Shareholder Advocacy for the 2022 Proxy Season

 

Amazon (AMZN) – On Shareholder Ballot

For our fourth year, we introduced a shareholder resolution at Amazon addressing the dangers that their facial recognition technology, Rekognition, poses to people across the globe. Our proposal mentions other tech companies which have also come under scrutiny for similar surveillance technology, including the $550 million settlement at Facebook awarded to the state of Illinois regarding nonconsensual use of facial recognition on its residents, and Microsoft banning sales of their facial recognition tech to police until there is federal regulation on the software. The boost in shareholder support for the proposal in 2021 verifies that shareholders and the public alike are taking notice, and concern about the risks of Rekognition, and the movement opposing government surveillance, is mounting. We are pleased to have support from our colleagues at CommonSpirit Health and Mercy Investment Services as co-filers on this resolution.

Amazon did not respond to engage in dialogue with us regarding the resolution, however our proposal appeared in the 2022 company proxy material.

  • Amazon’s Annual Meeting of Shareholders – May 25th, 2022, at 9:00am PT.
  • The proposal received 40.69% support from shareholders.

Anthem Blue Cross and Blue Shield (ANTM) – On Shareholder Ballot

The healthcare giant was called out recently for being one of the corporations that made donations to politicians who voted for the “heart rate bill” or abortion ban, in Texas, and contributed to the politicians who opposed the Electoral College count after the January 6th insurrection. These political donations are unethical, and highly inconsistent with the company’s purpose and so-called “values”. Our proposal requests that the Board of Directors adopt a policy prohibiting political contributions.

Anthem has confirmed receipt of our resolution, sent us a copy of their opposition statement, and verified that the company will include the proposal in the 2022 proxy material.

  • Anthem’s Annual Meeting of Shareholders – May 18th, 2022, at 5:30am PT.
  • The proposal received 4% support from shareholders.

Bank of Montreal (BMO) – On Shareholder Ballot

2022 is the third year we have filed a shareholder proposal at BMO on climate change and carbon lending, requesting that the company adopt a policy to not contribute to new fossil fuel supplies that would be inconsistent with the IEA’s Net Zero Emissions by 2050 target, citing their vast exposure to the fossil fuel industry. 

We have had several discussions with the corporate secretary and other staff at BMO to discuss our resolution. Our proposal appears in the company’s 2022 proxy circular. The proposal received approximately 7% support from shareholders. John Harrington presented at the shareholders’ meeting. You can read his statement here.

  • Bank of Montreal’s Annual Meeting of Shareholders – April 13th, 2022, at 6:30am PT.
  • The proposal received 7% support from shareholders.

 

Citigroup (C) – On Shareholder Ballot

We continue to press financial institutions to take action to address climate change, and Citigroup is one bank that has a long history of financing the fossil fuel industry. Our resolution this year is similar to the one introduced at Bank of Montreal, asking for the bank to commit to a policy where they would no longer contribute to new fossil fuel financing, be it through loans, underwriting, or otherwise. Despite making a “Net-Zero by 2050” pledge, it was discovered in late 2021 that Citigroup placed a new USD bond offering for JSC SUEK, Russia’s largest coal producer and coal plant operator. We are pleased to have support from our colleagues at Boston Common Asset Management as co-filers on this proposal.

Citigroup has responded in the form of a “No-Action Request” (NAR), stating they intend to omit the proposal from their proxy material claiming that the resolution is “vague and indefinite” and it deals with “ordinary business. Our attorney has responded to the challenge. We are currently awaiting the SEC to make their ruling on whether the resolution will be omitted from the bank’s proxy material. Citi has provided us with their opposition statement to our proposal. The SEC ruled in favor of HII, and our resolution appeared in the Citigroup proxy statement for 2022.

The exempt solicitation for Citigroup can be accessed here.

  • Citigroup’s Annual Meeting of Shareholders – April 26th, 2022, at 6:30am PT.
  • The proposal received 12.8% support from shareholders.

 

Coca-Cola (KO) – On Shareholder Ballot

After focusing on sugar and public health in the previous 2 years, we decided to address the lack of disclosure surrounding KO’s corporate funds spent to influence public policy around the world. This “Global Transparency Report” is one of 3 resolutions we have introduced at major food and beverage companies this year, including McDonald’s and PepsiCo, requesting an annual report disclosing international corporate funding including political contributions, charitable donations, and lobbying. KO is literally the largest beverage company in the world, operating in and selling products in roughly 200 countries, yet the company fails to be transparent about all their financing to influence public policy, internationally. The food and beverage industry has been notorious for spending large amounts of money to shape policymaking and regulations across the world – a notable example is KO’s financial support for the global industry lobby group International Life Sciences Institute which produced research that negatively impacted public health policy in places such as India, Mexico, China, and Brazil. Once again, we have been fortunate to have the help from our colleagues at Corporate Accountability in drafting the resolution, and they will be participating in any engagement we might have with the company. Some public information exists related to KO’s political donations in the U.S., however, the disclosure from the company is limited, and the money the corporation spends in foreign countries is virtually unknown.

