Ocean Spray Annual Meeting Convention

2/15/00 Beverage industry analyst George Dahlman, of Piper Jaffray, likens the proxy fight for several seats on the Ocean Spray board to a political nomination process, where candidates are nominated but the ultimate election is decided at a convention. This is an apt comparison. The question is whether or not this is  what the Ocean Spray "electorate" really wants.

In a national political campaign, candidates campaign in all states. In this particular proxy fight, the campaign just began in earnest when a letters from the opposing camps were mailed on Feb. 9th and Feb. 10th. There is currently major campaigning by supporters of each slate on the Ocean Spray ExtraNet's message board.

In the nomination elections, candidates campaigned in their regions. They met individually and in groups with "constituents" and fielded questions at Advisory Board candidates nights. With less than two weeks to go before the vote at the Annual Meeting on Feb. 23th, the candidates who are squaring off for now contested seats can hardly be expected to criss-cross the country meeting with shareholders. Candidates and their supporters from Massachusetts for two of the three contested seat are expected to be at a special Massachusetts Advisory Board meeting at 6:30PM tonight.

A unique aspect of the elections for the Ocean Spray board is that, in all but the case of one individual,  in the history of the cooperative, regional nominations went unchallenged. The shareholders who knew the candidates best elected members of the board.

There are those who suggest that the time for regional representation on the Board of a company as large as Ocean Spray is over; and that shareholders should simply elect the best of their number for the grower-owner seats on the board.

On the face of it, this is a cogent argument. But in point of fact, now more than ever there are regional differences, and to to assure that regions with fewer growers and lower yields are fairly represented in what is, after all, an agriculture cooperative, regional seats are necessary.  One of the strengths of the current system is that the shareholders who know the candidates the best are those who nominate, and ultimately elect them through what is essentially a confirmation vote at the annual meeting. Each region has respected the unofficial right of other regions to choose board members.

During the current proxy fight, shareholders across regions are making decisions as to whether to overturn the elections of nominees in Massachusetts and OR/WA based on rhetoric rather than personal knowledge of who these candidates are and what their positions have been in the past. A last minute campaign like this is fertile ground for making baseless or exaggerated statements about the opposition. It is unlikely the candidates for the contested seat will criss-cross the country meeting with growers. Instead, their out-of-region surrogates will be speaking for them. As Feb. 23rd approaches, it becomes more and more difficult for candidates to respond to charges made against them.

It is likely that the first two days of the Annual Meeting will truly look more like a political convention than the annual meeting of a large company. It will be the last chance for candidates to campaign for proxy votes. Is this what those promoting the alternate slate had in mind? Is this what the shareholders of Ocean Spray want next year?