Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Gadfly

What it is:

A gadfly is a shareholder who publicly criticizes a company's executives at the annual shareholders meeting.
 

How it works (Example):

The term gets its name from the insect, which bites and annoys animals (usually livestock).

There are many famous gadflies, but one of the most notable was Evelyn Y. Davis, who spent 40 years confronting managers at annual meetings regarding their compensation and performance. Sometimes she wore costumes and bathing suits in the meetings to get attention. In one instance, she badgered the board of Bristol-Myers Squibb to change its corporate charter to require annual elections for all board members. She was able to get Dow Jones and a real estate firm to follow suit as well. In 2003, she made more than 50 proposals at various companies, including (but not limited to) AT&T, DuPont, Ford, and JPMorgan.

Why it Matters:

Gadflies are annoying to management, but they are useful to the rest of us. They often draw attention to problems that others may have overlooked, and they can encourage action from other shareholders. Their courage to stand up and dissent is notable if not entertaining at times.
 

Related Terms View All
  • Auction Market
    Though most of the trading is done via computer, auction markets can also be operated via...
  • Best Execution
    Let's assume you place an order to buy 100 shares of Company XYZ stock. The current quote...
  • Book-Entry Savings Bond
    Savings bonds are bonds issued by the U.S. government at face values ranging from $50 to...
  • Break-Even Point
    The basic idea behind break-even point is to calculate the point at which revenues begin...
  • Calendar Year
    If Company XYZ starts its fiscal year on January 1 and ends its fiscal year on December...