2012 Proxy Season Political Spending Shareholder Resolutions

Bruce F. Freed is president and a founder of the Center for Political Accountability. Work from the Program on Corporate Governance about corporate political spending includes Corporate Political Speech: Who Decides? by Lucian Bebchuk and Robert Jackson, discussed on the Forum here. A committee of law professors co-chaired by Bebchuk and Jackson submitted a rulemaking petition to the SEC concerning corporate political spending; that petition is discussed here.

Companies are once again being engaged on political sending, and preliminary results for this proxy season show strong, if not stronger, support. Coordinated by the Center for Political Accountability (CPA), the shareholder resolution focuses on disclosure of political spending from corporate funds, including payments to trade associations and 501c4 organizations; disclosure of management decision making policies; and board oversight of the spending. Through increased oversight and disclosure, shareholders proponents seek to more effectively manage and lessen the risks associated with corporate political spending especially in the post-Citizens United world. (See CPA’s website for a model resolution.)

Shareholders working with CPA have filed a total of 51 resolutions this year, 13 of which have already resulted in an agreement with the company. The New York State Pension Funds successfully engaged six companies: Safeway, Kroger, CSX Corp., Sempra Energy, R.R. Donnelley & Sons, and Reynolds American. Trillium Asset Management reached agreements with Halliburton, Chubb Corp, and State Street Corp.; individual shareholders affiliated with the Responsible Wealth Coalition successfully withdrew their resolutions with Hershey Co. and Aflac, Inc. after agreements. The Miami Firefighters worked successfully with Southwestern Energy Co., and the Nathan Cummings Foundation reached an agreement with Tenet Healthcare.

Several agreements have followed previous strong votes for political disclosure resolutions. Last year, almost 47 percent of shareholders supported the resolution at Halliburton, almost 49 percent at R.R. Donnelley, and more than 44 percent at State Street Corp.

Shareholder support for the resolution continues to grow. At the time of this blog post, the resolution has gone to vote at 26 companies, including an almost 53% majority shareholder support for political spending disclosure at Wellcare. Almost half of voting shareholders supported the resolution at Coventry Health Care and Anadarko Petroleum, respectively, in addition to more than 40% support reported at Windstream Corp and CVS Caremark Corp. In cases where the resolution was a re-submission this year, the voting trends generally indicated a slight increase in overall shareholder support. The following companies have reported vote results to date.

VOTING TRENDS FOR POLITICAL SPENDING RESOLUTIONS 2011-2012

Company Proponent Ticker 2012 Vote% 2011 Vote%
Wellcare Amalgamated Bank and New York City Pension Funds (co-filer) WCG 52.7% 42.5%
Coventry Health Care Inc. New York City Pension Funds & Amalgamated Bank (co-filer) CVH 48.6% 44.3%
Anadarko Petroleum Corp New York State Pension Funds APC 46.6% 38.1%
Windstream Corp Communication Workers of America WIN 43.3%* 42.0%
CVS Caremark Corp. Green Century Capital Management CVS 40.9% 39.1%
Lorillard Inc. New York State Pension Funds LO 39.2% 45.8%
AT&T Inc. Domini Social Investment T 38.6% 31.0%
Regions Financial New York City Pension Funds RF 38.2% 27.9%
CenturyLink Inc. Trillium Investments CTL 37.0%* 34.8%
Valero Energy Corp Nathan Cummings Foundation VLO 35.9% 35.7%
Mylan Inc. Nathan Cummings Foundation MYL 34.8%
National Oilwell Varco Nathan Cummings Foundation NOV 33.9% 35.2%
Travelers Cos Inc. New York State Pension Funds TRV 30.0%
Boeing Co Newground Social Investment BA 29.4% 22.1%
Honeywell Intl Inc. Responsible Wealth HON 29.1%
DTE Energy Co New York City Pension Funds DTE 28.7% 27.5%
Amazon.com Inc. Newground Social Investment AMZN 25.1% NA
Schwab, Charles Corp New York City Pension Funds SCHW 23.5% 31.0%
Sprint Nextel Corp New York City Pension Funds S 21.0% 53.4%
Republic Services Inc. New York State Pension Funds RSG 16.7%
WellPoint Harrington Investments WLP 16.0%
Sunrise Senior Living Harrington Investments SRZ 12.9%
Allstate Corp Firefighters Union Fund ALL 11.6% 37.0%
AutoNation Inc. New York State Pension Funds AN 11.4%
JP Morgan Chase & Co Domini Social Investment JPM 10.6% 37.4%
Aetna Service Employees International Union Master Trust AET 10.0%

*Result as announced at the AGM.

In addition to the above, five more resolutions are either awaiting vote results or still pending at companies. Shareholders are still awaiting vote results from Lowe’s Cos Inc. and Express Scripts Inc. (Miami Firefighters); Nike Inc. (North Carolina pension funds and Newground Social Investment); Caterpillar (New York State pension funds); and FedEx (New York City pension funds).

In April, CPA announced that political disclosure hit the 100 company mark, an important milestone on the road to making the practice a corporate governance standard. That list included 94 companies in the S&P 500, with 80 companies that have agreed to disclose information on payments to trade associations.

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One Comment

  1. Posted Friday, June 1, 2012 at 11:13 am | Permalink

    Thank you Bruce! Please keep plugging on this important issue.

2 Trackbacks

  1. By PointOfLaw Forum on Thursday, June 28, 2012 at 3:46 pm

    On that other Supreme Court decision this week (concerning corporate political speech)…

    James R. Copland While everyone has understandably been focused on the Supreme Court’s decision on the constitutionality of the 2010 Patient Protection and Affordable Care Act, as well as its decision overturning in part and upholding in part Arizona…

  2. By Citizens United: Are Shareholder Revolts in the Offing? - Forbes on Thursday, October 18, 2012 at 7:32 am

    […] for Political Accountability itself as a barometer of the activist sea change. According to its own reports, shareholders working with CPA have filed a total of 51 resolutions in 2012. Of those, 13 led to […]

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