How Did You Vote on Debanking, Slippery European Tires, Anti-Energy Proposals, and Hiring Ex-Cons?
Shareholder meeting season has begun. You are voting. Would you like to know what you are voting for or against?
In the past several weeks, major businesses like PPG, Goodyear, & U.S. Bank put dozens of proposals before their shareholders. If you own those companies through asset managers, you voted on them – but do you know how you voted? Clients using our proxy voting guidelines have peace of mind that their shares are being voted in a way consistent with their worldview. However, if you entrusted votes to an asset manager that isn’t aligned with your worldview, chances are you won’t be happy with the way they voted your shares.
The past few weeks have seen a wide range of issues on the ballot — take a look at some of the highlights below.
A.O. Smith Corporation
A proposal that would ask A.O. Smith Corporation to evaluate its use of second-chance hiring in its recruitment policies. You voted for this proposal. It’s rare for ESG/DEI-aligned activist groups to uphold fiduciary duty, but the reality is, expanding a company’s talent pool to include formerly-incarcerated people for consideration on their merits is something that creates business success and bolsters shareholder return. We used resources from Prison Fellowship to help us figure out how to handle this proposal, including research showing that second-chance hiring makes economic sense.
Lennar Corporation
A proposal that would ask Lennar to disclose its emission reduction targets for its entire supply chain. You voted against this proposal. Pressuring companies to adopt anti-energy targets on anti-energy, activist-driven timelines is a double bad — neither one furthers shareholder interest.
Bank of Nova Scotia
A proposal pressuring the bank to perform a racial equity audit. You voted against this proposal. It is not in shareholder interest to ask a company to expend tremendous time and money to fix problems that are virtually unmeasurable and often lead to controversial race-based practices that negatively impact shareholder return and brand reputation.
Goodyear
A proposal that would ask Goodyear to evaluate the risks of tire wear. You voted against this proposal. It’s an activist driven narrative. The reality is that tires wear down, and companies can’t be effectively held responsible for a natural consequence of their products… being used. In fact, the only way to "fix" that is creating... tires that follow European mandates which create less friction with the road. Once again, activists find themselves at war with physics. Making your customers less safe to keep activists happy is not a blueprint for shareholder value.
U.S. Bank
A proposal that would urge the company to analyze the risk of political debanking. You voted for this proposal. U.S. Bank has debanked clients for seemingly political reasons (the company’s annual meeting include hearing from one of them, the Constitution Party of Idaho), and given the move we’re seeing from companies like JPMorgan Chase towards expressly prohibiting politicized debanking, this is an obvious ask of any financial company.
If you used our guidelines, you know how you voted for these proposals. If you outsourced your voting power to a manager like BlackRock, State Street or Vanguard, however, you generally voted against efforts to depoliticize company policy, from promoting merit-based hiring to prohibiting political debanking. This is why the alignment that BR guidelines create matters: the asset managers that control the vast majority of votes at companies like Goodyear & U.S. Bank are not interested in getting companies back to politically neutral.
We’ll keep at that — and until then, we’ll be keeping you updated on what’s on the ballot at America’s biggest companies. Thanks for allowing us to represent you in this arena.
Jerry Bowyer is President of Bowyer Research.
Isaac Willour is a Corporate Relations Analyst at Bowyer Research.