Money Rehab with Nicole Lapin - Demystifying Shareholder Activism and Why Some Investors Are Mad at Elon

Episode Date: April 3, 2025

If you’ve got a 401(k) or invest using Nicole’s Index Funds and Chill approach, chances are you’re a shareholder in major companies like Berkshire Hathaway or Tesla—and that means you have power. You can vote on who runs these companies, how they operate, and where your money goes. But most of us don’t use that power, and while we sit it out, others are stepping in—often to push agendas, not better business. Today, Nicole is joined by Nell Minow—an expert in corporate governance—to break down what shareholder activism should be, what it’s becoming, and why your retirement account might be more influential than you think. Oh, and she’s also got some thoughts on Tesla and Elon Musk… you won't want to miss it. Here are resources from Nell on proxy voting: https://www.iconikapp.com/as-you-sow https://theshareholdercommons.com/potb/

I'm Nicole Lapin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. If you've got a 401k or if you're investing using my index funds and chill approach, you're probably a shareholder in some of the biggest companies in the world. Companies like Berkshire Hathaway or Tesla, or maybe you're even invested into them directly. And that means you have the power over how these companies make decisions. Yes, you can vote on what these companies do, who runs them, and how they spend your money. Even if you're a fund investor, there's a growing trend toward pass-through or proxy voting.

But here's the thing, most of us do not use that power. And while we're sitting it out, someone else is stepping in. And they're using shareholder activism not to boost company performance, but to push political agendas. Right now, Berkshire Hathaway, Warren Buffett's company, one of the biggest and most stable in the world, is being targeted by what some experts are calling extremist proposals from far-right activist groups. If they succeed, it could completely change what corporate America is for. Are companies supposed to make money or take sides in a culture war? Today I'm joined by Neil Minow, one of the leading voices on corporate governance and someone who's been inside these battles for decades now. She'll tell us what shareholder activism should be, what it's becoming, and why your

retirement account is more powerful than you think. Plus, Nell is a Tesla investor and has been very vocal about her thoughts on Elon. We'll get to that too. We have a lot to cover, so let's get started. Nell Minow, welcome to Money Rehab. Thank you. I'm very happy to be here. Very happy to have you here during shareholder activism season.

I don't know if that's a season, but it feels that way. It is a season. Usually it's in the spring, so we're just starting it, but now is when the companies have their annual meetings. And more and more of those companies are doing them virtually. So you don't have to travel just about anybody can attend a shareholder meeting. And that means you can ask a question and you can hear what other shareholders are saying. Yeah, I mean, you don't have to be a big shareholder even to ask a question or to be part of, you know, a company meeting. You can have one chair and have a voice, have a vote.

That is true. I did hear from an executive at Microsoft that people were getting up at the annual meeting and asking IT questions. That's not appropriate. You want to ask questions about things that the shareholders should. Can you imagine, be like, Mr. Gates,

my Microsoft word is active app. Can you just put this into context historically? What is shareholder activism and what are the common forms that you have seen and are seeing now? Well, of course, one of the great things about a share of stock is that it is about as liquid as it can be. You can sell it anytime you want. If you're not happy with what the company is doing, but you do have another

alternative, you could push them to do better. And for example, if you are unhappy that a lot of companies have dropped their DEI policies, have stopped disclosing certain things, you don't have to sell your stock, what if you still like the company, but you just think that that's a risk for you as an investor, you can write them a letter, you can go to the annual meeting and vote against the board of directors. You can file a shareholder proposal if you have more than $2,000 worth of the stock and have your proposal voted on by all the other shareholders. And then if you really want to up your game, you can join in a lawsuit or even run for the board yourself. Wait, $2,000 or 2,000 shares? $2,000. Oh, for any company? Yeah. So how does that work if you're pissed about something like legit, not, you know, an IT type of

issue? You mentioned a DEI policy or climate policy. You know, these are some of the buzzy things right now or pay packages and we'll get into Tesla. Of course. What do you do if you're pissed about something and you own 2000 bucks? Well, you have to do a few months ahead of time. Their last proxy will tell you what the deadline is for filing a new shareholder proposal. And there are a lot of restrictions.

