March 25, 2014
(Editor’s Note: This post is an excerpt from an article appearing in Practitioner Insights on WestlawNext)
Political spending and lobbying disclosures are again a hot topic of shareholder proposals in 2014. While shareholders that have considered these proposals at annual meetings this year have thus far rejected the proposals, the large number of proposals suggests that the issue continues to be one of great importance to some investors.
Activists urge greater lobbying disclosures
A group of 60 activist investors led by the AFSCME Employees Pension Plan and Walden Asset Management announced in February that they had submitted resolutions at 48 companies asking them to report their federal and state lobbying expenses. The proposals requested that the companies’ boards authorize the preparation of a report disclosing:
- company policy and procedures governing, both direct and indirect, lobbying and grassroots lobbying communications;
- payments by the company used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient;
- the company’s membership in, and payments to, any tax-exempt organization that writes and endorses model legislation; and
- a description of management’s and the board’s decision-making process and oversight for making payments described above.
Shareholders reject political spending and lobbying proposals
At its 2014 annual meeting, Emerson Electric Co. shareholders rejected the proposal, with approximately 65 percent of shareholders voting against the mandatory disclosure of such lobbying expenses.
Emerson’s shareholders also considered, and rejected, a political expenditure proposal submitted by Trillium Asset Management LLC. That proposal requested that the company provide a report disclosing its policies and procedures for making contributions to candidates for public office or to influence elections or referendums.
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