Companies drop investor freebies amid hard times

By Martha Graybow

NEW YORK (Reuters) - Forget the goody bags. Many shareholders accustomed to grabbing free food and gifts at U.S. corporate annual meetings are going home empty-handed.

Citigroup, 3M Co, Hershey Co and other big businesses have scaled back the freebies at their yearly stockholder gatherings, deciding to send a message of austerity to investors amid the rough economy.

The annual meeting is a corporate rite in which stockholders typically elect members of the board of directors, approve the appointment of outside auditors and listen to management deliver optimistic remarks about the business.

Most individual investors never go to these meetings, usually held in the spring by companies whose fiscal years end in December. But some do turn up in part because they are enticed by a free lunch, gifts or live entertainment.

But some meetings are being held without the frills these days. Citigroup, for example, did not supply the coffee and pastries it has historically provided when it held its annual gathering earlier this week.

Citigroup Chairman Richard Parsons told stockholders that offering refreshments would have required the bank to rent more space at the Midtown Manhattan hotel where the meeting took place, increasing the expense of the event. In these times, he said, saving money is a good thing.

With the government funneling $45 billion of capital into the bank and the company's share price in the doldrums, many people might agree with the no-doughnuts policy.

3M's shareholders already have been told not to expect any frills at the industrial manufacturer's May 12 meeting in St. Paul, Minnesota.

The company informed them in a note enclosed with its annual report that this year's meeting will be "somewhat different." That means no lunch -- and no gift bags stuffed with 3M products such as Post-it notes and bandages either.

Hershey shareholders, set to meet on April 30, also will forego the treats the company traditionally has distributed.

The change is not a cost-cutting move but is related to the economic turmoil, said spokesman Kirk Saville. He said the Pennsylvania-based candymaker decided to donate money to a local food bank in lieu of giving shareholder gifts.

"This change is consistent with our long-term commitment to the community," Saville said.

The Walt Disney Co held its annual meeting last month at a theater in a gritty section of Oakland, California, a less ritzy affair than past events that have featured live entertainment, such as life-sized cartoon characters and singer Randy Newman performing live for shareholders two years ago.

Live entertainment has been a feature of Wal-Mart Stores Inc's annual meetings, with performances by singers including Garth Brooks and Jessica Simpson.

The world's largest retailer -- which has fared better than many other big businesses amid the recession as shoppers seek its low prices on household staples -- said the identity of the performer is always a surprise for the people who attend the meeting. A spokesman declined to comment about any specific plans surrounding this year's gathering, set for June 5.