Dear Chris Martin:
It's been a number of weeks since you, Coldplay's lead singer, uttered your off-the-cuff, irresponsible comment that "Shareholders are the great evil of this modern world." Since then, as far as I know, you've neither recanted nor suggested that your remarks were overblown. Like the refrain from one of your latest songs, "These are things that I don't understand."
Your words had to do with your record company, EMI Group (NQB: EMIPY), which had issued a profit warning in part because of the delayed release of Coldplay's latest album. You opined that you didn't really care about EMI as you spoke about "the slavery that we are all under to shareholders." You explained that it's "very strange for us that we spent 18 months in the studio just trying to make songs that make us feel a certain way and then suddenly become part of this corporate machine."
EMI got it wrong, too. The record company downplayed your remarks by responding, "We don't expect or want our rock stars to be stockbrokers." Huh? As far as I know, no one ever requested that Coldplay place cold calls about potential stock purchases. (Although that would be a most interesting call to receive, I'm sure.)
Look, I sympathize if you felt that your band had to make artistic sacrifices in order to make a commercially viable album. But if you've got an issue with EMI's management, please deal with it while cognizant that your words can influence your fans. By summarily vilifying the entire shareholder class, you indict the very notion of equity investing. And that's twisted logic from one who has benefited from the capital provided by EMI's shareholders to promote you to superstardom and (one assumes) pay you big bucks. More importantly, in this soundbite world, your remarks can easily be construed as dissing investment entirely, and that's dangerous for both the financial health of your fans and of many of the causes that your contributions help fund.
Let's go back to square one. A shareholder provides capital to a company in return for voting rights and an ownership stake. Sure, shareholders like profits, and deservedly so, as they assume the risk of capital loss. It's not all about greed. Their economic investment can help seed innovative startups and promote employment. Shareholders vote for directors who select executive officers. Directors are legally bound to run the company in the best interests of the shareholders.
In essence, the role of shareholders is analogous to that of voters in a democracy. You've urged British youth to vote to let their politicians know they care. The same can be done within a corporation. Shareholder activism can foster change -- witness the pressure for South African divestment that helped end apartheid in the 1980s, or Starbucks'
Some folks even choose to invest only in companies they deem "socially responsible." The idea of socially responsible investing has caught fire with the success of numerous mutual funds that screen their portfolios for a variety of self-defined features, from finding businesses conducive to "green" concerns to avoiding the "sin" stocks of companies that engage in the production or promotion of alcohol, gambling, or firearms. Corporations themselves are paying more heed to the public's concerns regarding their role as global citizens. EMI's website even has a page devoted to social responsibility from which you can download its report outlining its efforts.
You have a right to your opinion, but perhaps you just got caught with a rush of blood to the head. It's dangerous to make sweeping generalizations, especially when you're so popular that you've sold more than 20 million albums worldwide. You've noted that Coldplay's success gives you the ability to talk about subjects important to you, such as fair trade. Instead of dissing the very system that has rewarded you with sufficient financial independence so that you feel comfortable taking risks, help others to achieve the same. Most of us can't reach financial security just by hoarding wages. Investment is needed, and over the long term, equity markets have historically outperformed other asset classes. Not everyone needs to become an investment guru or enamored of every corporation, but we should all understand some financial basics in order to reach significant life goals such as college and retirement.
I've read that you wish to appear on Extreme Makeover -- Home Edition. Well, we at the Fool would like to invite you to appear on The Motley Fool Radio Show on NPR when you're here in August and September on your U.S. tour, to give us a chance to correct any misperceptions and to chat about the importance of financial literacy and putting one's fiscal house in order. By focusing your celebrity on this topic, some of your fans may yet seek to change the world as they cast their votes in the corporate arena. You could even hum a tune if you like -- I'm sure the Fool would comp you a subscription to the message boards in exchange for a Motley Fool theme song.
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Fool contributor S.J. Caplan believes firmly in both the importance of financial literacy and a good tune. She does not own shares of any of the companies mentioned in this article.