Posts tagged with: Shareholder resolution

Readers following my series of blog posts on shareholder proxy resolutions submitted by religious groups such as As You Sow and the Interfaith Council of Corporate Responsibility already know these resolutions have little to do with issues of faith. In fact, an overwhelming majority of these resolutions concern corporate speech and attempts to stifle it.

Your shareholders want to know more about your political spending. Really.

Your shareholders want to know more about your political spending. Really.

AYS and ICCR – as well as a host of other religious shareholders – submit proposals drafted by Bruce Freed, head of the Center for Political Accountability. Freed’s CPA and the Wharton Business School’s Zicklin Center, readers will recall, issued its annual index late last month. My last post detailed in part the wrongheadedness of shareholders pushing a political agenda at the expense of their fellow shareholders. However, I anticipate most readers require a bit more than your lowly scribe’s word that the CPA-Zicklin Index not only inflates the results of its shareholder resolutions but as well operates on behalf of groups more interested in shutting down corporate political speech.

The Center for Competitive Politics, a First Amendment nonprofit think tank located in Alexandria, Va., brings more firepower to arguments I’ve already made regarding the efforts of CPA and the proxy shareholders for whom Mr. Freed drafts resolutions. Regarding the CPA-Zicklin Index, CCP issued a statement by CCP Chairman Brad Smith, former Federal Election Commission Chairman:

To look at the CPA-Zicklin Index as a measure of ‘best corporate practices’ is like asking a wolf to describe ‘best practices’ for sheep … Corporations have an obligation to do what is in the best interest of their shareholders, not comply with the demands of a non- profit that opposes speech by the business community. (more…)

The 2013 “CPA-Zicklin Index of Corporate Policy Accountability and Disclosure” was issued Tuesday by the allegedly “nonpartisan” Center for Corporate Political Accountability – the “CPA” of the report’s title lest readers mistakenly read it as the objective analysis of a certified public accountant. The CPA referenced here is the organization operated by Bruce Freed, which shepherds proxy shareholder resolutions by left leaning “religious” shareholder activist groups as As You Sow and the Interfaith Council on Corporate Responsibility.

I haven’t taken the time for a deep-dive analysis of the report, but will do so most assuredly in the next few days. However, an initial reading of the Index’s Executive Summary must suffice for the moment. In short … poppycock. And piffle. Even preposterous.

Allow me to set the record straight. Ten years ago, CPA “began engaging corporations to voluntarily provide disclosure and oversight of political spending,” asserts Mr. Freed – if by “voluntarily” Mr. Freed means mounting a campaign of deceit against corporate political spending employing all means necessary to embarrass or otherwise shame companies to bend to the will of leftist, post-Citizens United, “corporations/bad. unions/good” ideology.

Mr. Freed and the faith-based shareholders for whom he writes proxy resolutions remain in a tizzy regarding those companies that spend lobbying or other political cash on causes and campaigns with which the left disapproves. In an environment of growing Leviathan and concomitant increase in regulatory restrictions emanating from government agencies, companies have little choice to ensure their own and employees’ survival as well as the profitability of shareholders than to engage in the political process. Indeed, to voluntarily withdraw from these policy debates would be nothing less than reckless disregard for political reality today.

So let’s break this down further: Unions spend members’ dues on political causes that tilt left whereas corporations spend company proceeds on causes that tilt right. Union spending rarely is called into question as it’s a given they’ll spend it on liberal candidates and agendas. Woe be unto those corporations, however, which endeavor to engage politically – even  privately – in the interest of their companies, employees, customers and shareholders. (more…)

Shareholders’ boardroom clout increases” touts the website at the Interfaith Council on Corporate Responsibility The linked article takes readers to an August 20 essay by Sara Murphy at The Motley Fool in which the author asserts: “New research out today from the Sustainable Investments Institute, or Si2, shows that investors are filing more environmentally and socially themed shareholder resolutions now than ever before, and those resolutions are getting more support during proxy voting than they ever have.”

