Manager, Pimco Total Return Fund
As caretaker of the $235 billion Pimco Total Return Fund, William Gross’s words make waves in the $14 trillion bond market. This spring, he took General Electric to task for what he considered misleading investors by overloading on short-term debt and massaging earnings. That sent GE stock tumbling more than 6 percent in two days and forced company managers to promise to reduce short-term debt.
In October 1999, observers thought he was crazy when he predicted that the U.S. economy was on the skids. Now they’re listening closely to his forecast of a slow, protracted recovery.
Institutional Shareholder Services
When ISS talks, people listen. The proxy advisory group headed by Jamie Heard analyzes proxy issues and provides vote recommendations for 10,000 U.S. shareholder meetings each year.
ISS’s recommendation to back Hewlett-Packard’s $22 billion bid for Compaq Computer tipped the scales in one of the largest and hardest-fought merger-approval battles in recent memory. More recently, large institutional investors are taking its advice and not investing in companies with excessive stock-option overhang.
J. Mark Mobius
Managing Director, Templeton Asset Management Ltd.
The dean of emerging markets investing, Mark Mobius pushes his reform agenda worldwide. Earlier this year, he pushed for his own seat on the board of OAO Lukoil Holdings, Russia’s largest oil company — a rare feat for an American. He also sits on the board of Wimm-Bill-Dann, Russia’s biggest consumer-goods company.
His influence has waned somewhat as emerging markets have performed poorly, but that has only stiffened his resolve. Mobius maintains that questionable business dealings, poor management, and dismissive treatment of shareholders offer opportunity for change and, of course, higher returns.
President, M&A Consulting Inc.
In Japan, shareholders have traditionally held little sway in corporate policy-making, with boards generally insiders-only affairs. That could change, thanks to the efforts of Yoshiaki Murakami, 42. In January, the former Trade Ministry bureaucrat demanded that cash-rich apparel maker Tokyo Style Co. raise dividends and buy back its own stock. To emphasize the point, Murakami, whose firm is Tokyo Style’s largest shareholder, is nominating two outside directors.
He is also credited with launching the first-ever hostile bid by one Japanese company for another, in 1999, and has urged pension funds to take an active role in company policy-making, Calpers-style.
Former Chairman, Gartmore Investment Management
Last year, Myners, 53, wrote a landmark review of the pension fund industry in the UK. His findings led to a government crackdown on soft commissions, and code changes that require greater transparency in fee structures for asset managers.
Myners’s latest crusade calls for a greater role for nonexecutive board members in the UK. As nonexecutive director of the Bank of New York and Marks & Spencer, among others, he’s putting theory into practice. Myners calls nonexecutive board members the “missing link” in the chain of good corporate governance. He recently caused a stir when he proposed that they meet formally with large investors once a year.
CEO, Hermes Pensions Mgmnt.
In just a few months at the helm of Hermes Pensions Management Ltd., which manages the British Telecom pension fund, Watson, 57, has already established himself as a leading corporate watchdog. His main goal: to reform corporate governance policies.
To that end, he pushes the companies in which Hermes invests to adopt clearer disclosure of important financial details. He wants better accountability to shareholders by independent directors, auditors, and executives. Watson succeeded Alastair Ross Goobey, who established a tradition of shareholder activism at Hermes.
While Hong Kong regulators talk about untangling the island’s sticky networks of family-owned companies, insiders say Webb, 36, is actually doing it. His Webb-site.com “speaks the unspeakable,” as he says, taking companies to task over sketchy insider IPO and M&A arrangements, and occasionally shaming them into reform.
In 1999, he actually forced Wheelock & Co. to increase its offer for department-store operator Lane Crawford International Ltd. through a minority-shareholder revolt. Webb’s reception among regulators has been mixed — the stock exchange appointed him to two important oversight committees last year, but financial overseers recently squashed his campaign for an exchange-funded shareholders association that would allow for class-action suits.