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Proxy Monitor 2020: Voting Results are In: American Express, Eli Lilly, Goldman Sachs, and More

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Proxy Monitor 2020: Voting Results are In: American Express, Eli Lilly, Goldman Sachs, and More

May 12, 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:

Early May Proxy Voting Results

By Wednesday, May 6, 96 of the 250 largest publicly traded companies, tracked in the Manhattan Institute’s Proxy Monitor database, had held annual meetings in 2020’s unusual “virtual” proxy season. The meetings held during the period of this week’s proxy-voting update—between April 28 and May 6—constituted 41% of all annual meetings held to date. This shareholder-proposal voting update focuses on 21 of the 39 companies meeting during this period—excluding ten that filed voting results with the SEC in time to be considered in last week’s update, as well as eight companies meeting on May 5 or 6 that had not yet filed voting results in time for this report.

Among the 21 companies whose meetings are covered in this report, 15 companies faced a total of 27 shareholder proposals, led Eli Lilly with seven. American Express, Bristol-Myers Squibb, Centene, Dominion Energy, Goldman Sachs, and Marathon Petroleum also faced multiple shareholder proposals. Three shareholder proposals received majority voting support over board opposition:

A fourth shareholder proposal, at Marathon Petroleum received a majority shareholder support with board support. It sought to eliminate supermajority voting rules, and it was sponsored by John Chevedden. Overall to date in 2020, 12% of shareholder proposals have received majority shareholder support (10% over board opposition).

A Brief Look at Social Proposals

Some investors like to refer to “ESG” proposals—with the acronym standing for Environmental, Social, and Governance. I’ve always considered this a false aggregation. Shareholder proposals relating to corporate governance, whether useful or ill-considered, get at the core function of shareholder voting rights; they typically involve questions like how shareholder votes are tallied, how often director elections are held, and how shareholders can act outside of the annual meeting process. Issues of social or environmental concern are different; certainly, some of these issues might bear upon share value, but the relationship is often attenuated—and in any event, the issues involve questions of business operation and valuation, not governance. Executive compensation is an intermediate case. Although paying employees is a core business judgment, executive compensation directly relates to the agency costs faced by shareholders vis-à-vis management; and they can be interpreted, at least in theory, as a proxy for corporate governance.

Shareholder voting historically has borne out sorting shareholder proposals into corporate-governance, executive-compensation, and social-policy buckets. From 2006 through 2019, 40% of shareholder proposals coming to a vote in the Proxy Monitor database related to corporate-governance topics, 40% to social-policy topics, and 19% to executive-compensation topics (total is only 99% due to rounding). But the fraction of shareholder proposals winning shareholder majority support differed substantially: 21% of corporate-governance-related shareholder proposals received the support of a majority of voting shareholders, as compared to only 6% of executive-compensation-related proposals and only 0.9% of social-policy-related proposals. And four of the 17 social-policy proposals getting majority shareholder support over that timeframe were supported by the company’s board—meaning that from 2006 through 2019, only 13 shareholder proposals received majority support over board opposition (0.7% of all social-related shareholder proposals).

In this historical context, 2020 obviously is beginning to look different. Four of the 10 shareholder proposals to receive majority shareholder support to date in 2020 involve social or policy concerns: a 4/23 proposal at Johnson & Johnson that sought a board report on its opioid-related risks; a 4/27 proposal at Genuine Parts that asked the company to make various disclosures related to what the proposal calls “human-capital risks”; a 4/28 proposal at Centene asking the board to increase disclosures on corporate political spending; and a 5/6 proposal at Phillips 66 asking the board to produce a report on health risks from Gulf oil operations.

Because only 25 social-policy shareholder proposals have yet come to a vote, this represents a sizable increase: fully 16% of all shareholder proposals related to social or policy concerns have received majority shareholder support, more than an order of magnitude over the historical baseline. To be sure, it is still early in the proxy season: more than 74% of the social-policy-related shareholder proposals in the Proxy Monitor database have not yet seen a recorded vote. And recent years have seen some uptick in support for these proposals: 12 of the 13 social-related shareholder proposals receiving majority shareholder support over board opposition between 2006 and 2019 did so since 2016. Still, more shareholder proposals related to social, environmental, or other policy concerns have received majority support at Proxy Monitor companies to date in 2020 (4 proposals) than in all of 2019 (3 proposals). Larry Fink, the CEO of BlackRock, the world’s largest institutional asset manager, suggested increased support for sustainability and other social causes in 2020. Shareholder voting on social-policy issues deserves close attention as the remainder of the proxy season unfolds.

