CARS HOMES JOBS

Spring brings new push for disclosure

Wednesday, April 2, 2014
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I wonder if Tom DiNapoli’s ears were burning.

The state comptroller, sole trustee of New York’s $160.7 billion Common Retirement Fund, isn’t very popular these days in some corporate circles. In fact, he was described as a “political partisan” recently in a webinar organized by the conservative Manhattan Institute to talk about 2014 trends in shareholder activism.

Proxy season has begun, the time of year roughly between March and June when most publicly traded companies hold their annual meetings. As part of those meetings, the brass brags about accomplishments and stockholders vote on routine matters recommended for approval by management.

But out-of-the-ordinary proposals can surface, too, drafted not by the companies but by shareholders interested in steering the corporation in a particular direction on issues such as animal rights, climate change or executive benefits.

Those shareholders tend to be labeled “activists,” and the Manhattan Institute divides them into three groups: pension funds, such as New York’s Common Retirement Fund; organized labor; and socially conscious investors, which include religious organizations and orders of Catholic nuns. The groups submitted 91 percent of the proposals that went before the biggest of the big public companies last year, those in the Fortune 250.

They’re back again this year, according to the Manhattan Institute, pushing hard for disclosure of what companies spend on lobbying and in political campaigns.

While the activists may say they’re just seeking transparency on who’s giving how much to whom, panelists in the webinar suggested the real goal was to create a cudgel with which to pound business and advance their own political agendas.

“This is unilateral disarmament,” said Andrew Pincus, a partner in the Washington, D.C., law firm Mayer Brown, which has large corporate clients. The result of one-sided disclosure could be a skewed public view that “these big evil companies are swamping our political system, when it may well be true that the spending on the other side … is worse than what companies spend on these kinds of issues,” he said.

By some estimates, lobbying and political spending are the top two shareholder proposals this year, but the Manhattan Institute’s James Copland isn’t impressed.

Copland runs the organization’s ProxyMonitor, a website that has tracked shareholder proposals for close to a decade. In the webinar, he identified AFSCME, the labor union for public employees, and DiNapoli, the New York comptroller, as taking leading roles in the disclosure push this year.

He called DiNapoli a “political partisan, an elected official” who, like AFSCME, could be seen as advocating more for the interests of constituents — government employees and retirees — than shareholders of the companies in which they’re invested.

But the bottom line, Copland said, is that stockholders “overwhelmingly” have rejected the proposals again and again, by margins ranging from 75 percent to 82 percent over the past five years.

He’s looking for more of the same this proxy season.

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at marlenejkennedy@gmail.com.

 
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