Labor campaigns often conjure images of street protests and picket lines. Sometimes, they spill over into a decidedly less combative venue: the annual shareholder meeting.
So-called activist shareholders have set forth roughly two dozen proposals calling on some of the country’s most profitable and powerful publicly traded corporations to make a slew of work-related reforms this year. They’re part of the growing batch of resolutions at corporations’ annual meetings that focus on environmental and social issues.
Activists had filed 370 such proposals by mid-February, according to the annual Proxy Preview report released by the shareholder advocacy organization As You Sow. That’s about on par with the 433 topical resolutions filed last year and the 417 filed in 2014. Of the bunch, an increasing number tackle hot-button labor issues like the gender pay gap, workplace diversity and the minimum wage debate.
The votes are nonbinding and usually fail. But with enough pressure and publicity, shareholder activists say the proposals can push companies to make changes they otherwise would not.
Sustainable wealth management firm Arjuna Capital has led the way on gender pay equity. The company submitted resolutions at seven tech companies asking them to set policies and goals to address gender-based salary disparities. Targets include Google, Facebook, eBay and Microsoft.
“I think the big question here is who’s going to be proactive and who’s going to be defensive.” said Natasha Lamb, director of equity research and a shareholder at Arjuna. “A proactive approach to gender equity is just good business.”
In fact, a few of the tech giants have already done just that, thanks to some nudging from Arjuna. Earlier this year, Apple and Intel both agreed to assess their respective gender pay gaps before announcing they had reached effective parity. Apple says it has reached 99.6 percent equal pay; Intel maintains it’s at 100 percent. Facing the prospect of a vote at its annual meeting, Amazon announced Wednesday that it had achieved pay equity — though some critics aren't buying it.
At any rate, the three companies would still be in the minority. In the tech industry in 2014, men earned $10,000 more than women on average, according to recruiting firm Dice. Figures from Glassdoor paint a similar picture: Female software engineers at the some of the industry’s biggest names earn thousands of dollars less than their male counterparts.
Lamb said it’s critically important for companies to address this problem, or they risk losing talent. And ultimately, the gap threatens companies’ bottom line, she said, pointing to recent research. “Tech lives and dies on innovation, and diversity has been shown to be a contributing factor to innovation,” she said.
Resolutions at Google, Facebook, Amazon, eBay and Microsoft are all up for vote in the coming months.
Oxfam America, meanwhile, is taking its fight to improve workplace safety at the nation’s biggest poultry producers directly to shareholders. The nonprofit filed proposals this year with Tyson Foods, Sanderson Farms and Pilgrim’s Pride, asking each company to start collecting and publishing information about working conditions in their processing plants.
It’s part of a larger campaign to boost the industry’s work standards. Last October, Oxfam published a report that shed light on the sector’s hazardous labor conditions, citing low pay and fast-paced, repetitive work.
“There’s a general lack of transparency when it comes to health and safety matters for workers,” said Oliver Gottfried, head of Oxfam’s poultry campaign. “There’s a significant risk to investors because of the lack of the transparency.”
Those risks range from high turnover rates and legal liabilities to food safety issues and fines from the federal Occupational Safety and Health Administration, Gottfried said.
Pilgrim’s Pride’s annual shareholder meeting isn’t until April 29, but the safety proposals at Tyson and Sanderson already went to votes last month. At Tyson, where the eponymous founding family owns about 70 percent of the voting power, the resolution received less than 10 percent support; at Sanderson, it won 25 percent of votes.
Despite the defeats, Oxfam is pleased by the reception so far — especially at Sanderson. “The first year, they tend to get low votes and rise over time,” said Michelle Katz, campaigns and policy advisor for Oxfam America.
Oxfam, for its part, is in it for the long haul. The nonprofit has a pool of cash expressly dedicated to shareholder activism. The group invests in the companies it targets for reforms and funnels the returns back into the fund, said Katz.
Other activist investors, meanwhile, have focused on the minimum wage debate. Domini Social Investments and Trillium Asset Management filed proposals at companies across the low-paying retail and food sectors asking them to “adopt principles for minimum wage reform.”
But with the exception of Panera Bread, each of the companies has successfully petitioned the U.S. Securities and Exchange Commission for permission to omit the proposals from their annual meetings. Targets included Best Buy, Chipotle, Staples and TJX, which owns T.J. Maxx and Marshall’s.
As often happens with activist shareholder proposals, the companies argued before the SEC that the resolutions dealt with “a matter relating to the company’s ordinary business operations.” Under existing regulations, resolutions can’t tackle such topics — the idea being that those decisions belong in the hands of the corporation’s top management team, not with shareholders.
But what qualifies as an “ordinary business operation” isn’t always clear, and the agency’s logic can be unpredictable, said Heidi Welsch, founding executive director of the Sustainable Investments Institute and co-author of this year’s Proxy Preview. “You never know; the SEC is a bit of an oracle,” she said.
Shareholder resolutions asking corporations to weigh into the healthcare reform debate in 2008 and 2009 managed to see votes, for instance. Like the minimum wage issue, the shareholders asked companies to stake out positions on a major public policy debate.
A few other resolutions ask companies to report more about workplace diversity, including at Citrix and Home Depot.
But when it comes to work-related proposals, Welsch said there’s been one indisputable category that has seen progress: protections for LGBT workers. In recent years, shareholder resolutions have successfully pressed companies into adopting policies that prohibit discrimination based on sexual orientation and gender identity.
The number of such proposals is down this year. But, “that’s basically because it’s not a contentious issue in corporate America anymore,” Welsch said. “The battle is over.”
That’s not because of the shareholder resolutions alone. But combined with decades of LGBT activism and recent decisions from the Supreme Court, they’ve helped usher in the change.
“Shareholder proposals are a reform-type thing,” Welsch said. “It’s incremental, not revolutionary. If you happen to hold stock in a publicly traded American corporation, you’re probably not a wild-eyed revolutionary.”