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Forum Report: Shareholder Voting Recommendations of Proxy Advisory Firms


(May 23, 2008)



Forum Report

Shareholder Voting Recommendations of Proxy Advisory Firms

            All four of the recognized U.S. proxy advisory firms have issued reports recommending that their clients vote on May 29 in favor of the proposed JPMorgan acquisition of Bear Stearns, applying policy concepts that differed from the "Wall Street" views expressed by participants in the Forum's May 14 open meeting hosted by the New York Society of Security Analysts.

            As previously reported, three of these firms stated that they considered the negotiation process and value of the proposed transaction to be unfair or improper, but nevertheless recommended voting for it in the absence of any real alternative.  Each has made its report available to Forum participants:

            The fourth advisory firm, RiskMetrics (formerly known as Institutional Shareholder Services, or “ISS”), summarized the transaction as a “scenario” in which a policeman had given someone until the next morning to sell a house or have it taken away for nothing, but recommended a favorable vote based on theories about what might happen if shareholders rejected the proposal.  (They did not reconcile this reasoning with their recognition in another section of the same report that JPMorgan controls a sufficient number of shares to assure approval of the transaction.)  RiskMetrics has not made its report available to Forum participants.

           GL – May 23, 2008


Gary Lutin

Lutin & Company

575 Madison Avenue, 10th Floor

New York, New York 10022

Tel: 212-605-0335






This Forum program is open, free of charge, to all shareholders of The Bear Stearns Companies, Inc. ("BSC") and to any fiduciaries or professionals concerned with their investment decisions.  Its purpose is to provide shareholders with access to information and a free exchange of views on issues relating to their evaluations of alternatives, addressing issues described in the Forum Summary.

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