And when Trump is in office, there are more restrictions. So he puts them in, Biden took them out, Trump has now put them back. And so your subject matter is limited. It's not just not asking IT questions. It has to be obviously something that the company can address. It has to be not personal to you.

It has to be a general subject. And there are other kinds of restrictions. You also only have 500 words, whereas the company has all the words that they want to respond to you. It has to be a general subject and there are other kinds of restrictions. You also only have 500 words, whereas the company has all the words that they want to respond to you. But if you follow those rules and your best bet, particularly if you're new at this, is to find a proposal that's already passed muster and just submit that even if it's not your number one priority as to get your foot in the door because then they'll call you and you can talk to the company about what some of your issues are. It's a good way to get their attention because they would love to negotiate with you. They would rather not have everybody vote on it. So to summarize, basically, shareholder

activism is a fancy way of describing influencing a company you're invested in. And maybe somebody saw like the Carl Icahn documentary that was out there. He's one of the famous activists, investors. That's right. They used to call them raiders in the 80s. When Carl Icahn first got started, because they don't always do things that are beneficial to all shareholders. They very often take a piece of the cake and they don't leave anything for anybody else. But many shareholder activists do act on behalf of all the shareholders. And it's good to sort of get acquainted with them and know what's happening. Now, the big household name companies get a lot of shareholder proposals.

I think Amazon hit something like 11 this year. Most companies don't get any. But that doesn't mean that you can't still go to the annual meeting virtually and ask a question. Or vote. Yeah, I always say the board of directors, sure. And you better vote. question or vote. If there's yeah, I always say the board directors. Sure. And you better vote. You should vote. I always say boards of directors are like subatomic particles. They be of differently when they're observed.

So the more they know that you're paying attention, the more they will pay attention to you. And, you know, you have to remember that even if you don't own individual shares of stock, even if you're not a stock picker, even if you have a 401k, what I recommend to people generally that is invested in a index fund or a mutual fund, which is great. That's what I recommend that people do if they don't want to devote a lot of time and attention to picking stocks. But what that means is that if you're with Fidelity or you're with Vanguard or you're with a fund like CalPERS, get in touch with them.

Ask them how do they vote their proxies? Are they voting against these ridiculous pay plans? You can find that out very easily. And again, the more people ask that question, the better they will be. The more that they think that you care about it, the better they will be. Well, so you mentioned pay plans

and I'm assuming you're alluding to Elon's pay package as one of the things that has been up in the news lately. That's maybe how some people think about shareholder activism, because if anyone listening has Tesla shares, they might remember last year we had the opportunity to vote on Elon's pay package. So shareholder voting is, of course, one way that you can play a role in a direction of a company. I would love to double click, maybe triple click on Tesla for a second, but I want to really

caution that shareholder activism sounds like a euphemism. Like who doesn't want to be an activist, right? But like the finance world is so full of this type of stuff, like overdraft protection is not always protection, for instance, right? So it sounds like a good thing or a great thing, but it isn't always. You mentioned, you know, the icons of the world being called raiders,

like a hostile takeover as a form of shareholder activism too. And Berkshire is right now being targeted by three extremist right-wing shareholder proposals. Can you explain what's going on here? Cause I think everybody just loves talking about Warren. I love talking about him. I love him. And I'm very happy to be a Berkshire shareholder.

So yes, I just voted against those proposals. And what's so insidious about it is that the extreme right-wing proponents who are all financed by the they're all sock puppets for the same, the Skafe Foundation, the Mellon Foundation, the Koch brothers, the very, very extreme right-wing people who are very involved in a lot of political stuff. If you look at them very quickly, and most people don't want to spend a lot of time voting on proxies, they almost look good. They'll say, you know, proposal on diversity. Well, great, we like diversity,

but it turns out that it's diversity in their view, it's diversity, it's prejudice against white males if you are paying attention to anybody else, if you're just trying to make your employees feel comfortable. And they say a lot of things that aren't true. They imply that DEI programs are about quotas, which they are not. They're just about expanding the applicant pool.

