Reeds, Inc. (REED): My 1st Attempt to Collaborate Through Sharegate

sharegateReedsI’ve started to use Sharegate.com to network with other shareowners around specific companies. The first company I’m working on through Sharegate is Reeds (REED). I think our company’s product line is strong but management and the board appear to be weak in distribution skills. After years of refining and growing their fine products, #REED still is not profitable.

Back in mid-July I asked if Reeds had a classified board or plurality requirements for director elections? Can shareowners call a special meeting or act by written consent? What supermajority requirements are in place re M&A or other actions? No response. Reeds is so small it is hard to get much information on from the usual sources, such as SharkRepellent.net or GMI, although both did have some useful information. I was able to find that two out of five of the directors at Reeds don’t hold any stock at all in our company. That’s not a good sign. If they don’t believe in our company enough to invest in it, why should we?

I’ve gone ahead, posting a possible shareowners resolution on proxy access that I will probably submit to Reeds for their next annual meeting. I’m running it by Sharegate.com participants to see if anyone has ideas on how to improve the proposal. One problem is that Sharegate is still refining their link-up to brokers, so we can’t really see the proportion of stock owned by those using the system.
I contacted investors on Sharegate such as Domini, Green Century, ICCR, Carlton College, and Florida SBA on Sharegate that may hold stock in Reeds. I also used LionShares.com to determine the top three shareowners and contacted them as well.

I hope those on Sharegate and readers of CorpGov.net will review the proposal and provide feedback. This proxy access proposal has a minimum threshold of 1% held for 1 year by at least 25 shareowners to elect up to 48% of the board. Since Reeds has 5 directors, if passed the draft proposal would allow up to 2 shareowners nominees on the proxy.

These thresholds are much less than the typical 3/3 proposal and 48% is a much higher percentage of the board. If utilized not only at Reeds but at other companies, this type of proxy access proposal should lead to a whole new game in terms of many more competitive seats. Competition will yield better, more dedicated directors. That should lead to more profits and more sustainable companies.

Please go to Sharegate.com, type “Reeds” into the search box for public companies, pull up “Proposal 4* – Proxy Access for Shareholders,” and provide comments in the “Reply to this thread” box at the bottom of the page or send them directly to me at jm@corpgov.net.

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