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:
May Midpoint Proxy Voting Results
The unusual 2020 “virtual” proxy season for corporate America continues apace. By May 15, 109 of the 250 largest publicly traded companies, tracked in the Manhattan Institute’s Proxy Monitor database, had reported voting results from annual meetings. Among these, 21 more companies reported results since last week’s update. All but two of those companies faced at least one shareholder proposal, led by Verizon with five. Other companies facing multiple shareholder proposals included AbbVie (three), Baxter, Colgate-Palmolive, Duke Energy (four), Gilead Sciences, Marriott, and Pepsico.
In total, 32 shareholder proposals came to a vote. (One additional shareholder proposal, submitted to Kraft Heinz, was not presented at the meeting and did not come to a vote. It sought to eliminate rules requiring shareholder supermajority votes from the company bylaws.) Three shareholder proposals won the support of a majority of voting shareholders over board opposition:
- Baxter International (5/5) (55%): Seeking to Separate the Chairman and CEO Roles (Sponsor: Kenneth Steiner)
- Verizon Communications (5/7) (52%): Seeking Lower Shareholder Threshold to Call Special Meetings (Sponsor: Undisclosed)
- Marriott International (5/8) (65%): Seeking to Eliminate Supermajority Voting Rules (Sponsor: AFL-CIO Reserve Fund)
A fourth shareholder proposal, at Duke Energy, received a majority shareholder support (86%) without board opposition. It sought to eliminate supermajority voting rules, and it was sponsored by John Chevedden.
The proposal at Baxter, sponsored by Chevedden-group “corporate gadfly” Kenneth Steiner, was the second shareholder proposal seeking to split the chairman and CEO roles to win majority shareholder support in 2020, of 19 such proposals introduced. (The other was at Boeing, on April 27.) Baxter had faced a similar proposal in 2018 and 2019, which failed to win majority shareholder backing. It currently has a joint chairman and CEO, José E. Almeida, and an independent lead director, Thomas T. Stallkamp.
The proposal at Verizon sought to reduce the percentage of shareholders from 25% to 10%, and it received narrow (52%) shareholder support. It was the first shareholder proposal related to special-meeting rights to win majority shareholder backing in 2020, among ten such proposals introduced.
The proposal at Marriott was sponsored by the Reserve Fund for the AFL-CIO, a union long active in sponsoring shareholder proposals. The AFL-CIO is one of several private labor unions sponsoring multiple shareholder proposals in 2020 (along with the Service Employees International Unions (SEIU) Master Trust, the International Brotherhood of Teamsters, and the United Steelworkers). The AFL-CIO trust held 212 in Marriott shares—just over $20,000 on the company’s record date. The AFL-CIO’s proposal was the first shareholder proposal sponsored by a private labor union to win majority shareholder backing this year.
The AFL-CIO proposal was of a type broadly supported by most shareholders in non-binding shareholder proposals: seeking board action to eliminate shareholder supermajority voting provisions. Among seven such proposals coming to a vote in 2020, all seven received majority shareholder support. But such shareholder support will not necessarily translate into a change in corporate bylaws—which requires a shareholder vote under different rules, typically a supermajority of outstanding (as opposed to voting) shares. Marriott’s shareholders approved a similar shareholder proposal on the 2018 proxy ballot. The company responded by putting a binding item on the 2019 proxy statement, seeking shareholder approval for eliminating shareholder voting rules from the company certificate and bylaws. That binding proposal—requiring a two-thirds vote of all outstanding shares—failed.
Overall to date in 2020, 12% of shareholder proposals have received majority shareholder support (10% over board opposition).
Coming up this week are meetings of airline companies United (5/20) and Southwest (5/21), which each face multiple shareholder proposals. It will be interesting to see how shareholders consider these companies, which have been significantly compromised by the Covid pandemic.
JP Morgan Chase, meeting today, faces six shareholder proposals, the most of any company meeting this week. In addition, the bank faces an effort led by some socially oriented shareholder activists to oust from the board Lee Raymond, the bank’s independent lead director since 2001. The effort has been supported by New York City Comptroller Scott Stringer, who manages the City’s five mammoth public-employee pension funds. These activists oppose Raymond based on their concerns over climate change, given his role as former chairman and CEO of oil giant ExxonMobil. Even though climate-related shareholder proposals have been seeing increased support in recent years, it is hard to see an investment-based rationale for dumping JP Morgan’s independent lead director—especially an oil-industry expert, at a time when oil prices turned negative for the first time ever. We shall see.
To see the all vote results from the 2020 proxy season and learn more, visit Proxy Monitor.
