A PepsiCo Shareholder Meeting and a Very Unhappy Shareholder

Saturday, April 22, 2000

The New York Times

By Constance L. Hays

Practically no one bothers to go to annual meetings these days except company executives and retired shareholders. And that, it seems is pretty much the way corporate America likes it, considering that most companies have done away with perks like free food for those who do show up.

So it was all the more remarkable that Steve Hindi took the trouble to travel from his home near Chicago to suburban New York last May for PepsiCo's annual gathering. Far from getting the red-carpet treatment, though – or a free lunch, or even a free Pepsi – Mr. Hindi became enmeshed in a Kafkaesque adventure that puzzles him to this day.

Mr. Hindi, who owns about $5,000 worth of Pepsi stock, heads an animal-rights organization called Shark, short for Showing Animals Respect and Kindness. A onetime hunter and deep-sea fisherman, he became repelled, he said by both pastimes after attending a particularly gory pigeon shoot. Since then, he has devoted his spare time to defending animals against onslaughts of various kinds.

When Mr. Hindi, who by day is president of Allied Tubular Rivet, a maker of industrial fasteners in Geneva, Ill., discovered that PepsiCo advertised in bullfighting rings in Mexico and Spain, he was outraged. "I know there is a certain mystique in bullfighting, with the costumes and everything," he said. "But the nerve of the bullfighter is really more about having the nerve to walk in front of anybody after what he's done to the bull. These people are among the worst animal abusers on the planet."

He wrote to Pepsi, asking it to pull its ads, and started a Web site (www.PepsiBloodbath.com), on which he posted photographs and video clips showing blood-covered bulls beneath bright blue Pepsi banners. And he prepared a statement asking the company to cut its ties to bullfighting.

"I find any association with bullfighting to be in stark contrast to the public image and supposed ideals of Pepsi," the statement read in part.

He faxed a copy to Pepsi's shareholder-relations department and was told he could read it at last year's meeting. "I asked them, is there any problem with this? And they said, no, we're looking forward to seeing you."

A PepsiCo representative, Rosemary O'Brien, suggested he get to the meeting an hour before it was scheduled to start "so she could find seating, for my two companions and me," Mr. Hindi recalled.

But when he and two other Shark volunteers drove into PepsiCo's tree-lined, sculpture-studded campus in Purchase, N.Y., he said, they were greeted by security guards asking for identification and directed to a separate parking lot. There Mr. Hindi was told he would not be allowed into the meeting. When he asked why, "They said, 'Well, we received a bomb threat from Illinois.' "

Mr. Hindi insisted to the guard, and to a PepsiCo lawyer, Lawrence Dickie, who had been summoned to the parking lot, that his organization was not violent and that no one had made a bomb threat. "I've always said that's not how you get the issue resolved," he said of tactics like spattering paint on fur coats. "If we're right, that this is cruelty to animals, then that's what you have to bring to people, not all this extraneous nonsense."

The Pepsi officials apparently did not believe him. "They said, 'Well, we have an audio tape, and we've already contacted the F.B.I., the state and county police and local police,' " Mr. Hindi said.

He was kept out of the meeting, but the building was not evacuated, he noted, and no one else was stopped from going in.

"I told them, I understand why you are concerned about what I have to say," Mr. Hindi said. "But let's not be making bomb-threat claims. I offered to let them search me, but they didn't. So if I'm not the guy carrying the bomb, I must have some other method. But I am the only guy they kept out. Why weren't they worried about anyone else's safety?"

Richard M. Detwiler, a spokesman for PepsiCo, confirmed that Mr. Hindi was met in the parking lot and prevented from attending the May 5 meeting. But he insisted that no one had received a bomb threat, only a general threat, and said the company had a tape of the telephone call that he had listened to – although he would not make that tape available.

"Someone who identified himself as a terrorist and as an opponent of bullfighting called and made some kind of general threat of bodily harm," Mr. Detwiler said. "We brought this to the attention of the F.B.I. and New York State Police. We had some state police antiterrorist experts present at our meeting."

