Wednesday, September 29, 2010

Chevron Shareholder Activist Faces Jail

Antonia Juhasz
We don't usually follow this type of shareholder activism, but the fact that this person is facing jail time for disrupting Chevron's annual meeting during the Q&A session is fascinating.

If you're interested, you can check out Juhasz's book The Tyranny of Oil

Here's the story from MarketWatch
By John Letzing, MarketWatch

As the nation’s second-largest oil company, Chevron Corp. is accustomed to a cavalcade of activists at its annual shareholder meetings.

But Chevron is working with authorities who are prosecuting a particular shareholder activist, who harangued executives at the annual meeting in Houston last May. Antonia Juhasz was removed from the meeting and then arrested outside, after blasting Chevron’s environmental record and starting a derisive chant, according to people at the meeting. The meeting wrapped shortly afterward.

Juhasz has been charged with criminal trespass and disrupting a meeting or procession, and now faces up to six months in jail. She said the charges are an overreaction and doesn’t accept them. Her attorney said they will fight them.

Juhasz’s prosecution may result in an odd instance of a shareholder activist being not just removed, but also arrested and prosecuted for trespass and disruption. It raises questions about the best way for firms to deal with activists who use small amounts of stock to get into annual meetings to make a public statement.

“This is very, very unusual,” says Sanjai Bhagat, a professor at the University of Colorado at Boulder’s Leeds School of Business, when asked if he heard of shareholder activists being faced with jail time for actions at corporate events.

Chevron spokesman Morgan Crinklaw said in a statement that the company is “cooperating fully with the [Harris County, Texas] district attorney’s office as they move forward in their prosecution.”

Juhasz, who runs the energy program at San Francisco-based advocacy group Global Exchange, deferred questions about the shareholder meeting to her attorney, John Parras. Parras said he will argue that Juhasz did not disrupt the meeting, which could have continued after her turn at the microphone during a question-and-answer period. “The larger question is, can shareholders within a corporation use the process to make the corporation better or more responsive to their concerns,” he added.

The incident has led to the hobbling of one of the company’s most vocal critics. Juhasz said she now must limit what she says publicly about the company for fear of hindering her defense.

Chevron’s Crinklaw deferred some questions about the Juhasz case to the district attorney’s office of Harris County, Texas. George Flynn, a spokesman for the office, said the authority to dismiss criminal cases belongs solely to the district attorney’s office, though it “certainly takes the sentiments of the complainants into consideration in making any decision to proceed to trial.” A preliminary court date has been scheduled for Thursday.