A woman of influence
By F. Brinley Bruton

A woman of influence - When shareholder activist Evelyn Davis speaks, many important CEOs listen - whether they want to or not

Evelyn Davis, a 70-something who chides CEOs as easily as if they were her grandchildren, put in a typical performance recently at IBM's shareholder meeting.

"When are you going to start building revenues?" the shareholder activist asked the chairman of the world's No. 1 computer company, Louis Gerstner. "Instead of Big Blue, it has been a little bit of pale blue recently," the corporate gadfly said, playing on the computer giant's nickname.

She did not cede the floor gracefully - Davis is renowned for many things, but retreating is not one of them - and chided Gerstner for not allowing newly appointed Chief Executive Sam Palmisano to speak.

"He's young and handsome. Have him answer my questions," she remonstrated with Gerstner, who for the most part parried good-naturedly with Davis as she dominated the meeting.

The exchange - which involved prodding questions along with a healthy dose of flirting - was quintessential Davis, who has been a longtime fixture on the U.S. shareholder meeting circuit.

With a preference for donning the labels of European designers like Chanel, Armani and "old" Valentino, Davis has been attending these gatherings for over 40 years. IBM in 1959 was her first, she said, after she inherited stock from her father.

The heads of some of the country's largest corporations are on a first-name basis with her and don't hesitate to take her calls. Davis counts some executives, like No. 1 U.S. financial services firm Citigroup Inc.'s chairman and chief executive, Sanford "Sandy" Weill, as friends. By some measures, she has helped make companies more responsive to small shareholder wants.

But there are those who believe Davis has lost touch with reality and only wants to rub shoulders with top-level CEOs. Davis, who was born Jewish in the Netherlands and survived the Holocaust, also has been faulted for her harsh manner with women or anyone who is not a bigwig.

Davis, who said she owns shares in about 86 companies, is one of a tribe of gadflies who tour the country to attend shareholder meetings. Often, these people own just a few shares, enabling them to file proposals and take the floor.

Among Davis' causes are calls to change or rotate their annual meeting locations, affirm political nonpartisanship, disclose political contributions and, in the case of auto giant General Motors, report on car accidents caused by phone use. Her proposals rarely get passed, but Davis said she has broken new ground for meeker shareholder activists.

"I have had a tremendous impact," she said. "When I stand up and ask questions, I also help timid souls who are not able to ask.

Davis did help to get the movement up and running, said Nell Minow, a shareholder activist and editor of The Corporate Library.

"Evelyn Davis paved the way for many, many people and taught corporate executives and corporate activists how to be effective," she said.

But Davis and others are becoming irrelevant, as the Internet often makes traveling to meetings unnecessary.

"There are now millions of Davises sitting at their terminals," Minow said. "Corporate America can run but it cannot hide."

Still, Davis' behavior often has nothing to do with corporate governance or shareholder value.

Her most recent "Highlights and Lowlights," a publication she puts out from an office in Washington's infamous Watergate complex, lambastes a female employee of Verizon Communications, the No. 1 U.S. local telephone company and dominant carrier in New Jersey.

While she sometimes directs her ire at women, and those who are not corporate top brass - "I don't deal with flunkies, only presidents and chairmen" - Davis' comments at shareholder meetings often veer off the point.

At leading U.S. investment bank Goldman Sachs Group Inc.'s shareholder meeting last month, Davis characteristically monopolized the question-and-answer segment. At one point, she chastised Chief Executive Henry "Hank" Paulson for not being around before the event.

Companies have learned how to live with Davis.

"Nobody quite knows how she came to pass," said the head of investor relations for a major U.S. company, who has dealt with Davis for over a decade. "She is kind of like the Beanie Baby phenomenon," - a reference to the small stuffed animals that sparked an unexpected craze among American children and their parents in the late 1990s.

"Most CEOs find her incredibly obnoxious," said the investor relations executive, who asked to remain anonymous, like most people interviewed about Davis.