Undecided Voters For SGM

[giofranchi]

How about just acknowledging that minority shareholders have rights and that we *won't* chuck Prem under the bus in just any capricious manner.  Like seriously, after all of these years, Prem's partners will cut him some slack, even if we think he's gone off the rails.  He doesn't need to increase the number of votes for the multiple voting shares, and this proposal borders on insulting. 

 

If you truly think Watsa has gone “off the rails”, then you should sell your shares. Because obviously nothing else will be beneficial to your financial health. But of course you already know this. ;)

 

Cheers,

 

Gio

 

[obtuse_investor]

I am the first one to admit that these recent action looks quite bad if taken out of context. However, I don't think Mr. Watsa has suddenly turned evil after 30yrs of a solid track record.

 

What worries me most as a long term investor is that this action stems from his fear about the stability of the internal culture. It must not be intrinsically healthy.

 

If he needs to increase the power of his MVS to preserve the culture, I am sure he realizes that this is just a temporary measure.

 

What tangible steps is he planning to take in the next decade to make the culture intrinsically self-sustaining, so that it can stand the test of time. Maybe he needs to learn and follow Mr. Buffett's example. Mr. Buffett claims that BRK culture would reject the wrong sort of person. It remains to be seen how that works. I would like to think that is exactly what Mr. Watsa seeks.

 

my 2 cents.

[giofranchi]

What tangible steps is he planning to take in the next decade to make the culture intrinsically self-sustaining, so that it can stand the test of time.

 

Well, but I am not looking for something which could “stand the test of time”… I am looking for something led by a great and still motivated entrepreneur, who is reliable and works both for himself and for all other shareholders, and who could go on doing what he does best for the next 10-15 years… UNDISTURBED.

That’s all I am interested in. ;)

 

Cheers,

 

Gio

 

[StubbleJumper]

How about just acknowledging that minority shareholders have rights and that we *won't* chuck Prem under the bus in just any capricious manner.  Like seriously, after all of these years, Prem's partners will cut him some slack, even if we think he's gone off the rails.  He doesn't need to increase the number of votes for the multiple voting shares, and this proposal borders on insulting. 

 

If you truly think Watsa has gone “off the rails”, then you should sell your shares. Because obviously nothing else will be beneficial to your financial health. But of course you already know this. ;)

 

Cheers,

 

Gio

 

 

Maybe I was a little unclear in my last post (it occasionally happens  :D).

 

The underlying premise for Prem's need to change the multiple voting shares is that he needs to retain control for the Watsa family.  The sub-text for this is that he is imagining some future situation where FFH management makes a decision or takes an action (or series of actions) which is perceived badly by non-Watsa shareholders.  This is the notion of Prem going off the rails.  He is explicitly worried that these minority shareholders will come together en masse through some sort of proxy fight to wrest control of the company from the Watsa family.  I have pointed out quite clearly in previous posts just how challenging it would be for any "rogue" shareholder to amass that kind of support (ie, if Prem's family controls 40% of the shares, that means a rogue shareholder would need to obtain 50/60=83.3% support amongst minority holders to win a proxy fight).

 

It is somewhat insulting that Prem would think that 83% of us would chuck him under the bus at the first sign that he goes off the rails at some point in the future.

 

SJ

[obtuse_investor]

What tangible steps is he planning to take in the next decade to make the culture intrinsically self-sustaining, so that it can stand the test of time.

 

Well, but I am not looking for something which could “stand the test of time”… I am looking for something led by a great and still motivated entrepreneur, who is reliable and works both for himself and for all other shareholders, and who could go on doing what he does best for the next 10-15 years… UNDISTURBED.

That’s all I am interested in. ;)

 

Cheers,

 

Gio

 

I think we are seeking the same thing (stable compounding)... they are just different approaches to achieve the same.

Frankly, I don't care how good long term compounding is accomplished.

 

My point remains though. Mr Watsa needs to figure out how to retain the right culture that he desires for long term success. He can do it in a handful of different ways.

