2015 Mid-Season Report

As we near the close of corporate America’s “proxy season”—the period between mid-April and mid-June when most large, publicly traded corporations in the United States hold annual meetings to vote on company business, including resolutions introduced by shareholders—a clear picture has begun to emerge. By May 27, 2015, 211 of the nation’s 250 largest companies by revenues, as listed by Fortune magazine and in the Manhattan Institute’s ProxyMonitor.org database (see box), had filed proxy documents with the Securities and Exchange Commission. This report bases its analysis on those companies’ filings, as well as voting results for 186 of those companies that had held their annual meetings by May 22.

Companies are facing more shareholder proposals in 2015. A principal driver of the increase in the number of shareholder proposals is the aggressive campaign being led by New York City Comptroller Scott Stringer, elected in 2013, on behalf of the city’s large pension funds, which control some $160 billion in assets.[3] As a part of what he calls his Boardroom Accountability Project, Stringer has introduced numerous shareholder proposals seeking to grant shareholders with a certain percentage of a company’s outstanding shares the right to nominate directors to the board, with such nominees listed as a voting option on the company’s own proxy statement—i.e., proxy access.[4] In addition, 2015 has witnessed an increase in shareholder proposals, relating to environmental issues, sponsored by social-investing funds.

Comptroller Stringer’s proxy access effort has won substantial shareholder support—72 percent of such shareholder proposals coming to a vote by the end of May won the support of a majority of shareholders—such that the percentage of shareholder proposals to win majority backing in 2015 is the highest since 2010. Excluding proxy-access proposals, however, shareholder support for shareholder proposals remains scant: only 3.5 percent of all other shareholder proposals have received majority support, less than in any other year in the ProxyMonitor.org database, dating back to 2006.

This finding examines these trends in more detail. Section I examines overall shareholder proposal filing and voting results, including the most frequent subjects and sponsors of proposals. Section II looks at voting on the proxy-access proposals. Section III discusses proposals related to companies’ political spending or lobbying, which remain the second-most-common class of proposal in 2015 (behind those involving the environment), even though they have been introduced less often than in recent years.