Though Coca-Cola acknowledged receipt of our proposal, we did not have any engagement with the company. We received KO’s opposition statement, and the proposal appeared in the company’s 2022 proxy material.

The exempt solicitation for Coca-Cola can be accessed here.

  • Coca-Cola’s Annual Meeting of Shareholders – April 26th, 2022, at 5:30am PT.
  • The proposal received 13% support from shareholders.

 

Facebook/Meta Platforms (FB) – On Shareholder Ballot

The social media platform has come under scrutiny in recent years for numerous controversies, and HII is trying to hold the company accountable through a shareholder proposal requesting a review of their Audit Committee. The resolution entails an independent assessment of FB’s Audit and Risk Oversight Committee. Allegations that the company defies pledges to remove harmful content including animal cruelty, misinformation about coronavirus and the 2020 election, and advertisements for alcohol and weight loss drugs targeted to minors are cause for concern regarding the company’s lack of risk oversight. Our colleagues at the Campaign for Accountability drafted this proposal, and we are delight to have their support and involvement. We are pleased to have the Park Foundation and SumOfUs as co-filers on this resolution.

Other than one conversation with FB and a representative from the Campaign for Accountability in January, we have had no further engagement with the company. The proposal appeared in the Meta Platforms proxy materials for 2022.

The exempt solicitation for Meta Platforms can be accessed here.

  • Meta Platform’s Annual Meeting of Shareholders – May 25th, 2022, at 10:00am PT.
  • The proposal received 10.47% support from shareholders.

 

Goldman Sachs (GS)

Our proposal for the 2022 proxy season at GS asks the company to commission a study on the external costs created by the company’s underwriting multi-class equity offerings and how these costs affect the majority of its shareholders who rely on overall stock market returns. We are grateful to have our colleagues at the Shareholder Commons draft the resolution, and lead engagement on this subject with GS.

The Shareholder Commons and HII have had a discussion with GS and the company does not agree with the request of the proposal. GS has also issued a No-Action Request (NAR) stating that the proposal does not cover a “significant policy issue” and that it deals with the company’s “ordinary business” and is seeking to exclude the resolution from their proxy material. The Shareholder Commons has responded to the challenge on our behalf, and we are currently waiting for the SEC to decide if the proposal can be excluded from the GS proxy material for 2022. The Shareholder Commons responded to the challenge on our behalf, but we were dismayed to learn that the SEC allowed GS to exclude our proposal from the GS proxy material for 2022.

  • Goldman Sach’s Annual Meeting of Shareholders – April 28th, 2022, at 5:30am PT.

 

Johnson & Johnson (JNJ) – On Shareholder Ballot

As we are all too aware, COVID-19 is a global pandemic, and vaccines are crucial to combating the virus. We have submitted a shareholder resolution that was drafted by our colleagues at the Shareholder Commons regarding the cost of the company’s limited sharing of their vaccine technology. The consequences of this limited sharing of vaccine technology include (but are not limited to) the reduction in vaccine availability, especially in poorer nations, thus a cost to the global economy since the failure to vaccinate the world’s vulnerable communities inhibits worldwide recovery and creates the potential for more dangerous variants of the virus to develop.

JNJ responded to our proposal with a No-Action Request (NAR) claiming the resolution deals with “ordinary business” and is “duplicative” of another proposal submitted, in an attempt to seek permission from the SEC to exclude the proposal. The Shareholder Commons responded to their challenge, and the SEC announced that they do not believe the proposal can be omitted under Rule 14a-8. HII and the Shareholder Commons had a call with JNJ about the proposal in mid-February. We were pleased to see the resolution on the company ballot and in the proxy material for 2022. Sara Murphy from the Shareholder Commons acted as our proxy and representative for the shareholders’ meeting. 

The exempt solicitation for Johnson & Johnson can be accessed here.

  • Johnson & Johnson’s Annual Meeting of Shareholders – April 28th, 2022, at 7:00am PT.
  • The proposal received 8.6% support from shareholders.

 

JPMorgan Chase & Co. (JPM) – On Shareholder Ballot

A proposal we jointly filed with Mercy Investment Services (“Mercy”) at JPM is much like other proposals at banks this year that request the company to address the issue of climate change. We ask that JPM adopt a policy to take action to ensure that their financing does not contribute to new fossil fuel supplies inconsistent with the IEA’s Net Zero by 2050 scenario. We are excited to have approximately 21 co-filers on this proposal and have had several calls with JPM and colleagues to identify why the company believes that they are doing an adequate job to mitigate the impact that their financing has on climate change. We disagree that they are taking sufficient action and would like for shareholders to have the opportunity to vote on this resolution. 

