Editor’s note: Data on shareholder votes for America's 250 largest public companies during the 2020 proxy season can be found on the publicly available (and fully sortable) Proxy Monitor database.
Analysis by James R. Copland:
Early Proxy-Season Voting Results
America’s largest corporations are now in the midst of the annual “proxy season”—when publicly traded companies hold annual meetings to vote on issues that include shareholder proposals, submitted on proxy statements under rules promulgated by the Securities and Exchange Commission (SEC). Most large publicly traded companies are holding virtual meetings this year, in light of the Covid-19 pandemic. But most are holding meetings: among the 250 largest American companies by revenues, tracked in the Manhattan Institute’s Proxy Monitor database, 204 have already filed proxy statements for upcoming meetings, with 195 scheduled to hold an annual meeting by the end of May 2020.
Among these, 23 companies held annual meetings between April 15 and April 23; and 13 of those faced shareholder votes on a total of 25 shareholder proposals—with Bank of America, Citigroup, and Pfizer each facing more than two proposals. The voting results for those 11 companies to have reported voting results to the SEC by April 24 are listed below.
In this time window, only one shareholder proposal won the support of a majority of voting shares—the first shareholder proposal to receive majority support to date in 2020 among the large-capitalization companies in the Proxy Monitor database. This proposal, at Stanley Black & Decker, sought to enable shareholders to act by written consent—a common subject among governance-related shareholder proposals in recent years. The proposal received the support of just more than 51% of voting shares (excluding abstentions, as provided in company bylaws).
All reporting companies meeting between April 15 and 23 got majority shareholder approval in advisory votes on executive compensation. One company, Jefferies Financial Group, received just under the 70%-support threshold (69.2%), which is deemed significant by the proxy advisory firm ISS.
2020 Shareholder-Proponent Analysis
The written-consent proposal receiving majority support at Stanley Black & Decker was sponsored by John Chevedden. A “corporate gadfly” investor heavily active in corporate governance—notwithstanding tiny investing stakes—Chevedden remains the most-frequent sponsor of shareholder proposals. Among the shareholder proposals with a known sponsor listed on the 195 Proxy Monitor companies scheduled to meet by the end of May, Chevedden has sponsored a staggering 31%. Chevedden regularly coordinates efforts with two other small gadfly investors that comprise the self-styled “Chevedden Group”: Kenneth Steiner and the husband-wife team of James McRitchie and Myra K. Young. Combined, the Chevedden Group investors have sponsored 48% of all 2020 shareholder proposals at large companies this year.
Beyond the Chevedden-allied gadflies, the sponsors of shareholder proposals to date are the “usual suspects”: socially oriented investors and labor-affiliated investors. Social investors have sponsored 32% of all shareholder proposals this year; 14% of proposals have been sponsored by social-investing funds focused on issues other than share value, and another 11% by investment vehicles held by religious institutions. Labor-affiliated funds have sponsored 13% of shareholder proposals, most prominently pension funds for New York City and State public employees, and investment funds managed by the International Brotherhood of Teamsters and United Steelworkers.
Shareholder-proposal sponsorship by other investors remains exceedingly rare. One investor, John Harrington, has sponsored four shareholder proposals individually as well as three through his social-investment fund Harrington Investments. Other individual investors have sponsored just 3% of all shareholder proposals. Only two shareholder proposals have been sponsored by institutions without a labor affiliation or social purpose. A fund managed by BNP Paribus Asset Management has sponsored a proposal at United Airlines (meeting May 20) asking the board to prepare a report on the company’s climate lobbying. Xerox sponsored a proposal at HP (meeting May 12) seeking to block bylaw amendments; this proposal was related to the company’s now-aborted hostile takeover bid and is expected to be withdrawn.
The SEC has proposed changes to its rules regarding shareholder ownership thresholds, holding periods, and resubmission thresholds, which may impact the strategies of the investors commonly engaging in shareholder-proposal activism. In February, I submitted comments to the SEC concerning these rules changes—applauding them, but arguing that they are likely to impair only marginally the ability of John Chevedden and his corporate-gadfly allies to play an outsized role over corporate governance.
