By Richard Jerome
Updated May 20, 1996 12:00 PM

MAJESTICALLY, THE GREAT WALL of suits spans a ballroom dais at Washington’s Four Seasons Hotel. The officers of Pepco, the Potomac Electric Power Company, have convened a stockholders’ meeting to vote on a $2.9 billion merger with Baltimore Gas and Electric. Before an audience of some 350, Pepco chairman Edward F. Mitchell opens the floor to questions, invoking a three-minute time limit for each. “Mrs. Davis is first,” he says, seeming to steel himself as a small, stooped woman bobs up from her third-row seat.

“This is absolutely ridiculous,” shouts Evelyn Y. Davis, launching into a shrill, uncannily Dr. Ruthian, 10-minute-long kvetch about the merger. Why will her 100 shares of Pepco stock (currently $25 a share) now be worth only 99.7 percent of their value? Why was the $30 million investment-banking fee paid to Goldman Sachs so high? And above all, why is the new utility combine to be based in Maryland instead of Washington? “We are the nation’s capital,” Davis cries. “They are just a province!”

As the Pepco brass shift in their chairs, the audience erupts in a cacophony of grumbles and boos. “Can someone else ask a question?” a man yells, and Davis, at long last, yields the floor. “See,” she says afterward, “I know when to stop.”

She might get some argument there. Over the past 35 years, the Dutch-born Davis, 66, has become the nation’s most obstreperous corporate gadfly. Like hay fever, this is her season: the spring, when corporations hold yearly shareholder meetings, a ritualistic bow to democracy and the normally aloof gods of commerce swallow hard and face down the masses. Worth about $3 million, Davis owns shares in 120 companies (including Time Warner, parent company of PEOPLE’S publisher). And every year she surfaces at about 40 meetings, to irritate, interrogate and exasperate America’s captains of industry.

In November, when CBS confirmed its sale to Westinghouse, Davis taunted Laurence A. Tisch, the network’s flinty outgoing chairman. “We are finally being liberated from the Tisch regime!” she crowed, refusing to yield the mike.

“You’ve had it, Evelyn!” Tisch exploded. “Sit down or be thrown out!” (She sat.)

Once, she admonished Lee Iacocca, then CEO of Chrysler, to watch his diet. Another time she accused an executive of using “Nazi” methods. One of her most persistent rants, though, onstage and off, is about the virulent influence of women in corporations. “Give her one ounce of power, and she thinks it weighs 1,000 pounds,” Davis says of the average woman executive.

“I figured there were two approaches [to her],” says Philip Caldwell, 76, now a senior managing director for Lehman Brothers in New York City, who had numerous encounters with Davis in the early ’80s, when he chaired the Ford Motor Company. “One was complete hostility. I tried to be responsive.”

Others are less indulgent. Fellow gadflies argue that Davis’s showboating undermines shareholder activism, a movement that has helped force big business to be publicly accountable. “She’ll harangue the chairman,” says John J. Gilbert, 82, who, with his late brother Lewis D, pioneered the field. “She uses vile language. I’m a gentleman. She’s not a lady.” Still, he adds, “when the devil is right, she’s right.”

Few would dispute that Davis has raised some serious issues over the years, pressing corporations to hold annual elections of directors, for example, and to curb excesses, including golden parachutes. “Many of her proposals are good ones,” says Nell Minow, 44, daughter of former FCC chairman Newton Minow, who has cowritten three books on the shareholder movement. “But her behavior makes even her useful initiatives easy to dismiss. It’s embarrassing to me as a shareholder activist to have her out there.”

Davis concedes that safeguarding corporate democracy is only part of her agenda. “The main thing,” she says, “is to keep my name out in front.”

And, not incidentally, to rake in a little money. A savvy investor, Davis has the bulk of her holdings in tax-free bonds and money market accounts and generally leaves her stocks, worth some $850,000, alone. Most of her income, though, derives from her day job. Since 1965 she has been editor and publisher—the entire staff, in fact—of Highlights mid Lowlights, a wildly idiosyncratic annual newsletter cranked out in her office at the Watergate complex in Washington, where she also owns adjoining apartments. Don’t look for H and L down at the 7-Eleven: It’s disseminated only to corporate presidents and CEOs, at $480 per subscription. While ostensibly reporting on shareholder meetings, Davis also offers political analysis (“The Contract with America had some good items in there!!!!!!”) and travel tips (“When in Europe there are many cities with VERY similar names, sometimes in the SAME country. Be sure YOU go to the one you intend to go to”). In 1985 she included the details of her facelift.

From this, Evelyn Y. Davis, as she most often refers to herself, claims to make roughly $600,000 a year. “People ask why the price is so high,” she says. “They pay for the name. Like this is an Yves St. Laurent suit I’m wearing.”

Gilbert offers a different rationale. “She calls [the CEOs] up and says, ‘Hello, darling, how many copies?’ ” he says. “They don’t really want them, but they say, ‘All right.’ It’s a form of blackmail.” (Top executives do seem to be wary of irking Davis: Of the 31 current and former CEOs contacted for this story, only Caldwell would respond.)

