Issue 148 – June 2025
An investor letter only a lawyer could love
A “friendly” letter to shareholders should be more of an executive summary than a place for everything but the kitchen sink.
There are letters that are easy to read. Then there are letters to shareholders. No, not the ones Warren Buffet famously wrote so his sister, Doris, could understand. Ones clearly written by a committee of lawyers.
I got my hands on one addressed to Parkland shareholders. This is the company involved in an “Arrangement” that…well…it’s confusing. The letter itself is five pages, bound into a 158-page book-like document. We are advised to “read it carefully.”
We certainly have to read carefully, so I knew it needed to be a “before & after.” Let’s take a look at the opening, with a special shoutout to “an arrangement agreement as amended by an amending agreement”:
The Hemingway app is a fun way to see how easy you’re making it to read your work. No highlight? You’re doing well. Yellow? A little trickier. Pinky-red? VERY hard to read. This opening earns a readability rating of “Post-graduate," typical of dense academic papers.
Wait, the document lays out some questions and answers about “the Arrangement.” Is the answer to “What is the Arrangement?” any better? Not much, although one sentence is actually only “hard to read.”
Oof, where to start with making this understandable? Here are some of the ways I tried:
1. Get to the point. I began with an introduction:
We’re writing to Parkland Corporation shareholders to ask you to vote on a resolution at the upcoming annual meeting. Parkland believes this resolution is the right choice, and we want you to have the information needed to make your decision.
2. Shorten sentences. The American Press Institute says if your sentences average eight to 14 words, you’ll help 90% of readers understand what you’ve written. You can guess what kind of understanding results from the 188 words in the first sentence.
3. Move less important information to later sentences, or remove it. The lengthy preamble starts with information that’s probably the worst way to start any writing: (1) a date, unless you’re talking about something truly significant like 9/11; and (2) somebody “announcing.”
4. Use simpler, more familiar words. “About” instead of “approximately.” “Partial” instead of “fractional.”
5. Use bullet points to make a list easier to read. Start each one with the most understandable part (“$44.00 in cash”) rather than the legal name (“the Cash Elected Consideration”).
Here’s my rewrite, which comes in at Grade 10 readability:
Obviously, the lawyers need to say certain things in certain complicated ways. But remember, this is a letter. It hits the highlights, not every single detail. They have another 150 pages to throw in all those must-haves. A “friendly” letter to shareholders should be more of an executive summary than a place for everything but the kitchen sink.
Have you seen a “before” piece of writing that needs an “after”? Please share! I’m always looking for good (and you know I mean bad) examples.
Related reading:
Why Warren Buffett writes his annual letter as if he’s talking to his sisters
Expert Iva Cheung discusses plain language in legal and medical documents
In the Red Jacket Diaries:
Links about plain language and jargon (and a few that made me laugh)
Fight for readability with five easy fixes
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