To see the all vote results from the 2020 proxy season and learn more, visit Proxy Monitor.
The Bank of New York Mellon Corporation (BK)
4/15/20 Annual Meeting
Abstentions are not included
Voting Results:
Item 4 – Report on Pay Equity (Arjuna Capital) – 7.85% Voting in Favor
Item 5 – Let Shareholders Vote on Bylaw and Charter Amendments (K. Steiner) – 1.47% Voting in Favor
Stanley Black & Decker, Inc. (SWK)
4/17/20 Annual Meeting
Abstentions are not included
Voting Results:
Item 4 – Right to Act by Written Consent (J. Chevedden) – 51.02% Voting in Favor
PACCAR Inc. (PCAR)
4/21/20 Annual Meeting
Abstentions are included
Voting Results:
Item 4 – Right to Act by Written Consent (Undisclosed proponent) – 32.34% Voting in Favor
Citigroup Inc. (C)
4/21/20 Annual Meeting
Abstentions are included
Voting Results:
Item 5 – Proxy Access Amendments (J. Chevedden) – 37.00% Voting in Favor
Item 6 - Board to Determine Implementation of "Corporate Purpose" (Harrington Investments) – 6.91% Voting in Favor
Item 7 - Report on Lobbying (New Economy Project & co-filers) – 15.02% Voting in Favor
The Coca-Cola Company (KO)
4/22/20 Annual Meeting
Abstentions are not included
Voting Results
Item 4 – Report on Sugar and Public Health (J. Harrington) – 7.70% Voting in Favor
AutoNation, Inc. (AN)
4/22/20 Annual Meeting
Abstentions are included
Voting Results:
Item 4 - Special Meetings - Reduce Ownership Req. to 10% (J. Chevedden) – 36.68% Voting in Favor
Cigna Corp. (CI)
4/22/20 Annual Meeting
Abstentions are included
Voting Results:
Item 4 – Special Meetings – Reduce Ownership Req. to 10% (Undisclosed proponent) – 45.18% Voting in Favor
Item 5 - Report on Gender Pay Gap (Undisclosed proponent) – 20.81% Voting in Favor
Bank of America Corporation (BAC)
4/22/20 Annual Meeting
Abstentions are not included
Voting Results:
Item 4 – Proxy Access Amendments (J. Chevedden) – 26.53% Voting in Favor
Item 5 - Right to Act by Written Consent (K. Steiner) – 28.41% Voting in Favor
Item 6 - Gender/Racial Pay Equity (Arjuna Capital) – 9.77% Voting in Favor
Item 7 - Board to Determine Implementation of "Corporate Purpose" (J. Harrington) – 9.33% Voting in Favor
Edison International (EIX)
4/23/20 Annual Meeting
Abstentions and Broker Non-Votes are included
Voting Results:
Item 4 – Allow Shareholder Vote on Bylaw and Charter Amendments (J. Chevedden) – 1.64% Voting in Favor
Lockheed Martin Corporation (LMT)
4/23/20 Annual Meeting
Abstentions are not included
Voting Results:
Item 4 - Right to Act by Written Consent (J. Chevedden) – 47.68% Voting in Favor
Pfizer Inc. (PFE)
4/23/20 Annual Meeting
Abstentions are not included
Voting Results:
Item 4 - Right to Act by Written Consent (K. Steiner) – 15.85% Voting in Favor
Item 5 - Proxy Access Amendments (J. Chevedden) – 30.22% Voting in Favor
Item 6 - Report on Lobbying (Oxfam America, Inc.) – 20.58% Voting in Favor
Item 7 - Independent Board Chair (Sisters of St. Francis) – 34.00% Voting in Favor
Item 8 - Report on Gender Pay Gap (Proxy Impact) – 38.14% Voting in Favor