The meeting began as scheduled and ended without incident, Mr. Detwiler said. Mr. Hindi flew back to Chicago that afternoon, the bullfighting statement still tucked in his pocket.

Now shareholder-meeting season has rolled around again. Most large companies schedule their meetings between the beginning of March and the end of May, meaning the gadflies and proxy cards start appearing about the same time as crocuses and daffodils.

The ritual began as a legal requirement for a meeting at least once a year and has had its moments as a marketing ploy, with product giveaways, free lunches and the screening of coming television ads. But in the last few years, attendance has often waned, partly because companies – not wanting to spend too much time on voting, or to have executives subjected tirades from audience members – have tried to make meetings less attractive by offering few perks and holding them in some undesirable or hard-to-get-to place.

"It's been moving more and more in the direction of having your meeting in the basement of the Hotel Dupont," said Patrick McGurn, director of corporate programs in Institutional Shareholder Services, a Rockville, Md., company that tracks the trend. He was referring to a hotel in Wilmington, Del., where many companies are incorporated. "The trend is toward shorter and shorter meetings, and a lot of companies have dropped the goody bag and offered nothing but coffee, literally to discourage people from coming."

Even the companies that still try to pamper investors get a minimal turnout. A spokeswoman for CSX, which gives shareholders discounts on rooms at the deluxe Greenbrier resort in West Virginia and hold an elaborate lunch for them as part of the annual meeting, said only about 4 percent of shareholders attended.

And when stockholders do show up, Mr. Hindi's story suggests, companies want nothing to rock the boat. No charges were ever riled against him or anyone from his organization. But a few weeks after the meeting, he asked various local police agencies, as well as the New York State Police and the Illinois State Police whether anyone had reported a bomb threat at Pepsi around the time he was there. He also called the F.B.I. and made a request under Freedom of Information Act.

"My belief was that no one had made the call," he said. "It was all just way too coincidental."

The local and state police agencies all told him in writing that they had no record of such a call. But a few weeks ago, 10 months after the meeting, he received a report from the F.B.I. that centered around a call made on April 29.

"The caller claimed to be a terrorist and that he wanted to stop the blood bath even if it may hurt many people," the report said. "The concern is for an upcoming stockholders' meeting this week in Purchase, N.Y."

F.B.I. agents in Chicago said they tracked down the telephone number from which the call is said to have come, but the report indicates that the person who owned the telephone had nothing to do with any call. On Oct. 6, the agent assigned to the matter wrote, "Due to the lack of positive leads regarding this matter, New York requests that this case be closed."

Mr. Hindi also got a letter from Ms. O'Brien at PepsiCo after he wrote to the chairman, Roger Enrico, to complain about his treatment,. "The difficulty arose when, shortly before the meeting, and Illinois caller threatened that people were going to get hurt unless we acted as demanded regarding bullfighting," Ms. O'Brien wrote. "It was determined that the situation constituted a genuine threat to the safety of the more than 500 attendees at the meeting."

In the end, Mr. Hindi may have lost the battle but won the war. In recent weeks, PepsiCo has withdrawn its bullfighting ads in Mexico, Mr. Detwiler said, and Mr. Hindi has posted a notice to that effect on this Web site. Mr. Detwiler said, "Mr. Hindi's was among a number of consumer voices we heard on this issue. We do not support bullfighting."

Mr. Hindi also organized a letter-writing campaign, which included protests from a senior official in the Indian government, a culture that preaches compassion for animals and a particular reverence for cattle.

Mr. Hindi is now focusing his efforts on the maker of Corona beer, Grupo Modelo, which also has ads in bullfighting rings. Anheuser Busch is the major shareholder in Grupo Modelo. But Mr. Hindi is still wondering about the incident last May, and is convinced that there was never any threat made by anyone. "It is amazing to me," he said, "that a company the size and the stature of Pepsi would stoop to that level."

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