Baxter International Inc. (BAX)
5/5/20 Annual Meeting
Abstentions are included
Voting Results:
Item 4 – Independent Board Chair (K. Steiner) – 54.87% Voting in Favor
Item 5 - Right to Act by Written Consent (J. Chevedden) – 38.39 % Voting in Favor
General Electric Company (GE)
5/5/20 Annual Meeting
Abstentions are not included
Voting Results:
Item 4 – Independent Board Chair (K. Steiner) – 25.98% Voting in Favor
Alcoa Corporation (AA)
5/6/20 Annual Meeting
Abstentions are included
Voting Results:
Item 4 - Right to Act by Written Consent (Undisclosed proponent) – 41.51% Voting in Favor
General Dynamics Corporation (GD)
5/6/20 Annual Meeting
Abstentions are included
Voting Results:
Item 4 – Special Meetings - Reduce Ownership Req. to 15% (J. Chevedden)– 40.14% Voting in Favor
Gilead Sciences, Inc. (GILD)
5/6/20 Annual Meeting
Abstentions are included
Voting Results:
Item 4 – Independent Board Chair (Friends Fiduciary Corp.& co-filers) – 43.39% Voting in Favor
Item 5 - Amend Right to Act by Written Consent (J. Chevedden) – 9.44 % Voting in Favor
PepsiCo, Inc. (PEP)
5/6/20 Annual Meeting
Abstentions are not included
Voting Results:
Item 4 – Special Meetings - Reduce Ownership Req. to 10% (K. Steiner) – 44.83% Voting in Favor
Item 5 - Report on Sugar and Public Health (J. Harrington) – 11.14% Voting in Favor
Duke Energy Corporation (DUK)
5/7/20 Annual Meeting
Abstentions are included
Voting Results:
Item 4 – Independent Board Chair (NYC Pension Funds) – 37.46% Voting in Favor
Item 5 – Simple Majority Vote (J. Chevedden) – 85.54% Voting in Favor (Mgmt took no position)
Item 6 – Report on Political Spending (NYS Common Ret. Fund) – 38.45% Voting in Favor
Item 7 – Report on Lobbying (Mercy Invest. Services & co-filers) – 42.00% Voting in Favor
Ecolab Inc. (ECL)
5/7/20 Annual Meeting
Abstentions are included
Voting Results:
Item 4 - Proxy Access Amendments (J. Chevedden) – 33.00% Voting in Favor
The Kraft Heinz Company (KHC)
5/7/20 Annual Meeting
Abstentions are not included
Voting Results
Item 5 – Simple Majority Vote (Undisclosed proponent) – Not presented at meeting, no vote reported
Verizon Communications Inc. (VZ)
5/7/20 Annual Meeting
Abstentions are not included
Voting Results:
Item 4 – Prohibit Paying Above-Market Returns on Nonqual. Exec. Savings Plans (Assoc of BellTell Retirees) – 31.06% Voting in Favor
Item 5 - Special Meetings - Reduce Ownership Req. to 10% (Undisclosed proponent) – 52.30% Voting in Favor
Item 6 – Report on Lobbying (Undisclosed proponent) – 46.99% Voting in Favor
Item 7 - Cyber Security and Data Privacy as Exec Comp Performance Measures (Trillium Asset Mgmt.) – 30.96% Voting in Favor
Item 8 - Shareholder Ratification of Golden Parachutes (J. and I. Cohen) – 43.46% Voting in favor
AbbVie Inc. (ABBV)
5/8/20 Annual Meeting
Abstentions are included
Voting Results:
Item 5 – Report on Lobbying (Zevin Asset Mgmt.) – 29.33% Voting in Favor
Item 6 – Independent Board Chair (Employees' Retirement System of Rhode Island & co-filer) – 27.54% Voting in Favor
Item 7 - Integrating Drug Pricing Risk into Exec. Comp. Policies (United Church Funds & co-filers) – 23.93% Voting in Favor
Colgate-Palmolive Company (CL)
5/8/20 Annual Meeting
Abstentions are included
Voting Results:
Item 4 - Independent Board Chairman (K. Steiner) – 45.80% Voting in Favor
Item 5 – Special Meetings - Reduce Required Ownership to 10% (J. Chevedden) – 45.07% Voting in Favor
Illinois Tool Works Inc. (ITW)
5/8/20 Annual Meeting
Abstentions are included
Voting Results:
Item 4 - Right to Act by Written Consent (J. Chevedden) – 35.21% Voting in Favor
Marriott International, Inc. (MAR)
5/8/20 Annual Meeting
Abstentions are included
Voting Results:
Item 4 – Simple Majority Vote (AFL-CIO Reserve Fund) – 65.48% Voting in Favor
Item 6 – Report on Diversity (Trillium Portfolio 21) – 29.04% Voting in Favor
International Paper Company (IP)
5/11/20 Annual Meeting
Abstentions are included and broker non-votes
Voting Results:
Item 4 – Special Meetings - Reduce Ownership Req. to 10% (Undisclosed proponent) – 28.18% Voting in Favor
Motorola Solutions, Inc. (MSI)
5/11/20 Annual Meeting
Abstentions are included
Voting Results:
Item 4 - Report on Political Spending (Newground Social Investment) – 45.97% Voting in Favor
3M Company (MMM)
5/12/20 Annual Meeting
Abstentions are included
Voting Results:
Item 4 – Consider Pay of All Co Employees in Setting CEO Comp Target Amounts (United Steelworkers)– 10.75% Voting in Favor
Loews Corporation (L)
5/12/20 Annual Meeting
Abstentions are not included
Voting Results:
Item 4 – Report on Political Spending (Undisclosed proponent) – 32.27% Voting in Favor
Prudential Financial, Inc. (PRU)
5/12/20 Annual Meeting
Abstentions are not included
Voting Results:
Item 4 – Independent Board Chair (J. Chevedden) – 47.35% Voting in Favor