General Motors (NYSE:GM) CEO Dan Akerson went on the defensive earlier this week while addressing shareholders during the company’s annual shareholder meeting. The shareholders’ principal gripes were a lagging stock performance — GM is down 33% from the stock’s November 2010 IPO price — and the lack of a dividend, last seen by shareholders in July 2008 prior to GM’s “troubles.”
By all accounts, Akerson had answers and rationale for most of the questions fired high, hard and inside while he stood in the batter’s box, but I have a better idea for Mr. Akerson: a revised shareholder letter.
It might go something like this:
Dear Fellow Shareholders:
It was a pleasure seeing so many of you again last week. I appreciate your earnest concerns as they relate to our iconic company. Indeed, I share some of those same concerns since … well, I too have a great stake in the company’s success or failure.
But I digress.
Are you people kidding me? You’re worried and upset about the stock price? Hello? Be happy we have a stock price. We declared bankruptcy in 2009! Remember?
Thanks to the good graces of the People of the United States, we still have a company, and actually got the chance to have another shot at making this thing go. So first things first: We are open for business, and that’s a good thing.
While many of you might’ve gotten hosed on exchanging your virtually worthless stock into new shares of common stock under our IPO, at least you have stock! I think ex-Lehman employees would gladly sit in your seat today.
Now, let’s get to issue No. 2: A dividend? You want a dividend?
First of all, we need to keep as much money as we can in the company because the same bunch of you that want a higher stock price and this dividend also want your pensions. We owe you folks $134 billion, and the pension assets are only valued at $109 billion, and we have $31.4 billion in cash on hand.
Do the math.
And one more thing about the dividend and share price: Right now, the biggest shareholder in our company is Tim Geithner, who did not attend today’s meeting. Tim owns 500 million shares on behalf of the U.S. Treasury. You all better hope he is a little bit more patient than you, because if he decides to get out all at once, duck and cover.
My dear shareholders, let’s focus on some of the things we are doing right:
Our European market stinks on rye, what with recession, depression, infighting, Euro 2012 and all the other distractions going on over there. We lost $256 million “across the pond” last quarter, but we’re working on it. We reached agreements with unions in Poland and England, and are working with Germany, too. With any luck, we’ll ring out more efficiency in our factories, then Spain will win the Henri Delaunay trophy, spurring economic growth and avoiding default.
We had a darn good year in 2011! We managed a record $7.6 billion profit, and we are once again at the top of the world in auto sales. We are fifth in the Fortune 500 in revenues. OK, we’re 20th in terms of profitability, but hey, that’s not too shabby.
By the way, our share price is up 8% this year, outpacing the Ford (NYSE:F) boys. Yeah, they’re no longer junk-bond worthy, but big whoop.
Look, I know you all think this is easy, and we should just cough up some dividend checks, maybe repurchase some shares and jack up the EPS that way. Nonsense. This is hard work, and it will take lots of time.
So in closing, let me thank you for hammering me today, and also for providing me with a vote of confidence — as I see that you voted to re-elect all 12 current members of our board of directors.
— Dan Akerson
Marc Bastow is an Assistant Editor of InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities.