May 1, 2001 6:25 PM PDT
Analysts demand answers from Amazon
Gary Lutin, an adviser to the New York Society of Security Analysts, sent a letter to each member of the company's board of directors, asking them to address issues relating to their role in governing Amazon, the information the company presents to shareholders, and the company's corporate strategy.
The forum plans to follow up that letter with an official records request on behalf of shareholders later this week.
The company and its board have not responded to similar letters in the past, but the NYSSA is threatening to force them to respond under a Delaware law that requires corporations to divulge information to shareholders. Although it is headquartered in Seattle, Amazon is incorporated in Delaware.
"Shareholders have the right to demand information," Lutin said. "The whole system would collapse if the property owners couldn't ask the supervisors what's going on."
Amazon spokesman Bill Curry said the company just received Lutin's letter and has no response yet. Curry said the company already provides "voluminous" amounts of information to shareholders and investors.
"We provide a world of information that allows people to understand our business, but without providing so much that it empowers our competitors to hurt us," Curry said.
The letter comes after a meeting held last week by the forum, which Amazon participated in until earlier this year. During the meeting, forum participants came up with a series of questions to ask Amazon's board members before the company meeting.
Amazon's directors have nominated themselves for re-election at the company's annual meeting on May 23 in Seattle. Lutin's group plans to allow directors to respond to the forum's questions at a meeting in New York on May 10.
Among the questions posed of directors was their views on expanding the company's board, how they monitor the company's performance and its financial viability, and whether they plan to line up a successor to company founder and Chief Executive Jeff Bezos.
Lutin praised the company's recent earnings release, in which the company gave a more detailed accounting of its earnings than it had in previous quarters.
"Having observed Amazon's recent demonstration of the kind of leadership we had originally expected from them, we assume that they will also resume their constructive participation in the forum program," Lutin said.