Think tank asks companies to weigh risks of using politically aligned media for ads

January 20, 2017

A conservative think tank has submitted a shareholder proposal at several companies asking them to report on the risks associated with advertising with media outlets allegedly aligned with political causes.

The National Center for Public Policy Research submitted proposals at Ford Motor Co. and pharmaceutical companies Pfizer Inc. and Bristol-Myers Squibb Co. for their upcoming 2017 annual meetings.

The proposal asks each company to prepare a report to shareholders by December 2017 containing an “assessment of the political activity resulting from its advertising and its exposure to risk resulting therefrom.”

Each company has requested a no-action letter from the Securities and Exchange Commission indicating that the commission will not take adverse action if the company excludes the proposal from the proxy materials for its annual meeting.

Media political collusion cited

NCPPR describes itself as a “nonpartisan, free-market, independent conservative think tank.” The center, founded in 1982, has taken on a number of free-market and conservative causes at corporations through its Free Enterprise Project, according to its website.

In a supporting statement for the proposal submitted to Ford, Bristol-Myers and Pfizer, NCPPR cited WikiLeaks communications that “show collusion between high-level political personnel and certain national news outlet employees.”

According to the statement, media companies involved in this alleged “unethical behavior” include ABC, NBC, CNBC, CNN, The New York Times, The Washington Post and Politico.

Media outlets have faced audience backlash or boycotts over their political connections, NCPPR said. The boycotts have sometimes extended to companies that advertise with the media outlets, according to the group.

The boards of Ford, Pfizer and Bristol-Myers should be aware of the risks associated with advertising with politically influenced media outlets and report their findings to shareholders, NCPPR said.

No-action relief requested

Each of the companies cited similar grounds for requesting no-action relief to omit the proposal from their annual meeting materials. They said that NCPPR’s proposal is excludable under SEC Rule 14a-8(i)(7), 17 CFR § 240.14a-8(i)(7), because it relates to ordinary business operations.

By addressing how products are advertised, the proposal treads too far into day-to-day management decisions, the companies said.

The companies also said that the proposal does not address a significant public policy issue to qualify for an exception to the ordinary business operations basis for exclusion.

Ford Motor Co. SEC No-Action Letter, 2017 WL 65648 (Jan. 5, 2017).

Bristol-Myers Squibb Co. SEC No-Action Letter, 2016 WL 7487429 (Dec. 29, 2016).

Pfizer Inc. SEC No-Action Letter, 2016 WL 7423322 (Dec. 16, 2016).