And so yeah, you do have to be very careful about it. It used to be the Sherhold proposals were generally pretty good, but I'm happy to say that Sherhold has been doing a great job on this. And a proposal like that at Disney got less than 1% of the vote. And if you don't get, I think it's 5% of the vote, you can't even resubmit it next year. So people are being very savvy about those extremist proposals. So basically those three shareholder proposals are to take over the company. They are directing the company.

First of all, the most important thing to know about shareholder proposals is even if you get 100% of the vote, the company can still walk away from it. They don't have to do anything. They're only advisory or to use the legal term, precatory. They only say, please think about doing this. That's all they do. And so that's one reason it makes me furious when corporate executives talk about activism in bad terms and say, oh, these people are trying to run the company. They're not trying to run the company. They can't. There's no impact on these proposals. But what they're saying is, please prepare a report. Very often, Cheryl, the proposals will ask for a report. Prepare a report on how you're being prejudiced against white Christian people, something like that.

So they really don't have as much bite as they have mark, but you know, like the icons of the world could buy a bunch more. It's a foot in the door because they don't like to have the proposals on the proxy and they will call you or most of them will call you and say, what can we do to get you to withdraw your proposal? At least you can start the conversation that way. So we used to do proposals on things like that actually companies really improved on, you know, that you shouldn't serve on more than four or five boards.

A lot of times there were people serving on 10 boards. You just don't have time in your life to do a good job on 10 boards, on conflicts of interest of directors, things like that. And companies have made tremendous improvement. Boards of directors are vastly better now than they were. And then I first got started in this field, believe it or not. When I first got started in the 80s, O.J. Simpson was on five boards and he was on an audit committee. I had no idea.

Seriously? Which boards? Do you remember? Yeah, Infinity Broadcasting. And there was a two-person audit committee. The other person didn't know anything more about accounting than OJ. He just wasn't famous. He didn't have a Heisman Trophy.

But yeah, so there were a lot of people on boards who had no business being on them and did, you know, contributed nothing. So boards of directors are generally doing a much better job than they did. And that's because of shareholder activism, because shareholders asked for better performance from the board of directors whose job is really to protect our interests. And there have also been a number of times recently where shareholders have rejected some of the activists. The guy that went against Disney,

the shareholders said, no, we're not interested when he ran his own candidates for the board. So I think shareholders are also, when I, the shoulders I work with are the large institutional shareholders, so the pension funds, the index funds, the mutual funds. And they've gotten a lot more sophisticated about voting proxies too.

And what's the percentage of the time that they actually listen? They listen all the time. They don't always do. In the most outrageous cases, there have been companies where fewer than 50% voted for director candidates and they put them on anyway, which I think is just an outrage Or where the shareholders voted no on the pay package and they went ahead with it anyway

but but generally speaking I would say that they Do take it seriously when shareholders are unhappy. I I will tell you I had a conversation once with a director who I will tell you, I had a conversation once with a director who was explaining to me that the shareholders voted in favor of a particular shareholder proposal and this company was really underperforming. And he said to the shareholders, he says, you don't understand, those are fringe shareholders. And I said, they got 60% of the vote. You're the fringe.

Ooh, okay, now you tell them who has more power in your opinion, the shareholders of the board. No question. It's the board. They're the ones that are there and they're the ones that are that do have the legal power and responsibility. But remember that directors, although Delaware is trying to weaken the obligations of directors, But generally speaking, directors have two duties. They have a duty of care, meaning they have to come to meetings, they have to pay attention, they have to do their homework,

and a duty of loyalty, meaning that they have to remember that their priority is the shareholders, not management. And if they don't do those two things, they get sued. I'm sure that's happened. It's never fun to get sued, even if you have all the money in the world to defend yourself. It's never fun to get sued, even if you have all the money in the world to defend yourself.

It's never fun. Depositions are brutal. Hard pass. Yeah. So there's a lot of pressure that you can put on a company, but they don't have to do anything you say. Even if you own more than $2,000, if you own hundreds of millions of dollars

or billions of dollars of a stock. Absolutely. They will ignore you. A lot of large investors in Tesla have raised their hands and said, hey, we need you to do a better job, Elon Musk, than putting your brother the chef on the board. I mean, come on. All right. Let's go. Should we put a pin in Warren and Berkshire and just go over to Elon now? Oh, sure. There's so much to talk about. a pin in Warren and Berkshire and just go over to you on now. Oh, sure. All right. All right.

