Proxy Preview 2019

Proponents have filed at least 386 shareholder resolutions on environmental, social and sustainability issues for the 2019 proxy season, with 303 still pending as of February 15. Securities and Exchange Commission (SEC) staff have allowed the omission of only six proposals so far in the face of company challenges, far fewer than the 27 omitted at this point last year because the SEC was included in the recent six-week government shutdown. Companies have lodged objections to at least 54 more proposals that have yet to be decided.

Proponents have already withdrawn more proposals than they had last year—71, up from 62 in mid-February 2018. Usually these are a sign that proponents and companies have reached an agreement.

Last year, the overall tally of resolutions reached 460 by year’s end, down from 494 in 2017. The proportion voted on dropped by 10 percentage points, to 177 resolutions, the lowest level of the decade and well below a high of 243 in 2016. Proponents withdrew 210 resolutions in 2018, nearly half of all they filed. Companies omitted a total of 65 proposals after SEC challenges in 2018, down from 77 in 2017.

Corporate political activity and environmental proposals (mostly on climate change) account for just under half of the resolutions this year. The categories of board diversity and oversight, sustainability, human rights and decent work each contribute about 10 to 12 percent. Diversity in the workplace makes up another 4 percent of proposals. The remainder are about health issues, media concerns, ethical finance and animal testing.

Mutual funds voting: Several of the huge mutual funds that have influential stakes in nearly every corner of the American financial markets have begun to pay attention to proxy voting on environmental, social and sustainability issues. This started in 2017 with votes supporting climate change and last year expanded to include proposals about the opioid epidemic and gun control. This pushed average support to more than 25 percent. Votes in 2019 are likely to be high, as well.

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