When spice maker McCormick & Co. Inc. convenes its annual meeting today, security will be on high alert.
The guards won't be ensuring the safety of top executives or protecting secret company recipes, however.
They'll be keeping vigil on the goodie bags.
Bags of McCormick products, given to shareholders who attend the annual meeting, are a reflection of the tradition-minded Sparks company and a throwback to when American companies put on the ritz for their annual shareholder meetings.
They are also a reminder of how much people like free stuff.
The McCormick handout is not quite the one at the Academy Awards, when celebrities cart home gift bags with diamond-encrusted watches, false eyelashes made of mink, spa giveaways, cellular phones and free stays at lavish hotels. Even the bag the Oscar freebies come in can be worth several thousand dollars.
For the McCormick meeting, the plastic bag and all of its contents is worth about $20. This year's version is stuffed with hamburger seasoning, food coloring, baked beans, ground ginger and red beans and rice.
It may not seem like much, but the bag is so popular it helps attract nearly 1,000 people to McCormick's meeting in an era when many companies are lucky to muster a few hundred attendees. Of course, most companies give out little more than a pen or stress ball in this era of cost-cutting, experts said.
"It's clearly one of the high points of the meeting," McCormick spokesman Mac Barrett said of the bag distribution. "A considerable amount of work, thought and preparation is put into this."
Planning for what goes in the bag begins in January, as soon as employees return from the holidays. The company's chief executive officer, Robert J. Lawless, must sign off on the final collection.
The rules on getting a bag are pretty simple: You must attend the meeting to get one. You can't pick one up for anyone who wasn't able to attend.
Security is brought in because some people get a little greedy and attempt to take more than one. The meeting is set up so that shareholders have to leave the meeting room of the Marriott Hunt Valley Inn after picking up their bags, so they can't circle around and grab an extra one.
"We're not trying to be mean-spirited," Barrett said. "We just want to make sure that everyone gets one."
Companies are required to have annual meetings to keep shareholders abreast of the company's finances and give them the opportunity to question executives in person. But most meetings aren't grand affairs like McCormick's. Many are little more than a rubber stamp of board elections.
"By law, they have to conduct annual meetings of shareholders," said Tim Hanson, vice president of Identity Investor Relations, a marketing, public relations and investment firm in Michigan. "A majority of people never attend. They just send back their proxy statements."
Many extravagant meetings, and the free giveaways that went with them, went the way of budget cuts in recent years.
"It's the same with the annual report," said Ronald Mueller, a partner with Gibson, Dunn & Crutcher LLP in Washington and a contributor to the book Preparing For Your 2005 Annual Meeting.
Good, bad times
"When companies are having good years," he said, "they often have large annual reports with lots of pictures in it. In tough times, and when the stock price may not be performing as well, they don't want to say the stock is falling 50 percent and have people question why they're spending all this money on a report."
Companies with deep local roots and employees or retirees who hold shares in the company and live nearby, such as McCormick, are generally the ones who get high attendance. The Rouse Co. of Columbia, before it was bought by General Growth Properties Inc. of Chicago, once had a large following of shareholders at its meetings. Many shareholders felt a connection to the company that helped build its home town.
Controversy can also spur attendance. Walt Disney Co. has entertained a larger audience in recent years because of management turmoil.
Towson-based Black & Decker Corp., on the other hand, has a no-frills meeting that it isn't ashamed of. It doesn't give out anything free or have a fancy slide show. Few shareholders attend.
"Our attendance is relatively small because ours is strictly a business meeting, whereas McCormick's is an event," Black & Decker spokeswoman Barbara Lucas said.
Southwest Airlines Co. gives out peanuts and a set of two round-trip tickets at its meeting. About 200 shareholders attend, spokeswoman Edna Ruano said.
McCormick officials can't remember when they first started with the goodie bags. They've been doing it for at least the 15 years that Betty Marchman, administrative assistant for the company's communications department, has worked at McCormick.
Old and new