The talk about so much with Tesla. Hold on to your wallets. Money rehab will be right back. So I just went to the grocery store and I actually flinched at the cost of eggs. And I don't even really eat eggs. That's how bad it is. Everything feels more expensive. And so I'm even really eat eggs. That's how bad it is. Everything feels more expensive.

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but you have feelings about the company, the board in particular. So the brother is, is some of your beef, the brother being on the board. What else? Why did you originally invest? And you know, the stock is down tremendously this month, this year, since Elon went into Doge. How does all of this make you feel? This is going to sound almost quaint at this point. I invested originally quite a long time ago because I was excited by the idea of electric cars. And that's it. And so I invested and did quite well. And then last year, just out just this time last year, right after proxy season, I voted no on the pay plan. So I held the stock long enough to do that. And then I donated almost all of my stock to charity. It had a tremendous capital gain.

I didn't really want to have to pay taxes on it. I didn't want to hold it anymore. This is the part that's going to sound quaint. Why did I decide to get rid of the stock? Because Elon was involved in too many other things. I didn't think he was doing a good job as the CEO. As you know, he's got a lot of side hustles. He's got the rocket ship. He's got the brain thing. He's got all of the stuff he was doing a good job as the CEO. As you know, he's got a lot of side hustles. He's got the rocket ship, he's got the brain thing,

he's got all of that stuff he was working on. I didn't think he was going to be able to devote the time and attention to Tesla that was needed. And I was outraged that he wanted to pay himself $56 billion just to do his job. Well, so now he has another side gig. Well, I know that's why it sounds kind of quaint that I was worried about, you know, the rocket ship, but here he is devoting it's not just the rocket ship,

right? Like SpaceX, I thought so. Neuralink. Yeah. Yeah. Neuralink. All of that, all of those other things that he was doing, artificial intelligence, everything. And he just seemed very unstable to me as he still does. And so, okay, now he's got a side gig that is definitely a full time job. And he brags about how much time he's spending on it. And the company, the board of directors has completely failed. Normally, you would have to file an 8K and say, our new acting

CEO is so and so they won't even tell us who's running the store there. And we- Like, what can you really compel, what can shareholders compel Elon to do? Nothing, because he owns such a significant block of the stock and he controls the board. The chair of the board testified under oath, as I think we would agree was correct, that the $600 million she's been paid for being on that board has been a life-changing event. I think we would agree that that's always gonna be

a life-changing event to get paid that much. But Upton Sinclair said it's impossible to make a man understand something if he's making a lot of money not understanding it. And that's the case with that board. They're absolutely useless. And that was why I didn't have any confidence in the company anymore.

So basically, you're quoting Mr. Sinclair and saying that she, Robin Denholm, the chair of Tesla's board, $682 million in cash and stock is her pay package. She's paid way too much. Elon owns 13% of Tesla, which is a big portion, you know, at that point in the game. So you definitely think she you're basically saying she has conflict of interest. She's paid way too much. So who has? Yeah,

yeah, I'm saying that about the whole board. They're serial killers of shareholder value. And the problem is, on top of everything else that we've talked about, is that Elon Musk took the high risk, high reward decision that he was gonna make himself the brand. And we've seen CEOs do that before. Steve Jobs did that very effectively at Apple with his iconic black turtleneck

and everybody just believed in him as being such a whiz kid, and Walt Disney, still the brand of Disney. But you have the upside, the downside of that is when somebody like Mike Lindell decides to get very involved in politics and now is saying publicly that his only remaining assets are his car and his house People you know markets are wonderful markets are efficient and the market responded to his behavior

Mike Lindell's behavior in a very powerful way and I feel that that's also happening with Tesla I mean I am I know everybody has seen, but I just this week was driving behind a Tesla that had a bumper sticker that said, I bought this before Ilan went crazy. Oh yeah. There's a ton of those. I took a picture of it. Yeah. So Mike Lindell just for our listeners, that's the MyPillow guy.

