Shareholder Resolutions in Review: Political Spending

Subodh Mishra is Global Head of Communications at Institutional Shareholder Services, Inc. This post is based on an ISS memorandum by Paul Hodgson, Senior Editor at ISS Corporate Solutions.

Shareholder resolutions filed in the 2022 proxy season included several different types of proposals focused on political spending by corporations, reflecting investor concerns that support of certain candidates and causes may be inconsistent with the stated values of the company.

In this series of snapshots, ISS Corporate Solutions examines the key corporate issues raised by this season’s shareholder resolutions. In this post, we look at resolutions focused in campaign contributions, including calls for greater disclosure. Voting results are based on filings by companies up to June 13, 2022.

More shareholder resolutions were filed in the 2022 proxy season than in the previous year, with 586 environmental and social proposals submitted at U.S. companies so far, compared with 561 in 2021. Though many have since been withdrawn, many have been or will be voted on. According to data from ISS Corporate Solutions, 569 shareholder resolutions on ESG issues have either been voted on or are pending in annual meetings through November this year.

Types of Resolutions

There were a number of different kinds of resolutions focused on political spending, all trying to get at slightly differing types of information:

  • Report on Political Contributions
  • Report on Congruency of Political Spending with Company Values and Priorities
  • Report on Global Public Policy and Political Influence
  • Report on Political Contributions and Expenditures
  • Issue Transparency Report on Global Public Policy and Political Influence

While many shareholders remain concerned about companies’ political spending, engagement efforts over the years have improved disclosures about contributions at many corporations, especially the larger ones. However, social and political unrest has put the spotlight on companies whose support of certain individual candidates may be at odds with public statements about issues such as racial justice, gun control, LGBTQ rights and election integrity. These concerns have raised the profile of political contributions and have given rise to resolutions about transparency and congruency of spending and a company’s stated values.

A typical congruency proposal might look at societal issues such as environmental sustainability; diversity, equity and inclusion; social justice; and economic empowerment of women. Such resolutions seek answers to why “politically focused expenditures appear to be misaligned with public statements on company values, views, and operational practices.” One resolution in particular questioned a company’s support for lawmakers who are working to limit access to reproductive healthcare, supporting legislation restricting public protest and backing laws that could potentially result in voter suppression, given the company’s clearly stated public support for gender equality, civil rights and voting rights.

Vote Results

Some 19 proposals were filed on political spending in this year’s proxy season, with 16 already coming to a vote. Two of those, (Dollar General Corporation and Twitter, Inc.) received majority support. Overall average support was 34.1%. While the highest level of support was over 50%, the lowest was 4.2% at DISH Network Corporation, a company that is majority owned by insiders.

Late 2021 Proxy Season Votes

To expand coverage of these issues, the series also looks at shareholder resolutions that were voted on from October through December last year, as several large companies hold annual meetings during this period and are often excluded from analyses.

Two votes on lobbying resolutions took place during this period, at Nike and Oracle. The vote in favor of the proposal at Nike was over 30%. At Oracle, a company with very high insider ownership (CEO Lawrence Ellison owns more than 40% of the outstanding stock) support for the resolution was just over 5%.

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