Not so fast, Ms. Murphy. This week another story unfolded, courtesy of The Manhattan Institute Center for Legal Policy. MI’s third annual Proxy Monitor, authored by James R. Copland and Margaret M. O’Keefe, counters the ICCR and Murphy narrative significantly. It appears the ICCR folk were distracted after reading the reports first finding:

The number of shareholder proposals introduced is up. The average Fortune 250 company faced 1.26 shareholder proposals on its 2013 proxy statement, up slightly from 1.22 proposals per company in 2012. This trend also holds when considering the 104 proposals excluded from proxy ballots after companies received a letter from the Securities and Exchange Commission assuring them that the agency would take no action against the company due to the proposal’s procedural or substantive defects.

So distracted by the presumed good news, in fact, they neglected to read the subsequent findings:

Support for shareholder proposals is down. Only 7 percent of shareholder proposals received the backing of a majority of shareholders in 2013, down from 9 percent in 2012. A smaller percentage of shareholder proposals passed in 2013 than in any other year in the 2006–13 period. Among the 20 proposals receiving majority support, 13 involved just two issues: whether to elect all corporate directors annually and whether each director should be required to receive a majority of votes cast to be elected.

And this: (more…)

The Aug. 26 edition of the Wall Street Journal features a compelling opinion piece by Susan Combs, the Texas comptroller of public accounts. Ms. Combs correctly assesses the inherent responsibility of public pension funds to the businesses in which they hold shares. Namely, they should ensure company profitability rather than push agendas that may harm market share and growth.

Just so. Writes Combs: “Not long ago, people who used their few shares to push a point at shareholder meetings may have been marginalized as oddballs. Today, hedge funds and other major players are using their clout to lobby for – and get – big changes in corporate governance.”

Whatever this activism has to do with the ethical obligations of shareholders to one another is beyond the comprehension of Combs and, frankly, your writer. Such has been one theme of my repeated cavils related to the so-called religious-based shareholder activists who submit proxy resolutions year after year related to overturning Citizens United, limiting the depiction of tobacco use in film and television, curtailing hydraulic fracturing and taking expensive measures to avert global warming.

One may agree or disagree with the activists’ point-of-view on any of these given topics, but as Combs notes:

Putting public funds in the activist arena in this way strikes me as seriously bad policy. As the comptroller of public accounts for the state of Texas, I have to manage billions of dollars in taxpayer money, and I have a fiduciary obligation to achieve the very best returns possible. This is a rock-bottom, non-negotiable duty that goes with the office. Our “shareholders” are the tax-paying public.

The same holds for private investments made on behalf of clergy, nuns, and other religious. Many investment opportunities exist for companies more than willing to comply with ill-founded science, questionable public policy, and social progressivism. (more…)

When it comes to political contributions it seems those who lean left-of-center cannot abide competition, which – in large part – explains the hue and cry from the left since the U.S. Supreme Court Citizens United ruling. It’s all well and fine when unions, for example, or certain Hollywood hotshots flip a few million to the progressive cause or candidate du jour, but when a corporation wishes to defend the interests of its employees, shareholders and communities it’s the basis for handwringing, rending of garments and a flurry of public pronouncements that SCOTUS got it Just. So. Wrong.

Into this environment has been introduced a certain element that to less discerning eyes is of a spiritual nature – but is nothing more than progressive ideology cloaked in chasubles and habits – in the form of clergy, nuns and various religious submitting proxy shareholder resolutions. A case in point would be the recent announcement that a lobbying-disclosure  resolution filed by the Province of St. Joseph of the Capuchin Order (members in good standing of the Interfaith Center on Corporate Responsibility, naturally) directed at Alliant Techsystems passed on July 31.

In a press statement, Fr. Michael Crosby, ICCR board director and lead filer of the resolution, noted:

Our province of Capuchin Franciscans has been very concerned for over a decade with some of the businesses of Alliant Tech, particularly land mines, as this is a weapon that continues to kill and maim innocent people around the world. This concern is only exacerbated when the company moves into guns and then lobbies heavily to thwart legislation that would regulate their use….

As ATK [Alliant] shareholders we have maintained that we have a right to know how lobbying funds are being deployed to determine whether these activities are in alignment with our company’s stated mission and values. Today, our fellow shareholders made it clear that they are in agreement.