Yeah. Mike Lindell was doing great with MyPillow and now Fox won't let him advertise anymore because he hasn't paid his bills. So it's because he he decided that he was going to go all in for Donald Trump and for challenging the election results in 2020. And consumers didn't like that. OK, but what I'm assuming you voted against, Elon's pay package, or did you sell your stock? No, I kept it. I've specifically kept it long enough to vote against it. I'm assuming gladly against. Yeah. And I, Elon's pay package Robbins. Yeah.

I gave a lot of interviews saying that he should, that it was an outrage. It's no human being is worth that. And he's already made all the money in the world the way he should have from his investment. And if very often the board will say, this is retention, this is all about retention. Well, maybe we don't want to retain him. And he should be sufficiently motivated by the investment he already has in the company. He should not be siphoning off the shareholder money to pay himself even more just because he took a beating on Twitter. But what would you say to the devil's advocate point of view that he earned

that pay package because he had all these milestones that he priorly that he outlined prior and that once he hit those milestones, then shareholders would obviously get more. So if I said to you, hey, now I'm going to create a million dollars of value for this one episode. And if I do that, then I'm going to give you a percentage of it. But if I don't do that, then we get nothing. Right.

And that is the way pay should be structured yes Nicole I agree to that pay plan for you but he was getting paid for what he had no he got paid plenty for achieving those goals he's the richest man in the world he got paid plenty but there's diminishing marginal utility of that additional dollar and and he was, as I said, he wasn't there. He was off doing other things. He was tweeting all day long. And so no, you don't pay him that he's already should be already incentivized by the amount of stock he has. If he creates value for shareholders, then he will create it for himself. But this is it. But he created these big pie in the sky milestones, right? And he's like, just in the off chance that I hit this number, then we'll all get paid. And then nobody thought he would, and then he did.

Yeah, and he got paid more than enough for that. This is how you have to look at it. Every single dollar that goes to a CEO should be looked at in the same way as any other expenditure made by the board of directors. And that's one metric, return on investment. And the return on investment for these outrageous pay plans that these CEOs are getting is less than a piggy bank. We look for the return on investment from the money that they spend on R&D, for

the money they spend on marketing, for the money they spend on their employees. You have to look at it in a very green eye shade, sharpen your pencil away. But the problem is we're paying CEOs outrageous amounts. The market was tremendously strong during the 50s and 60s when the CEO pay package was something like 13 times the average employee. Now it's hundreds of times, even thousands of times the average employee. And by the way, that's one of the other achievements that shareholders have can mark up to activism. Now it's in the law that the companies have to tell you on the proxy what the ratio is between the CEO pay and the average employee. And that's a really good metric to look at.

So what do you think Elon should have gone made? You know, I think something in the tens of millions, maybe 100 million for achieving a great goal. But it's also very important that you have a downside as well as an upside to CEO pay. And very often that doesn't happen. I talked to a compensation committee chair once who said, well, you know, he didn't meet the milestones and he made some very hard decisions. So we had to give him the bonus anyway. And I said, okay, if he made hard decisions that are going to pay off in the long run, then we pay him in the long run. I know you're going to pay him that, so don't pay him for that now.

Elon Musk, no one deserves a pay package of $58 billion. If you are Bill Gates or Elon Musk and you create something that makes a lot of money or Mark Zuckerberg and you create something that makes a lot of money and you make money that way, that's fine. But we're talking about his pay, his salary, and he did not deserve that. Well, I mean, 13% of Tesla and by the way, he's not the founder of Tesla, people think he is. Just as a reminder, I know you know this.

I know that. He's not the founder, but he did bring the company forward. He totally did. And 13% appreciation in that 13% of the company would be many, many billions of dollars anyway, which is I think what you're saying. He doesn't need like a comp structure if he's incentivized as an equity holder. He calls himself the product architect of Tesla and equity holder. He calls himself the product architect of Tesla and the CEO. He was the founder, I should mention, of that little space company of SpaceX. SpaceX, right. Yeah. Good for them. They've got the astronauts home. But yeah, he should

... So tell us how you really feel now. Well, I'm very fortunate to have a job where I get to express very strong feelings all the time. I love that. I love that press. Okay. So let's talk about where Tesla might be going.