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

Centene Corporation (CNC)


4/28/20 Annual Meeting
Abstentions are not included

Voting Results:
Item 5 – Report on Political Spending (Friends Fiduciary Corp.) – 51.35% Voting in Favor
Item 6 - Simple Majority Voting (J. Chevedden) – 93.88% Voting in Favor (Mgmt. recommended vote Against

Huntsman Corporation (HUN)


4/29/20 Annual Meeting
Abstentions are included

Voting Results:
Item 4 – Right to Act by Written Consent (J. Chevedden) – 43.71% Voting in Favor

Marathon Petroleum Corporation (MPC)


4/29/20 Annual Meeting
Abstentions are not included for proposals 4 and 5; abstentions & broker non-votes are incl. on #6

Voting Results:
Item 5 – Simple Majority Voting (J. Chevedden)– 98.50% Voting in Favor (Mgmt. recommended vote For)
Item 6 -  Report on Incorporating Community Concerns into Executive Comp (Sundance Family Foundation) – 7.63% Voting in Favor

Capital One Financial Corporation (COF)


4/30/20 Annual Meeting
Abstentions are not included

Voting Results
Item 5 - Independent Board Chairman (J. Chevedden) – 33.00% Voting in Favor

The Goldman Sachs Group, Inc. (GS)


4/30/20 Annual Meeting
Abstentions are included

Voting Results:
Item 4 - Right to Act by Written Consent (J. Chevedden) – 41.36% Voting in Favor
Item 5 - Board Oversight on "Statement of the Purpose of a Corporation" (Harrington Investments) - 5.77% Voting in Favor

HCA Healthcare, Inc. (HCA)


5/1/20 Annual Meeting
Abstentions are included

Voting Results:
Item 6 – Right to Act by Written Consent (J. Chevedden) – 19.33% Voting in Favor

Leidos Holdings, Inc. (LDOS)


5/1/20 Annual Meeting
Abstentions are not included for Say on Pay, are incl. for shareholder prop.

Voting Results:
Item 6 – Proxy Access Amendments (K. Steiner) – 33.77% Voting in Favor

Berkshire Hathaway Inc. (BRK)


5/2/20 Annual Meeting
Abstentions are included

Voting Results:
Item 4 – Adopt Policy to Improve Board & CEO Diversity (NYC Pension Funds) – 12.25% Voting in Favor

Eli Lilly and Company (LLY)


5/4/20 Annual Meeting
Abstentions are not included

Voting Results:
Item 6 – Report on Lobbying (SEIU Pension Plans Master Trust) – 29.70% Voting in Favor
Item 7 - Report on Forced Swim Test (PETA) – 3.43% Voting in Favor
Item 8 - Independent Board Chair (Daughters of Charity) – 33.95% Voting in Favor
Item 9 - True Diversity Board Policy (The National Center for Public Policy Research) – 1.03% Voting in Favor
Item 10 - Feasibility Report on Incorporating Public Concern On Drug Prices into Exec Comp (Mercy Investment Services) – 24.47% Voting in Favor
Item 11- Implement a Bonus Deferral Policy (UAW Retiree Medical Benefits Trust) – 31.16% Voting in Favor
Item 12 - Disclose Exec Comp Clawbacks due to Misconduct (Trinity Health) – 35.10% Voting in

American Express Co. (AXP)


5/5/20 Annual Meeting
Abstentions are not included

Voting Results:
Item 5 - Right to Act by Written Consent (K. Steiner) – 35.79% Voting in Favor
Item 6 – Report on Global Median Gender/Racial Pay Gap (Arjuna Capital) – 8.61% Voting in Favor

Bristol-Myers Squibb Company (BMY)


5/5/20 Annual Meeting
Abstentions are included

Voting Results:
Item 4 – Independent Board Chair (Sisters of St. Francis of Philadelphia)– 44.31% Voting in Favor
Item 5 - Right to Act by Written Consent (J. McRitchie) – 43.20% Voting in Favor

Danaher Corporation (DHR)


5/5/20 Annual Meeting
Abstentions are included

Voting Results:
Item 4 – Special Meetings - Reduce Required Ownership to 10% (Undisclosed proponent) – 40.74% Voting in Favor

Sempra Energy (SRE)


5/5/20 Annual Meeting
Abstentions are not included

Voting Results:
Item 4 - Independent Board Chair (J. Chevedden) – 38.28% Voting in Favor

Dominion Energy, Inc. (D)


5/6/20 Annual Meeting
Abstentions are not included

Voting Results:
Item 4 – Independent Board Chair (Majority Action) – 46.61% Voting in Favor
Item 5 - Right to Act by Written Consent (Undisclosed proponent) – 31.16% Voting in favor

Phillips 66 (PSX)


5/6/20 Annual Meeting
Abstentions are included

Voting Results:
Item 4 – Report on Health Risks of Gulf Coast Petrochemical Operations (As You Sow) – 53.90% Voting in Favor

Photo by SusanneB / iStock

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