CME annual meeting disrupted by chanting activists
CHICAGO (Reuters) - CME Group (CME.O) ejected about 50 activist shareholders from a raucous annual meeting on Wednesday after they shouted for the exchange operator to pay its "fair share" of taxes.
"Pay your fair share! Pay your fair share!" demonstrators chanted as they were escorted out of the meeting room by CME security guards.
Several Chicago police took the group outside, where they were joined by several hundred who had convened at CME's headquarters. Their chants could be heard as CME Executive Chairman and President Terrence Duffy resumed the meeting.
"There is a perception that we got a tax break," Duffy said at the outset of the meeting. "This is not true."
He said the company had been taxed unfairly as if all its business was conducted in Illinois, when much of it is conducted electronically from elsewhere.
CME shareholders, many of whom are traders on CME's exchanges, are traditionally vocal at their annual meetings, and that tradition continued in an orderly fashion after the activists had left.
Several asked pointed questions about brokerage firm MF Global MFGLQ.PK, whose failure on October 31 rocked the futures industry and hurt volume at CME. Duffy repeatedly defended CME staff's actions, saying they did everything they could to keep customers' money safe.
Former MF Global clients are still missing an estimated $1.6 billion that was missing from accounts when the brokerage collapsed.
Shareholders complained about a drop in CME's share price and one blamed a recent decline on CME's failed bid for the London Metal Exchange. CME pulled out of the bidding earlier this week.
CME's stock has gained nearly 3 percent so far this year, but is still down about 9 percent since MF Global filed for bankruptcy.
Duffy declined to comment on the LME, but blamed the share price decline on what he said was a misperception that a new designation of CME as a "systemically important" institution would force the company to come up with new capital to guard against failures of its top customers.
A U.S. risk council on Tuesday put CME on its list of systemically important financial institutions, and Duffy said the move was expected and CME was prepared.
The demonstrators who disrupted the meeting were protesting a move last year by the Illinois legislature to cut about $85 million from CME's annual tax bill by 2014 after the massive exchange operator threatened to move out of state.
The Rev. Jason Coulter of Ravenswood United Church of Christ in Chicago told CME executives to return the money "to people who so desperately need it" in Illinois. Illinois legislators are facing a May 31 deadline to craft a deal to plug the state's chronic budget deficit.
Earlier on Wednesday, Chicago police arrested 15 people protesting the tax breaks outside CME's Chicago Board of Trade building.
Inspired by the Occupy Wall Street movement, demonstrators have been targeting corporate shareholder meetings this spring to keep a spotlight on concerns about economic disparity in the United States.
More than 500 demonstrators engulfed Wells Fargo & Co's (WFC.N) meeting site in April to express anger over home foreclosures, resulting in 24 arrests.