the bank should trim its use of auditor PricewaterhouseCoopers for non-audit-related services. Other questions burst from Davis like gun shots.

By now, attending shareholders and area employees appear stunned (who is this odd woman?), amused (there goes Evelyn, again!) or scowling (I'm missing work for this?).

A few other shareholders manage to grab the microphone to ask some key questions (Mr. Harrison, your compensation rose 75 percent while the company's stock fell. Why?) But they are swept away in the Davis whirlwind.

Vot about speculative investments? Vot about hackers -- does the bank keep paper records?

How much is the bank spending for all this sorry security at the annual meeting? Bill, have you thought about less quantity and more quality?

Harrison says he'll get back to Davis with an estimate of security costs.

Send me a letter with your signature, Davis insists. You know I don't read anybody else.

I first encountered Evelyn Y. Davis 22 years ago when I was covering the annual meeting of New York's Citicorp. Citicorp was the nation's dominant banking company, run by the industry's most imposing and patrician CEO, Walter Wriston. Nobody messed with Wriston.

So I thought, until Davis stood up. Valter, she said, this bank of yours is a mess!

Born in Amsterdam, Davis says she, her mother and brother were sent to a concentration camp in 1942 while her father was on a business trip in the United States. They survived and joined her father in this country after the war.

Davis started investing with securities inherited from her father, a faculty member at the Johns Hopkins School of Medicine. She now has stakes in more than 100 blue-chip companies, and attends about 40 annual stockholders meetings each year. She shares her wealth with universities through her Evelyn Y. Davis Foundation.

Davis attended her first annual meeting at International Business Machines Corp. in 1959. Forty-three years later she again showed up at IBM's meeting this spring in Louisville during Derby Week. To outgoing IBM chairman Lou Gerstner, Davis asked: "Are some of the directors planning to stay in Louisville for the Derby?" (No comment.)

In 1991, she zinged chairman Stephen Wolf of struggling US Airways: "Are you going to stay or jump out and leave us holding the bag?"

She rapped Chrysler chairman Robert Eaton in 1998 after he endorsed the company's sale to Daimler-Benz AG of Germany: "You'll always have that on your conscience, Bob. Remember that," the Holocaust survivor said.

In Tampa, Davis aims for Tuesday's last word at the Morgan Chase meeting. How, she asks as if saving the best question for last, do I get back to the airport?

The audience laughs. Then Harrison quips: "We'll have one of our security people take you." The room breaks out in applause.

-- Robert Trigaux can be reached at trigaux@sptimes.com or (727) 893-8405.

Gadfly: a person who annoys others, esp. by rousing them from complacency.

-- Webster's Dictionary

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