You're not a shareholder anymore. I kept 20 shares. Just 20. Just 20 because I wanted to continue to get the shareholder communications and I can promise you there's going to be a shareholder lawsuit over what's happening now at the company and I will be happy to be part of that lawsuit. Okay, so they got the current price per share, you're a few thousand bucks. Yeah.

Okay, so where do you think the company is going? Cathie Wood, for those who don't realize who Cathy Wood is, major investor, she's so confident in Tesla right now. We did stories about her saying that it's going to hit $2,000 a share. Do you think that's in the realm of possibility? I think it's a long shot. And I would think that they would have to make some very major changes to the management. They'd have to bring in a really good person who will actually be in the office and be running things there. Then I think it could, but it's interesting.

He's the company kind of sailing into some headwinds right now because the administration is doing a lot to promote oil and gas guzzling cars rather than electric cars. So I'm not sure if it does, maybe someday, maybe it'll hit that. And I hope it does, but I don't think it will do it with Elon Musk in his current situation. LESLIE KENDRICK Can companies block shareholder activists from buying shares? KATE BAKER From buying shares? No. Just like the grocery store can't block you from buying bananas. Nope. We had heard that, you know, there could be people at companies that are monitoring activists buying.

Could they be monitoring it, filing any, you know, complaints with the SEC or otherwise to try and scoot them out? Well, there are very, very strict rules at the SEC that if, say, I wanted to be an activist, and I have been an activist in the past, if I bought a certain amount of stock with the intention of affecting the company in any way, that's a very low bar to reach, I would have to file a public statement with the SEC saying exactly what I intended to do. And so they don't need to scope anything out. It's already out there. And can a company can't force a shareholder to sell their shares? Well, I'm glad you asked that because something one of the reasons that shareholder activism all of a sudden happened in the 1980s is that

companies were paying what was called green mail to activists to get them to go away. They paid, General Motors paid Ross Perot a ton of money to stop bugging them. And that's not good for shareholders. And that's why all of a sudden, shareholders who had been very passive up until that point, and had pretty much adopted what was called the Wall Street rule, vote with management or sell the shares said, wait a minute, all of a sudden, both raiders and entrenched insiders are abusing our rights, we better wake up and do something about it. And that's why the Council of Institutional Investors, which is the trade association, celebrated their 40th anniversary last week.

That's exactly what started it was the payment to Ross Perot of Green Mill. And you're saying that that money obviously should be used for more important things at the company. Yeah, Ross Perot was raising some very legitimate questions with General Motors, which was a terrible investment at the time. And, and the company said, we'd rather pay you to go away so we can continue on exactly the path that we're on. And, you know, they were getting their butts kicked by Japan and by their competition. So in the United States, so, so yeah. But he didn't take it. He didn't need it. Who? Ross Perot? Yeah. Of course. Oh, go. Yeah. How do you think he got so rich? And oh, I didn't, I didn't know

that part of the story. This was the beginning of like the where he found his fortune. He was already rich, but he got much, much richer. And there are other raiders who are doing the same thing. Like how much are we talking about here? Many, many, many, many, many millions of dollars. And, and shareholder's were outraged by this. You know, it's fascinating to me because I went to the University of Chicago. I'm a free market person. I, I always say I represent the people capitalism

is named after the people who provide the capital. I love capitalism. I've started four companies myself. So I love capitalism, but the people who rhapsodize about the purity of the free market just get weak in the knees when the free market doesn't like what they're doing. And they either want to shut up their critics.

They want to make it impossible for them to raise these questions or to go public with them. And I don't understand that at all. It seems to me, and I can say as a person who has started businesses, as difficult as it is, the people who complain to you, the customers who complain to you are your best friends because they tell you how to do better. Yeah. I mean, capitalism is all fun and games when you're the one that's winning. We saw this with GameStop, Which is a different story.