In other words, Fr. Crosby was able to convince 65 percent of shareholder voters to support lobbying disclosure by Alliant, which spent nearly $3 million on lobbying efforts between 2011 and 2012. Alliant additionally has been a member of the National Shooting Sports Foundation, which has spent $1.6 million in lobbying efforts since 2011. Much of the latter’s lobbying focuses on opposition to legislation demanding additional background checks, magazine limits and bans on assault weapons. (more…)

Bruce Edward Walker recently wrote a commentary for The Tampa Tribune entitled, Shutting Down Corporate Speech in the Name of Social Justice. He says that:

Corporate boardrooms are being caught up in a new wave of religious fervor sparked by clergy and members of religious orders in search of social justice. Alas, this movement is only superficially about the spirit. In truth, corporate directors and company executives are facing a very worldly missionary effort by priests, pastors, nuns and laypersons armed with proxy shareholder resolutions that advance politically liberal dogmas, including attempts to undermine the Supreme Court’s Citizens United ruling.

Enlisting members of the religious community to this movement is simply disguising “leftist ideology in church vestments.”

The nuns and friars submitting the proxy resolutions are members of the New York City-based Interfaith Center on Corporate Responsibility, which, for the past 41 years, has established itself as “the pioneer coalition of active shareowners who view the management of their investments as a catalyst to promote justice and sustainability in the world.” The ICCR’s view of “justice and sustainability,” however, seems less grounded in Christian doctrine than talking points from MSNBC.

These resolutions, not surprisingly, list the amount of money spent by each company on “direct federal lobbying” using figures taken from Senate reports. What seems to upset the religious activists, or actually ICCR, is the lack of disclosure of “lobbying expenditures to influence legislation in states,” including “trade association payments” and “membership in tax-exempt organizations that write and endorse model legislation, such as the American Legislative Exchange Council.” (more…)

There has been ample evidence presented in the past several years to suggest shareholder activism exhibited via proxy resolutions not only wastes time but, as well, corporate funds. And yet, unions and “social justice” advocates such as the Interfaith Center on Corporate Responsibility and As You Sow perpetuate the practice to the detriment of targeted companies.

And, according to a recently released study, this activism also works to the shareholders’ detriment as well. In effect, these proxy resolutions shoot the shareholder perpetrators in their own collective foot by reducing the profitability of the companies in which they hold stock – while simultaneously wounding other shareholders who don’t necessarily share the whole leftist/liberal magilla against hydraulic fracturing, free political speech and genetically modified organisms while advocating for network neutrality.

“Analysis of the Wealth Effects of Shareholder Proposals – Volume III” was released by the U.S. Chamber of Commerce’s Workforce Freedom Initiative on May 2. The study was conducted by Navigant Consulting’s Allan T. Ingraham, Ph.D., and Anna Koyfman, whose analysis of proxy resolutions by shareholder activists concludes:

[T]here is no conclusive evidence of measurable improvements in (short-term or long-term) stock market or (long-term) operating performance in target companies as a result of shareholder proposals. Therefore, we find no evidence that shareholder activism has a positive impact either on firms or on the entities offering shareholder resolutions. (more…)

As keystroke was committed to screen in the writing of this post, J.C. Penney honcho Ron Johnson received his walking papers. This after it was announced last week that the ousted CEO had his pay cut 90 percent– tanking his 2012 salary to a mere $1.9 million from a sum north of $50 million in 2011.

With numbers like that, Johnson more than likely won’t apply for unemployment benefits anytime soon. But his compensation unfortunately will add more fuel to the fire of those proxy shareholders advocating for “say on pay” rules for upper management.

For example, The Nathan Cummings Foundation submitted a proxy shareholder resolution to Caterpillar Inc. that reads: “The shareholders … ask the board of directors to adopt a policy that incentive compensation for senior executives should include a range of non-financial measures based on sustainability principles and reducing any negative environmental impacts related to Company operations.”

According to its website, NCF “is rooted in the Jewish tradition and committed to democratic values and social justice, including fairness, diversity, and community. We seek to build a socially and economically just society that values nature and protects the ecological balance for future generations; promotes humane health care; and fosters arts and culture that enriches communities.” (more…)