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From the Editor 10: Meetings
THE PERMANENT PROXY
By Tom Soter
Years ago, Habitat conducted a survey of the “most pressing issues” faced by co-ops and condos. One of the answers went like this: “The most pressing issue in our co-op? Security: (1) Resident thief whose apartment is tenanted by a relative. (2) Deranged elderly tenant whose apartment is controlled by uncaring spouse. (3) Apathetic shareholders who don’t participate. The topic we would most like to read about? Board succession in light of the above.”
My flip reply at the time: “Our suggestion: put (1) and (2) in charge of the building and, before you know it, (3) will be no problem.”
I thought of this exchange when I presided over the annual shareholders’ meeting at my small Manhattan co-op. We were waiting to start the session, but the only ones who had arrived were a woman who didn’t live there but had bought a unit for her son (who had accompanied her); three of the five board members; and a man who was subletting an apartment and was there as proxy for the out-of-town owner.
On one level, the poor attendance was a sign that we were doing something right. Controversy – as my response to the survey participant indicated – is what creates crowds (“Want to get more bodies at the annual meeting?” goes the old management joke, “announce you’re redoing the lobby”). Years ago, when we first became a co-op, our managing agent rented a room for the annual meeting at a nearby school. Our lawyer and accountant came. We waited. And waited. And maybe three people came. We had to pay for the room and reschedule the meeting, but we learned our lesson. Like a good courtroom attorney who never asks a question unless he knows the answer, we realized we should never attend a meeting unless we had enough proxies to make a quorum.
From then on, proxy-collecting became a mania for us. When we announced the annual, we made it clear that everyone should get us a proxy, even if he or she intended on being there (many a slip between proxy and trip).
Sometimes, the proxy question was unclear. For instance, before this year’s meeting, the board received an e-mail from a shareholder saying, “I just want to make sure that the permanent proxy (for our unit) we submitted last year covers this year’s meeting. My wife is planning on coming to the meeting, but I can’t make it. Is it always the last Thursday of April? I would really like to go, but I work late on Thursdays. If I know far in advance I can schedule it in.”
I received this and didn’t know quite what to make of it. I had never heard of a “permanent proxy” for an annual meeting – it was my understanding that a proxy had to be for a specific event – nor had we ever had a fixed date every year for the gathering; it was usually sometime in the spring, but the last Thursday of April? What were we? The Supreme Court?
The treasurer called me about this, we exchanged a few remarks and had a quiet chuckle or two over the idea of a permanent proxy and a regular Thursday, and he then responded. End of story.
Well, not quite. The day before the meeting, I received an angry call from the wife of the Permanent Proxy Man. “I don’t understand why we can’t have a permanent proxy? asked Mrs. PPM.
“It’s just not very common,” I replied.
“Why didn’t someone tell us before now? It’s a great hardship for us to get you a proxy.”
“Are you not going to be home before the meeting?”
“I’ll be home tonight.”
“Well, I can hand-deliver a proxy to you.”
“I have a proxy.”
“What’s the problem then?” I asked, wondering how hard it could be to sign a piece of paper and feeling like I was in an Abbott and Costello routine that wasn’t quite working.
“I sometimes feel the board is going out of its way to make life difficult for us,” Mrs. PPM said, near tears. I apologized but was even more puzzled. She went on: “My father-in-law is not well, and it’s a great burden to get this to him out on Long Island.”
I saw a glimmer of light. “Does your father-in-law own the shares in the apartment?” He did – and thus the mystery of the permanent proxy was solved. It turned out that Mr. and Mrs. PPM incorrectly believed that only the shareholder could attend the meeting (every year until this one, the son or daughter-in-law had attended, always dutifully bringing a proxy signed by the father with them); it never occurred to them that they could attend as immediate family members.
She came to the meeting this year and was all smiles. So were we. We had a quorum – we had the requisite number of shares via proxy – and the meeting ran like Mussolini’s trains. I spoke, as did the treasurer, the mortgage refinancing committee chairman, and our accountant. There were two questions. The meeting was over in 30 minutes. “I’m very impressed,” said our new CPA. So was I.
The moral of the story? Controversy may create crowds, but competence and proxies make for smooth meetings.
Or something like that.