Well, it's a different story. But you know, I'm the co-author of a textbook, an MBA textbook about corporate governance. And my favorite page in the textbook, I didn't write, which is a chart of all of the top 20 companies by market cap by decade. So it goes like the 1950s, 60s, 70s, 80s. These are the top 20 companies in America by market cap. Now I'm just not going to surprise you that for a long time, we're seeing the same names, the same names, the same names.

Then all of a sudden. Names like Kodak fall off the list. They did barely exist anymore. And companies that didn't weren't even dreamt of even their founders weren't alive when the, when the chart started. All of a sudden, Facebook, Amazon, and Apple are at the top of the list. You know, it would be nice to say that they will stay there, but the problem is that even the best and most vibrant and robust companies tend to get a little sclerotic and set in their ways, and then somebody comes and steals their lunch. Sclerotic is such a good Scrabble word. It's a good one. Can you just help us step back for a second now and contextualize like why we should care about the fights at Berkshire

and Tesla in particular? These are the ones that are in the news right now. You might own a little bit of Berkshire. I mean, I own a little bit of both. A very, very tiny amount. Obviously, Berkshire B shares, not A shares. But why? Why should we care about the shenanigans going on in the boardroom? Well, what did I just say? I just said the companies that were at the top of the list don't even exist anymore. And it's because there was no pushback from the market. There was no pushback from, you know, why should I, why should I maintain the outside of my house?

Because if I don't, it's going to deteriorate. It's going to be worthless. And you know, there may be some times when a company's doing something you don't like and you want to sell out. I was lucky that I got rid of my Tesla shares near the top. But very often, you know, as somebody once said, the best way to make money is to put all your eggs in one basket and then watch the basket. You can't just set it and forget it. If you are going to be a shareholder, you're responsible for what that company does. And if you don't watch them,

they will be happy to put their hands on a cookie jar and take your money. But also, even if you're just an index fund and chill type of investor, you should still care. Which brings me to how we end all of our episodes now by asking our guests for a tip listeners can take straight to the bank. Can you share any advice that you would have,

whether you're invested in a company or if you are a shareholder via an index fund that we should do if we don't agree with business or ethical decisions made by a company? Listen, the one thing I want everybody to do is to write your broker, your index fund manager, whoever it is that you're dealing with, and ask them how they vote their proxies. Ask them to send you a copy of their proxy policies. But I also give you one more piece of advice, which is this. I used to have a company, which I've sold, so it's still going strong, but I used to have a company that evaluated boards of directors like bonds, AAA to junk. And we had a very complicated,

very sophisticated algorithm for doing that. And it was quantitative and qualitative and blah, blah, blah. But I will tell you, you will get 95% of the way there. If you short all of the companies that are the ones that most overpay their executives, that is a short sell. Now that's interesting. How do you figure that out? Well, generally speaking, Businessweek and the Wall Street Journal and other places will say most overpaid executives every year when the annual meetings happen. And so you'll have a list and it's not hard to find that. That can be a cool new endeavor potentially for you now. Like an ATF that shorts the highest executive comp. There's something too that does like the the shorting of Jim

Kramer's picks or... Well I'm also gonna send you some information about a place that will either vote your proxies for free and they do a great job or give you advice about how to vote them if there's a complicated issue. You know you're reminding me that I I never pay attention to those and I should. Yes you should. Do I suck? No, not at all. I'm just not a great corporate citizen. You throw out all those blue shrink wrap packages? I know. I mean I don't actually like more realistically just the emails. Well I mean you could have had a chance to back up your buddy Warren by voting against those terrible proposals. If he only was my buddy, he were buddies in my mind. I'm going to send you my picture of me with Warren. Oh, please do.

We'll make that the cover art of this. Somebody was going to take a picture of us together. He said, I'm going to pretend I'm whispering a stock tip in your ear. And so you'll see what he said. Oh, look like I'm giving you a stock tip. So you'll see what he said. Look like I'm giving you a stack tip. So you'll see what I did. Okay, Warren. I love that. Look at Warren. Money Rehab is a production of Money News Network. I'm your host, Nicole Lapin. Money Rehab's executive producer is Morgan LeVoy. Our researcher is Emily Holmes. Do you need some money rehab? And let's be

honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at MoneyNews and TikTok at MoneyNewsNetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.