Financial History Issue 119 (Fall 2016) | Page 23

QUEEN OF THE CorporateGadflies THE UNSTOPPABLE WILMA SOSS By Janice Traflet A cleaning woman, with mop and pail in tow. A well-dressed Victorian lady, wearing a purple velvet hat, a fancy lace blouse and an expensive mink. A safari guide, sporting khaki long shorts and a helmet. All of these — and more — were costumes donned by the colorful Wilma Porter Soss as she vividly made her points at various stockholder meetings across the United States. For more than 40 years, beginning in the late 1940s, the legendary shareholder activist energetically and passionately pressed management for a wide range of reforms, such as appointing more women to corporate boards, moving stockholder meetings to more accessible locations, curbing executive compensation packages and increasing the transparency of financial statements. “Corporate gadfly” was the term often applied to Soss. Like a pesky fly, she irritated management as she publicly questioned their practices, and many chief executives probably wished they could swat her away. Soss, however, proved to be remarkably persistent, and she helped highlight the potential power of owning even one share in a public corporation. While one share equals only one vote (and hence larger shareholders carry more weight with their votes), one share nevertheless entitles the bearer to certain privileges, like attending and speaking at stockholders meetings. Soss strategically accumulated small numbers of shares in multiple companies in order to be able to attend their annual meetings and proffer shareholder resolutions there. Having built a lucrative career in public relations prior to embarking on Wilma Soss speaks at a US Steel shareholders meeting, May 1, 1955. her crusade as a shareholder activist, Soss well understood the power of publicity, and she worked hard to harness it. In the early postwar period, Soss both reflected and helped disseminate the shareholder ideology rhetoric then being promoted by the financial community in the United States — discourse that extolled the power and the responsibilities of the individual investor, no matter how small. As the Cold War began to take shape, stock exchanges, listed corporations and member firms stressed the importance of American citizens from all walks of life buying stocks and becoming more actively involved in the free enterprise system. Equity advocates constantly noted that investors in a corporation actually together owned that business, which entitled them to share in any profits that accrued. Moreover, as the financial community liked to say, people buying stock were not just purchasing a piece of an American corporation (as critical as that was); they were also buying “a share in America,” which would serve as a defense against communism, as more people would have a stake in the system. An army of small investors, the lifeblood of capitalism, purportedly would enrich not just the shareholders themselves, but also the American way of life. In her writings and interviews, Soss expressed many of these same thoughts. In March 1951, for example, Soss told The New Yorker, “The truth is, we shareholders own the corporations. All those Prussian-faced directors are just our employees — laboring people, you might say…” A fierce proponent of “shareholder democracy,” Soss perceived herself as the voice of overlooked shareholders, particularly women shareholders. And she saw her work as helping preserve American capitalism. Soss did not become involved in the fight for shareholder rights until she was in her mid-40s, when she began attending corporations’ annual meetings and started realizing their deficiencies. Soon, she was actively participating and challenging management. Soss’s first clash with a board was at the annual meeting of US Steel in May of 1947, when she leapt to her feet and made an impassioned speech. She demanded that women be represented on US Steel’s board, arguing that women held more than half of the company’s stock, and therefore were entitled to have their point of view represented, and by one of their own gender. Recalling that meeting four years later, Soss told The New Yorker, “No one could have been more surprised than I was when I got to my feet that morning and said what I did.” She added, “I didn’t choose to be the head of the woman’s economic-suffrage movement; I was just sitting quietly in my seat, brooding over my one share of stock, when the woman’s economicsuffrage movement chose me.” At that same meeting, Soss announced to the “gentlemen on this board” that “… there is being born in this room today the Federation of Women Shareholders in American Business. And they will call upon the steel industry and ask for representation in the business they own.” True to her word, Soss quickly organized a nonprofit corporation, which was chartered in the fall of 1947 with the endorsement of Justice Ferdinand Pecora, who had presided over the acrimonious investigation of Wall Street after the Crash of 1929. In 1949, at another US Steel meeting in Hoboken, New Jersey, Soss offered the first of the Federation’s many proposed shareholder resolutions: to move US Steel’s annual meeting from Hoboken (where the company had been incorporated) to New York City (which was more convenient for a greater number of shareholders). As would become her modus operandi, Soss dressed in costume to make her point.  |  Fall 2016  |  FINANCIAL HISTORY  21