Time to Toss the Tadpole?

Nothing entertains me more than the drama of proxy season. I know that sounds weird. Proxy statements offer no game-winning three-pointers or walk-off home runs. There's only paper, ink, and the dim halls that house annual meetings. But, for me, the gamesmanship is no less thrilling, especially when shareholders decide to take action. That's what we'll have on May 1, near the eastern shores of the San Francisco Bay.

LeapFrog Enterprises (NYSE:LF) shareholder William Steiner of New York plans to plead for a prompt sale of the company at the annual meeting at the toymaker's Emeryville, Calif. headquarters. Quoting from his resolution in the proxy:

"I believe a strong and or majority vote by the shareholders would indicate to the board the displeasure felt by the shareholders of the shareholder returns over many years and that drastic action that should be taken."

That's pretty tough talk. Not surprisingly, it gets zero support from the board. Once again quoting from the proxy:

"The board of directors believes that the value of our new strategic business plan and the future prospects of the company would not be realized by 'prompt sale of LeapFrog Enterprises, Inc. to the highest bidder.'"

For those unfamiliar, LeapFrog's plan hinges on a new CEO, Jeffrey Katz, who was hired last summer. Since, he's forced the firm to clear out obsolete inventory and begin work on newer, sleeker products.

The strategy has yet to deliver profits or meaningful returns to investors. Yet Foolish colleague Rick Munarriz sees promise in what Katz has planned. I'm inclined to agree, thanks to Amazon.com.

LeapFrog sells two of the site's top 10 "most wanted toys for 2007" -- the Leapster learning game and the LeapFrog Interactive Learn & Groove Musical Table. That's pretty impressive -- especially in the face of intense competition from Mattel (NYSE:MAT) and Hasbro (NYSE:HAS) -- and should give Katz and his team the necessary time to introduce innovations that will once again spur growth.

Still, even if it was overreaching and doomed to failure -- Oracle (NASDAQ:ORCL) CEO Larry Ellison is now the controlling shareholder, with 53% of all voting stock -- I applaud Steiner's resolution. Shareholder activism is a forcing function; it shows management that the real owners are watching those who are supposed to be the stewards.

A lack of stewardship has left LeapFrog a tadpole for years. Maybe now that investors are willing to stand up and demand more, the awkward amphibian will finally be able jump from the muck.

Toy around with related Foolishness:

• Watch LeapFrog jump into the red.
• A third-quarter leap of faith has yet to be rewarded.
• Anyone up for a game of Chutes & Ladders?

Hasbro and Amazon.com are Stock Advisor picks. To see what other companies have been selected as recommendations for the market-crushing newsletter service, take a free 30-day trial today.

Fool contributor Tim Beyers, who is ranked 1,389 out of more than 25,000 in our Motley Fool CAPS investor-intelligence database, owned shares of Oracle at the time of publication. All of his portfolio holdings can be found at Tim's Fool profile. His thoughts on Foolishness and investing may be found in his blog. Mattel was a former Inside Value pick. The Motley Fool's disclosure policy leaps but never bounds.