We received a “No-Action Request” (NAR) from JPM which states that they are seeking approval from the SEC to omit the proposal from JPM 2022 proxy material on the grounds that the content of our proposal “deals with the Company’s ordinary business operations” and “seeks to micromanage the Company”. Our attorney responded to the challenge, and we learned that the SEC did not agree that the proposal could be omitted from the Citi proxy material.

The exempt solicitation for JPMorgan Chase can be accessed here.

  • JPMorgan Chase’s Annual Meeting of Shareholders – May 17th, 2022, at 7:00am PT.
  • The proposal received 9.9% support from shareholders.

 

Kroger (KR)

Our colleagues at Mercy Investment Services (“Mercy”) submitted a shareholder proposal at KR on the use of pesticides in their agricultural supply chain. The company has achieved the goal to eliminate the sourcing of outdoor live plants for their stores and garden centers that have been treated with pesticides containing neonicotinoids and stated that promoting responsible pesticide, fertilizer, and soil-management practices as a material issue, however the company has not disclosed if or how it tracks, reports, or reduces pesticides in their agricultural supply chain. HII supports the efforts on pesticide reduction and disclosure at KR and has co-filed with Mercy on this proposal.

Though Mercy is the lead filer and will negotiate on our behalf, HII participated in a conference with the company alongside Mercy and other co-filers in early February. After engagement, Mercy has decided to withdraw the proposal based on discussions with the company.

  • Kroger’s Annual Meeting of Shareholders – June 23rd, 2022 @ 8:00am PT.

 

McDonald’s (MCD) – On Shareholder Ballot

A truly international corporation, MCD products can be found all over the world. As we have done with Coca-Cola and PepsiCo, HII is requesting that the fast-food giant disclose the funds they spend to influence public policy internationally. Shareholders and stakeholders should be privy to where and why the corporation’s money is spent, locally, nationally, and internationally. Corporate Accountability has drafted our resolution and will participate in any engagement with the company.

We received a response from MCD confirming their receipt of the proposal we submitted but have not received any further correspondence agreeing to engage with us about our resolution. Our proposal appeared in the company’s proxy material for 2022.

  • McDonald’s Annual Meeting of Shareholders – May 26th, 2022, at 7:00am PT.
  • The proposal received 12.6% support from shareholders.

Microsoft (MSFT) – On Shareholder Ballot

HoloLens is an augmented reality headset for military training and/or combat purposes, developed by Microsoft. This summer HII filed a resolution at the company requesting a report on the reputational and financial risks for being identified as a company involved in the development of military weapons, referring to the HoloLens technology. Employees pushed back in a letter to Microsoft denouncing the use of this tech which was not created or designed to be use as tool for combat training or in warfare. Microsoft will be including the proposal in their proxy material and allow investors an opportunity to vote on the matter. John Harrington will be presenting the proposal at the shareholders meeting.

  • Microsoft’s Annual Meeting of Shareholders – December 13th, at 8:30am PT.
  • The proposal received 10.52% support from shareholders – click here to read John’s statement at the meeting: “An Ode to a False Technology”.

PepsiCo (PEP) – On Shareholder Ballot

Our third proposal requesting a Global Transparency Report is directed at PEP – another beverage giant that dominates the market. PEP’s financing of a trade association, ConMexico, which lobbied the Mexican government to postpone food labeling regulations, generating widespread criticism due to negative impacts on public health. This is but one example of the corporate spending (made public) that has proven to have detrimental impacts on communities and public health, and PEP (like Coca-Cola and McDonald’s) operates all over the world. We are requesting disclosure of the funds spent internationally that impact policymaking in all countries in which they operate and sell products. Our long-time colleagues at Corporate Accountability drafted the proposal and will participate in our engagement with the company.

PEP has challenged our proposal at the SEC with a No-Action Request (NAR) alleging that the resolution “consists of multiple proposals” and are seeking to exclude it. Our attorney responded to the challenge. Since then, PEP has issued additional supplemental letters to their NAR to continue to argue their belief that the proposal should be omitted, and our attorney has responded to these letters. We had a conference call in mid-January to discuss the proposal with individuals at PEP corporate governance, joined by our colleagues at Corporate Accountability. We were pleased to discover that the SEC decided PEP could not exclude our proposal from the Company’s 2022 proxy material.

  • PepsiCo’s Annual Meeting of Shareholders – May 4th, 2022, at 6:00am PT.
  • The proposal received 18% support from shareholders.