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HSN's first annual meeting in 12 years a closely held affair

HSN’s first annual meeting in 12 years was a sparsely attended private affair. Held at the TV shopping network’s St. Petersburg headquarters Tuesday, only shareholders with proxy cards in hand were waved through the guardhouse gate.

The press and other outsiders were barred.

“It’s standard practice to limit annual meetings to shareholders and, since this was our first as a public company again, we decided weeks ago to make it shareholders only,” said Mindy Grossman , chief executive officer of HSN Inc.

In addition to shareholder votes on corporate governance, most public companies use their required annual meetings as a forum to field shareholders’ questions about performance and strategy while staging a media event for the press and securities analysts.

Wal-Mart Stores Inc. flies in celebrity entertainers, who turn its annual meeting into a half-day pep rally for employees that draws 18,000. For 13 years, Walt Disney Co. put its annual meeting on a national tour of major cities so more holders of its widely held stock could attend.

But many companies try to get their shareholder meetings over with as little fuss as possible. Eckerd Corp., the defunct Clearwater drugstore chain, once held a mostly scripted one in a corner of the employee cafeteria that lasted 10 minutes.

HSN’s last annual meeting drew only a half-dozen individual investors and a lone reporter. It was the second one presided over by former chairman and chief executive Barry Diller. The first, staged in the network call center/studios, drew 200 to hear his plans for the network. The following year, Diller, who controlled three-quarters of the company’s shares, saw no need even for other directors to show up for the session in a small conference room, but he did take questions.

At HSN on Tuesday, the whole affair lasted about 15 minutes, Grossman said. Attending were fewer than two dozen people, 10 of them directors who were re-elected, and most of HSN’s top executives. No rank-and-file employees or other investors made it. But people there represented voting power of 93 percent of outstanding shares.

Shareholders also approved a management bonus plan geared to provide more performance incentives than one that has been tied to stock prices HSN is far from hitting. The plan also enhances management payoffs in the event of a change in ownership.

HSN stock has been all over the board since launching at $10 a share weeks before last fall’s market meltdown. Shares have traded as high as $15.96 and as low as $1.44. HSN closed down 8 percent Tuesday at $9.72.

Revenue at HSN Inc. — among the bay area’s top 10 public companies based on annual revenue — slid 7 percent in the first quarter compared with a year ago. But that was better than peers such as Shop NBC, which dropped 34 percent, and QVC, which fell 10 percent.

Will Grossman open the meeting next time?

“I’ll consider it,” Grossman replied. “But I have a whole year.”

Meanwhile, John Malone’s Liberty Media Corp., which owns rival QVC outright and until 1995 controlled HSN, too, on Monday reported increasing its stake in HSN from 30 to 33 percent. The telecommunications mogul’s interactive commerce unit paid $4.63 a share in an open-market transaction.

When Diller spun off HSN from his IAC/InterActiveCorp last summer, he insisted HSN’s new executive team get time to fly on its own. Liberty, which appoints two of 10 HSN board seats, agreed not to try increasing its stake above 35 percent before August 2010.

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

HSN's first annual meeting in 12 years a closely held affair 05/19/09 [Last modified: Tuesday, May 19, 2009 10:38pm]

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