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My Proxy Wars

Michael Flack

I JUST RECEIVED an email from TD Ameritrade Clearing, Inc., imploring me to “Vote now! KYNDRYL HOLDINGS, INC. Annual Meeting.”

For the few who haven’t read my fascinating earlier article, I will share my heuristic for voting proxies: “yes” to independent chairmen, “no” to classified boards, “no” to options, and then “yes” or “no” to whatever piques my interest.

I’ll usually spend 10 minutes max thoroughly reviewing the issues for the first proxy I receive in the new year. I’ll spend about one minute for the last one I receive—with a logarithmic decrease in between.

Well, after voting my Equity Residential (symbol: EQR) proxy back on May 3, I thought my yearly work was done. That meant I could begin a well-deserved rest until next year’s onslaught begins. I could use my newfound free time to work on a miniaturized model of the New York Stock Exchange trading floor.

Unfortunately, the TD email interrupted my reverie. I was quite tempted to delete it. But then I just had to find the answer to the same three questions that you must be asking yourself right now: What the hell is Kyndryl (KD)? What the hell does it do? And what’s with the name?

I also wanted to know how I came to own a stock with such a ridiculous-sounding name. Years ago, I bought shares in a company with an equally ridiculous-sounding name—Enron—and there’s no way I would make that mistake again. That said, Enron did sound better than its next name: Enron Creditors Recovery Corp.

I was hoping that after clicking on the annual report and reading “A Message from Our Chairman and Chief Executive Officer”—so much for the independent chairman—I could quickly get answers to my questions. No such luck.

All I learned was “Kyndryl has solidified its place in a broader market… delivering on our overarching mission to modernize and manage the world’s mission-critical systems and services―the ‘hearts and lungs’―of the most important enterprises around the world.” It also said all this was “leaning into Kyndryl’s advanced delivery advantage.”

The “hearts and lungs” talk made me think Kyndryl might be a medical company. The “mission-critical” and “delivery advantage” might mean some sort of defense company. The “services” part… well, that might mean just about anything.

I then did what I should have done in the first place, and went to Wikipedia. It was there that I discovered that “Kyndryl Holdings, Inc. is an American multinational information technology infrastructure services provider that designs, builds, manages and develops large-scale information systems.”

Okay, I thought, that’s more than I knew before. But I still wasn’t sure what that all meant. I could have researched it further, but I was beginning to lose interest—and coming up on the 10-minute deadline.

I did summon enough resolve to continue reading and I’m glad I did. It was then I learned the company was created from the spinoff of IBM‘s infrastructure services business. It was given the name Kyndryl in April 2021, with “Kyn” referencing “kinship” and “Dryl” referencing “tendril.”

So, I thought, “the name is a… pun? And not just one, but two?” Did they append the word “Holdings” to make it all sound more like a real company and less like a pharmaceutical used to treat hair loss in extended families?

It all seemed so absurd that I immediately decided to sell my shares. I thought better of it when I realized this would require me to log onto my online brokerage account, with the distinct possibility of glimpsing the total value of all my holdings.

Instead, I went ahead and voted my proxy. I voted against all the board members as the board is classified. I voted against the compensation plan because it includes options. Finally, I voted against the appointment of PricewaterhouseCoopers as auditor because, well, by then I was just feeling obstinate.

Kyndryl Schmyndryl.

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corrupt
corrupt
4 months ago

For some reason I have had very bad results when it comes to spin-offs. I’m worried about the forthcoming JNJ spinoff.

Michael1
Michael1
4 months ago
Reply to  corrupt

Likewise. When Abbot Labs split off Abbvie, I kept the former and sold the latter for no good reason. Oh well.

We’ll see what happens with Kellogg.

mjflack
mjflack
4 months ago
Reply to  corrupt

corrupt, I own some shares myself and agree.

Mark Royer
Mark Royer
4 months ago

Curious about Enron Creditors Recovery Corp. My parents left me 580 shares of Enron stock and I was under the impression it was worth zero. I even framed the stock certificate as a kind of joke. I would imagine that Enron Creditors Recovery Corp. has exhausted any resources that remained. Anyone know any more about that?

Humble Reader
Humble Reader
4 months ago

I totally understand your account log-in avoidance. During a down market I do not need to be immediately informed of my failure to correctly prognosticate what seems obvious after the fact.

Larry Sayler
Larry Sayler
4 months ago

Michael, I think you have found a real winner. I just skimmed the letter from the Chair. Their “future is bright” as they “create momentum” and as they “drive toward profitable growth.” (This last phrase makes me think that they are currently losing money.) How could you be upset at a company that uses so many platitudes?

mjflack
mjflack
4 months ago
Reply to  Larry Sayler

Larry Sayler, I hope they drive faster as the stock is down about 75% from the spin-off.

David J. Kupstas
David J. Kupstas
4 months ago

When that Kyndryl has shot up in value, you’ll be glad you held on. Ha ha. I also just got a request to vote on some stock. I’ll probably put it off until they keep reminding me.

Nate Allen
Nate Allen
4 months ago

Absurd indeed. Thanks for the laughs, Michael.

mjflack
mjflack
4 months ago
Reply to  Nate Allen

Nate Allen, thanks for reading.

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