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