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Proxy Monitor 2020: Proxy Season in a Pandemic

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Proxy Monitor 2020: Proxy Season in a Pandemic

April 21, 2020
Legal ReformCorporate Governance

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:

America’s largest corporations are entering the annual “proxy season”—the period of time between mid-April and mid-June when most large publicly traded companies hold annual meetings. Most shareholder voting at modern annual meetings has long been done not in person by physical attendance but “by proxy”—hence the common nomenclature for the season, as well as for annual-meeting information disseminated under rules developed by the Securities and Exchange Commission (“proxy statements” and “proxy ballots”).

Although most shareholder voting is done by proxy, prior to this year, the overwhelming majority of companies held in-person annual meetings, to which all shareholders were invited to attend. In light of the Covid-19 pandemic, however, most companies are planning to hold virtual annual meetings in 2020, as permitted under the laws of Delaware (where most large companies are incorporated) and most other states. Other states with statutes prohibiting virtual annual meetings—including New York, New Jersey, and Georgia—have permitted them temporarily by executive order under governors’ emergency authority. A minority of companies are holding “hybrid” meetings, with an in-person board meeting but shareholder participation enabled through on-line access.

On March 13, the SEC issued staff guidance clarifying procedures for companies that had already mailed proxy statements but wished to switch to virtual-only meetings, or change annual-meeting dates, times, or locations.

Early Voting Results and Proxy Season Preview

As of now, 195 of the 250 largest American companies by revenues are scheduled to hold annual meetings by the end of May 2020. Information on these companies’ shareholder proposals, and links to their proxy statements, are available on the Manhattan Institute’s Proxy Monitor website and 2020 Scorecard.

Just over 10% of the 250 largest companies had already held annual meetings by the 15th of April. Ten of those 26 companies faced a total of 18 shareholder proposals, which are listed, along with voting results, below. No shareholder proposal received majority support at a large company in this early period. Only two received at least 40% shareholder support: a proposal sponsored by “corporate gadfly” investor John Chevedden, seeking to enable shareholder action by written consent at the engineering company AECOM (44.7% shareholder support); and a proposal sponsored by the social-activist nonprofit SumOfUs asking the board of Apple to prepare a report on freedom of expression and other human-rights concerns (40.6%).

Each of the 26 companies holding annual meetings prior to April 15 had shareholder advisory votes on executive compensation. Only Qualcomm failed to muster majority shareholder support—with only 17.9% of voting shareholders supporting the company’s compensation decisions. The proxy-advisory firm ISS and large institutional investors such as BlackRock disagreed with the board’s compensation approach, including the one-time grant of options to executives based on a settlement with Apple. Besides Qualcomm, only one of the early-meeting companies failed to garner at least 70% shareholder support for executive compensation: Disney (53.5%), which has faced significant public pressure on the company’s executive pay from heiress Abigail Disney, granddaughter of the company’s co-founder.

Now proxy season begins in earnest. Between April 15 and the end of the month, 50 of the 250 largest publicly traded companies will hold annual meetings; 30 of these companies face a total of 61 shareholder proposals. Eight companies face three or more shareholder proposals: Abbott Labs, AT&T, Bank of America, Boeing, Citigroup, IBM, Pfizer, and Wells Fargo.

To see the all vote results from the 2020 proxy season and learn more, visit Proxy Monitor.

Below is a recap of 2020 Annual Meeting voting result information filed with the SEC through April 15, 2020, for companies and proposals included within the ProxyMonitor database. Following the item number is a brief title of the proposal. Information within parentheses following the title identifies the proponent; where there is more than one proponent, only the lead proponent is named herein. Additional information is available on the ProxyMonitor.org website, please see below. We encourage you to visit the site to learn more.

Costco Wholesale Corporation (COST)


1/22/20 Annual Meeting
Abstentions are not included

Voting Results:
Item 5 – True Diversity Board Policy (Undisclosed proponent) – 1.44% Voting in Favor

 

Walgreens Boots Alliance, Inc. (WBA)


1/30/20 Annual Meeting
Abstentions are included

Voting Results:
Item 4 – Independent Board Chair (K. Steiner) – 38.02% Voting in Favor
Item 5 – Use a Deferral Period for Annual Bonus Payments (Int’l Bro. Teamsters) – withdrawn
Item 6 – Special Meetings - Reduce Ownership to 10% (J. Chevedden) – 38.98% Voting in Favor

 

Tyson Foods, Inc. (TSN)


2/6/20 Annual Meeting
Abstentions are not included

Voting Results:
Item 4 – Report on Deforestation (Undisclosed proponent) – withdrawn
Item 5 – Report on Lobbying (Undisclosed proponent) – 14.65% Voting in Favor
Item 6 – Report on Human Rights Due Diligence (American Baptist Home Mission & co-filers) -14.59% Voting in Favor
Item 7 – Adopt Share Retention Policy for Senior Executives (Undisclosed proponent) – 6.74% Voting in Favor

 

Apple Inc. (AAPL)


2/26/20 Annual Meeting
Abstentions are not included

Voting Results:
Item 4 – Proxy Access Amendments (Undisclosed proponent) – 31.12% Voting in Favor
Item 5 - Report on Feasibility of Sustainability Metrics in Exec. Comp. Measures (Zevin Asset Mgmt.) – 12.06% Voting in Favor
Item 6 - Report on Freedom of Expression & Access to Information Policies as Human Rights (SumofUs) – 40.64% Voting in Favor

 

Deere & Company (DE)


2/26/20 Annual Meeting
Abstentions are included

Voting Results:
Item 6 – True Diversity Board Policy (Undisclosed proponent) – 1.13% Voting in Favor

 

AmerisourceBergen Corporation (ABC)


3/5/20 Annual Meeting
Abstentions are included

Voting Results:
Item 4 - Right to Act by Written Consent (K. Steiner) – 34.59% Voting in Favor
Item 5 – Use a Deferral Period for Annual Bonus Payments (Int’l Bro. Teamsters & co-filers) – 33.94% Voting in Favor

 

AECOM (ACM)


3/10/20 Annual Meeting
Abstentions are included

Voting Results:
Item 5 - Right to Act by Written Consent (J. Chevedden) – 44.68% Voting in Favor

 

The Walt Disney Company (DIS)


3/11/20 Annual Meeting
Abstentions are included

Voting Results:
Item 5 – Report on Lobbying (Congregation of Sisters of St. Agnes & co-filers) – 33.42% Voting in Favor

 

Starbucks Corporation (SBUX)


3/18/20 Annual Meeting
Abstentions are not included

Voting Results:
Item 4 - EEO Policy Risk Report (The National Center for Public Policy Research) – 1.51% Voting in Favor

 

The Goodyear Tire & Rubber Co. (GT)


4/6/20 Annual Meeting
Abstentions are included for shareholder proposals, but not for Say on Pay

Voting Results:
Item 4 - Shareholder Vote on Bylaw and Charter Amendments (J. Chevedden) – 2.70% Voting in Favor

Visit the Proxy Monitor database

______________________

James R. Copland is a senior fellow and director of legal policy at the Manhattan Institute. Follow him on Twitter here.

Photo by hxdbzxy/iStock

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