 

[Guest glavacem]

I trust Mr. Watsa will act in the shareholders best interests.

[captkerosene]

<i>I trust Mr. Watsa will act in the shareholders best interests.</i>

 

This proposal is not in the shareholders best interests. I voted no.

[karthikpm]

http://www.wsj.com/articles/fairfax-canada-pension-plan-at-odds-over-ceo-voting-power-1437177062

 

Canadian pension plan is not too happy with this either.

Who is the largest institutional investor in fairfax?

[obtuse_investor]

Modifications to Multiple Voting share Proposal have been posted on SEDAR this morning. Nothing on the press release page (yet). Here is a section.

 

The modifications to the multiple voting share proposal consist of :

 

1.  An additional and accelerated shareholder ratification procedure,

whereby if Fairfax intend s to issue subordinate voting shares

representing more than 50% of its outstanding subordinate voting

shares and multiple voting shares in a transaction at any time, the

rights protecting the current 41.8% voting power of the multiple

voting shares from dil ution will remain in force only if the

continuing effect of the proposed amendments following such issuance

of shares has been approved in advance by a majority of the minority

shareholder vote .  Following a failed ratification vote in this

circumstance (or the failure to hold a vote as required), if Fairfax

proceeds with the transaction, the issuance, together with any other

issuances of subordinate voting shares after that date, will have the

effect of diluting the percentage of votes represented by the mu

ltiple voting shares.  If the ratification vote is approved, the

shares issued pursuant to the transaction will not be included when

calculating whether the 125% and 150% dilution thresholds have been

exceeded for the next regular ratification vote ; and

 

 

2.  An additional and accelerated shareholder ratification procedure

in the event, for any reason, Prem Watsa is neither Chairman nor Chief

Executive Officer of Fairfax, whereby the rights pr otecting the

current 41.8% voting power of the multiple voting shares from dilution

will remain in force only if the continuing effect of the proposed

amendments has been approved by a majority of the minority shareholder

vote within five years after such date.  If such a ratification vote

is not approved or Fairfax fails to hold such a vote within five

years, any issuances of subordinate voting shares after the failed

vote or the deadline for holding the vote, whichever is earlier, will

have the effect of diluting the percentage of votes represented by the

multiple voting shares.

 

Full news release and docs: http://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00002458

[StubbleJumper]

Just received the updated information package.  I wish I could vote no a second time, but unfortunately I can only vote no one time...

[ourkid8]

Agreed but unfortunately Prem most likely has the votes to push this BS proposal through.

 

Just received the updated information package.  I wish I could vote no a second time, but unfortunately I can only vote no one time...

[Partner24]

Just received the updated information package.  I wish I could vote no a second time, but unfortunately I can only vote no one time...

 

+1

 

Me too!

[Jurgis]

Voted "yes".

 

Can I have your shares? For free preferably?

[JEast]

As most on the board know, I have been a very-very long time shareholder.  Maybe even the longest tenured shareholder on the board.  With that said, this proposal is like changing the rules in the middle of the game.  For all the talk over the years of shareholder value and not diluting the existing stakeholders, there has been only a miniscule of shares bought in the last 15 years, but a bunch issued.

 

If I were Prem, maybe I would want to get back what I once had too. 

 

Nevertheless, a no vote was submitted and deemed in the best interest of all current and future shareholders.

 

[Guest Dazel]

 

 

I would imagine that Prem and Fairfax have discussed pulling the proposal. It is likely that they saw this as something that shareholders would want as it would solidify keeping Prem and the Watsa family involved in Fairfax long term. Clearly the market has perceived it as a power grab...even though that is not what Prem had in mind in my opinion. Mr. Buffet has never had a controlling position in Berkshire and Fairfax should follow his lead.

 

Dazel

 

[Alekbaylee]

Amended proposition passed

 

http://www.marketwatch.com/story/fairfax-announces-approval-of-amendments-to-multiple-voting-share-terms-2015-08-24-10173647