CEOs of publicly traded companies may tell shareholders that they miss seeing them in person, but they are taking advantage of the virtual meeting format to duck those shareholders’ tough questions.
United Airlines recently avoided a question about its policy of not transporting lab animals on its planes, a very pertinent question for multiple reasons. But instead, executives limited themselves to mundane questions about the date of the last board meeting and how long the new chairman expects to serve.
In an annual investor meeting that lasted only half an hour – with a mere eight minutes for shareholder questions – United’s management team couldn’t find the time to address this question from the National Center for Public Policy Research’s Free Enterprise Project (FEP): “With our lives and the economy on the line, will United agree to transport lab animals – including primates – in the interest of finding a cure for COVID-19?”
The need to quickly find a COVID-19 vaccine should inspire United to allow the transportation of animals for medical research. During a White House briefing, Dr. Anthony Fauci discussed the promise found in animal models. Harvard Medical School researchers just announced very promising news on vaccine trials that involved rhesus monkeys. Researchers at Oxford University are using the same primates in their trials.
But United stopped transporting primates in 2013 after protests by the animal rights group People for the Ethical Treatment of Animals (PETA). Citing a concern for passenger safety, United joined almost every other commercial passenger carrier in refusing to fly animals used for research. PETA said they “wanted to shut off the supply line” to researchers, and they succeeded. It has forced researchers to rely on smaller carriers and the military to procure animals for testing.
The National Association for Biomedical Research charged that United and other airlines “illegally discriminate” against those wanting to transport research animals. United told the U.S. Department of Transportation that it has a right to refuse any cargo.
Is that so? United has received an estimated $5 billion in taxpayer bailouts through the CARES Act. A top priority of the U.S. government is finding a COVID-19 vaccine. United has repurposed some of its planes to deliver medical supplies, but it won’t help with lab animals that might be necessary for vaccine trials. So much for gratitude.
United executives could have answered FEP’s question by saying they would make a special exception during the crisis, or that they were putting people first over PETA’s radical agenda. Their silence leaves no answer other than their acquiescence to animal rights activists.
And, on a personal level, why didn’t outgoing United CEO Oscar Munoz – now the company’s executive chairman – choose to address the issue? In 2016, he received a heart transplant – a procedure derived from primate-involved research. In this era of virtue signaling, it would be wholly appropriate for him to share his “personal journey” while announcing a change in company policy. Instead, there was a silent veto of FEP’s question.
In a robust discussion at last year’s in-person United shareholder meeting, FEP engaged Munoz about the company’s involvement in anti-Second Amendment activism. Other shareholders raised a wide array of topics. What made that meeting productive was that executives had to face shareholders in an unscripted environment without foreknowledge of what they would be asked.
With virtual shareholder meetings, questions are submitted in advance. This gives the opportunity for staff to script answers or, as seems to be the case with United, ignore uncomfortable questions altogether.
United isn’t the only company that has done this. So far this year, FEP questions have also been ignored by BlackRock, Nordstrom, Macy’s, ViacomCBS, AT&T, Pepsi, Kraft-Heinz and PayPal. In only a few instances were the companies willing to engage after the meeting ended.
FEP has called in a complaint to the U.S. Securities and Exchange Commission (SEC), asking it to investigate these meetings to determine if they were properly conducted. If a company is found to have acted inappropriately, it may be forced to hold a new meeting.
By not answering pertinent questions when it had the time and opportunity, United showed how virtual shareholder meetings fail the needs of shareholders. While some CEOs say they hope to resume in-person meetings next year, the SEC should demand it.
David W. Almasi is the vice president of the National Center for Public Policy Research, a Washington, D.C.-based think tank.