Historically, however, even H and L subscribers have not been exempt from Davis’s theatrics. Nor is the White House. The newsletter gains Davis entree as a journalist into presidential press conferences, which she has attended periodically since the 1970s. “I always liked Evelyn,” says former Reagan and Bush press secretary Marlin Fitzwater. “I always thought her questions were reasonable and deserved a good answer.” But there was that time, during the current Administration, when she was forced to stand because priority seating was being given to journalists who more regularly covered the White House. “She started shouting that she could buy or sell anybody in that room, and that seats ought to be allotted on an income level,” recalls one correspondent. “She’s got her own philosophy, but it’s clearly not egalitarian.”

Whence arose this Everest of self-regard? She was born Evelyn Yvonne DeJong, on Aug. 16, 1929, the younger of two children (her brother, Rudolph, is a physician) of Herman DeJong, a prominent Amsterdam neurologist, and his psychologist wife, Marianna. Growing up in a 12-room house, Evelyn says, “we had two maids and a French governess. Then the war came and that was it.” (Davis, whose mother was part-Jewish, cannot bring herself to discuss her years in Nazi-controlled Holland.) Herman and Marianna divorced after the war, and Evelyn settled with her father and brother near Baltimore, where Herman remarried and took a post at Johns Hopkins University. Evelyn, meanwhile, studied business at George Washington University. “My brother was always the favorite,” says Davis. “I was nothing. Maybe that gave me the motivation to be in the public eye. So I became rich and famous.”

She got her jump start in 1956: Dr. DeJong died, bequeathing her the securities that would accumulate into a fortune. Shortly thereafter she married William Davis, a Washington accountant, but the pair divorced after less than two years. (A second marriage, to Marvin Knudsen, a stockbroker, lasted two months; a third, to retired economist Walter Froh Jr., ended in 1994 after three years.) Davis moved to New York City, where in 1959 she attended her first stockholders’ meeting, held by IBM. “I was shaking like a leaf,” she remembers of the first time she asked a question. But Davis stoked her confidence with a public speaking course at the YWCA. She also studied securities analysis at the New York Institute of Finance and then, as she vaguely puts it, “fell into” the life of a gadfly.

By 1963, New York newspapers were regularly reporting that Davis “raised hell” at corporate meetings. That year the Daily News ran another bit of Davisiana: She was convicted of solicitation. Later she received a suspended sentence. Following up, the World-Telegram noted that Davis blamed childhood neglect for her plight. “My mother, the psychologist, didn’t care about me,” she told the paper then. Today she brusquely denies the whole affair.

Undeniable was her growing predilection—at shareholder gatherings, at least—for outlandish stunts and costumes. During a particularly contentious 1970 General Motors meeting, Davis, not to be upstaged, stripped down to a bathing suit and paraded about the room waving an American flag. In 1984 she got her first driver’s license—and the idea to have Iacocca, then of Chrysler and previously of Ford, personally deliver her first car. When he reneged, Davis claims, she phoned Caldwell, Iacocca’s rival at Ford, whom she joined for a press conference, where he handed her the keys to a Mercury Topaz. Since then, whenever Davis has bought a new car, the manufacturer’s CEO has agreed to deliver the keys in person.

Given such past triumphs, Davis isn’t about to let anything stand between her and the spotlight—certainly not a niggling detail like her own mortality. In 1981 she bought a plot in Washington’s 18th-century Rock Creek Cemetery, on which she has erected an eight-foot granite headstone. The inscription, a work in progress, includes Davis’s education, her editorship of Highlights arid Lowlights and her marital history. On a smaller stone is carved her epitaph. The first part is more than a little unsettling: “Power is greater than love.” The second—”I didn’t get where I am by standing in line nor by being shy”—is, in light of the venue, fairly bizarre.

Three years ago, Davis decided the gravesite wasn’t memorial enough. And so she formed the Evelyn Y. Davis Foundation, through which she says she has donated more than $1 million to business schools, museums and hospitals—in exchange for commemorative plaques, conspicuously placed. She has charged NationsBank, the executors of her estate, with checking the sites after her death to see that the wall space isn’t resold, “and to make sure they keep the plaques polished,” she says.

For now, though, Evelyn Y. Davis guards her own legacy. In a light rain she steers her Chrysler to the Smithsonian Institution. Jamming into a handicapped parking space, she scuffs into the lobby, where, outside a screening room, there hangs a plaque: “Supported by the Evelyn Y. Davis Foundation.”

“Do you think it needs shining?” she asks. Just then a middle-aged couple wanders into view.

“Where are you people from?” she inquires.

“Houston,” they reply in unison.

Davis points to the plaque. “Do you know who Evelyn Y. Davis is?”

“No, I’m afraid we don’t,” the woman replies, looking oddly ashamed of it.

The gadfly straightens up, beaming: “I am Evelyn Y. Davis.”