Real Shareholder Return
It is that time of the year when I receive physical hordes of annual reports and invites to the annual shareholder meetings of many companies. This year though, instead of selling kilograms of these reports to the paperwaala, I decided to attend one of them. It was not very difficult to choose which one to attend. I was always told that the Infosys annual shareholder meeting was full of grandeur and professionalism. I scantily glanced through the annual report, prepared two intelligent questions and headed out.
As you would expect with Infosys, the event was extremely professionally managed. The entire auditorium at Christ University in Bangalore was rented along with neat displays of directions through the campus not to forget provisions for adequate car parking and security. The auditorium, with a capacity of nearly 1500, was moderately full as the board of directors occupied the main stage. The theme of this year's AGM was Infosys clocking $ 10 billion in revenues.
What followed for the next hour was on expected lines. Some people listened intently, or pretended to, to the presentations by various big shots on the board. There was the usual song and dance on massive revenue increase, cleaner balance sheets, increasing margins, etc. In addition, a lot of attention was given to the transformation of the company and the social capital being generated because of the company. Given the infamous clashes between the founders and the existing board, it didn't come as a surprise that various speakers spent significant time allaying concerns that the founders' concerns were not being overlooked. The question and answer session had some tough questions on the Infosys stock being a non-performer over the last few years.
It was not surprising that some of the audience members would fall asleep in the cushy auditorium. There were some who refused to part with their complimentary Maaza tetra packs as it seemed more important than the Infosys share itself. However, it was interesting to note when the loudest cheer went up. It wasn't when Mr. Vishal Sikka revealed his vision for the company and the transformation journey he wanted to embark on. It wasn't when he spoke of robotic process automation or when the CFO revealed that dividend payouts would rocket the next year. The loudest cheer emanated when the caterers opened the food stalls in the canteen area. Nearly 800 shareholders, mostly with their backs to the large screen playing the board members' speech, were patiently waiting in the refreshment zone for the food stalls to start functioning. The refreshment zone had a capacity of about 500. In language shareholders understand, utilization was at a whopping 160%!
You couldn't blame them for the loudest cheer. The food being served was the best South Indian eclectic menu that could be carved out. Delicious butter dosas, vermicelli upma loaded with cashew nuts, freshly fried meduwada, ghee dripping mysorepak and the roundest idlis possible tempted most of the shareholders. For the rest, there were loads of street food; crispy jalebis along with panipuri. Authentic filter coffee seemed to anchor the entire culinary experience.
Once the counters were open, the scenes prevailing would put the crowd at Dadar station in Mumbai to shame. Vicious pushing, shoving, maneuvering dominated as people strived to fill their plates with multiple helpings. Common courtesy took a complete backseat as the refugee mentality took over. To give you a typical profile, a majority of this crowd must have worked in the Bay Area in the United States earning 7 figure salaries. In line with the company's focus on 'digital', even the caterers seemed to embrace that theme. Every serving container was loaded with a digital counter to highlight when they were running low on content. Going forward, I am quite sure that a robot would serve people and automatically replenish his container when the buttery dosas were running low. After an hour of vicious haggling and pushing around, sanity prevailed as people returned to their liberal technological mindset.
After an over fed, happy tummy; I didn't end up asking the two intelligent questions I had prepared for the meet.
We were always taught in business school that it was imperative to keep the shareholder happy by focusing on the total shareholder return (comprising of capital appreciation and dividend yield).However, every person has a different way to be happy. My grandmother used to tell me that the best way to make someone happy was through their tummy. Clearly, 'your company' knows something about it!
If you too are a culinary connoisseur; I would recommend you buy one share of every company that is famous for its food on their annual shareholder meet and attend it with a starving frame! And in case you don't believe me at all, buy 1 share of Infosys (market price of ~Rs. 950) and taste it for yourself!
