Wednesday, August 6, 1997
Solid Gold Cadillac
by Selena Maranjian (TMFSelena@aol.com)
Last night I popped an old movie into my VCR. My dad had taped it for me long ago, knowing that I'm a fan of the late great Judy Holliday, who won an oscar in 1950 for Born Yesterday. (A digression: In searching for a good hyperlink for Judy, I was saddened to see that my first web search for her resulted in only 88 hits, while the blue-footed booby got 100 hits, and Steve Guttenberg got 300.) The Judy Holliday film I watched last night was 1956's The Solid Gold Cadillac.
Within the first few minutes, I was marveling at the proto-Fool played by the Judy Holliday character, Laura Partridge. She's the proud stockholder of ten shares of International Projects (IP), a multinational conglomerate, and we first meet her at a shareholder meeting, where she irritates the company's management by speaking up and questioning their enormous salaries.
Miss Partridge, an aspiring actress (currently working at a department store's menswear department), remains a thorn in the side of CEO Blessington and his irritating right-hand man, Clifford Snell. They decide that in order to squelch her, they'll give her an executive position with IP. (The film was very entertaining, but some of the logic eluded me.)
Soon Miss Partridge is ensconced in her new office, with her own secretary. Her title is one that the executives made up: Director of Stockholder Relations. Blessington explains that she is to wait for any letters from shareholders and to answer them, letting them know more about the company. International Projects rarely gets such letters, though, and the bigwigs expect her to do little or nothing. Virtually everyone in the film except Laura Partridge chuckles at the notion that anyone would want to pay attention to a company's small shareholders and communicate with them.
The management does not appear to be too ethical or bright. Appointed to the Board of Directors is the CEO's brother-in-law, who underprices the Apex Electric Clock Company, which he thinks is an IP competitor, driving it out of business. Unfortunately, he later learns that Apex was a subsidiary of IP. As Miss Partridge remarks, "Somebody's gotta keep an eye on these big geniuses."
I won't go into a scene-by-scene description of what happens next, as it is a charming movie, with some unexpected twists, deserving of more viewers. But I will point out that the film's Fool-warming ultimate message is that small shareholders do matter and can make a difference. We see Laura Partridge exchanging many letters with people of modest means across the country. And ultimately, when able to work together, they bring about real change in their company.
In an age before multi-billion-dollar mutual funds, when institutional ownership of stock was not as widespread as it is today, The Solid Gold Cadillac was Foolishly getting the point across that you and I, who may own but ten shares of a company, are nevertheless co-owners of it. We have the right to be involved in its progress, and indeed, we should be actively monitoring how the company is doing and what the company is doing.
Today it might seem even easier to dismiss the possibility that small shareholders matter, but the truth is that they do. This is more pronounced in small companies, which have yet to be purchased in large chunks by institutions. In these cases, shareholders banding together (which is not too difficult to imagine now, in cyberspace) can wield some real power.
Don't believe me? Then find and watch The Solid Gold Cadillac.