BOSTON, MA (May 2, 2013) – During this season’s corporate annual meetings, stockholders of ExxonMobil, Chevron, 3M, and Bank of America will have the opportunity to weigh in on shareholder proposals calling on the companies to refrain entirely from spending corporate funds to influence electoral politics. These proposals have been filed in the wake of the unprecedented spending levels since Citizens United, and are part of a broader shareholder movement to reign in corporate involvement in politics.
[The above links take the reader to exempt proxy solicitation letters which make the full case for the proposals. The text of the proposals can be found here: ExxonMobil, 3M, Chevron, Bank of America.]
When companies become involved in the electoral process, they are unnecessarily courting political and reputational risk,” said Sonia Kowal, Director of Socially Responsible Investing at Zevin Asset Management. “Companies that choose to refrain from political donations signal that they are able to profitably conduct business without resorting to regulatory favors.”
Chevron Corporation, ExxonMobil, 3M, and Bank of America are all facing shareholder resolutions calling for an end to the use of company funds to influence campaign elections. The four companies collectively spent more than $11.5 million dollars in the 2012 election cycle. The record-breaking $6.3 billion spent in the 2012 electoral cycle was largely enabled by the Supreme Court’s 2010 Citizens United v. FEC decision, which allowed unions and corporations to contribute unlimited amounts to “independent” spending organizations. Proponents of the proposals contend there is little evidence that this spending generated value to shareholders.
“Companies have not demonstrated the value of these controversial expenditures to shareholders,” commented Leslie Samuelrich, Senior Vice President of Green Century Capital Management. “Consequently shareholders don’t want to be left footing the bill as companies make big gambles in politics,” added Samuelrich.
Chevron received significant media attention for its unprecedented $2.5 million donation to GOP SuperPAC, which represents the largest single corporate donation since Citizens United. Bank of America, called “one of the most demonized corporations in America” by the New York Times in 2012, has given over $16 million to federal candidates since the 2002 election cycle, and $8.4 million to candidates at the state level since 2003. 3M was targeted for its second contribution to the same highly controversial Minnesota candidate that sparked public backlash and boycotts against Target Corporation. ExxonMobil is one of the country’s largest publicly traded political donors, spending over $14 million in federal and state elections since 2002. In filings to the Securities and Exchange Commission, the resolution proponents have elaborated further on the rationale behind each company’s resolution (see links at bottom).
Mike Lapham, Director of the Responsible Wealth Project in Boston, commented, “The record spending levels in this year’s elections are deeply unpopular with the majority of Americans. Companies like Bank of America need to listen to their customers and take their money out of politics.”
“It’s not clear that corporate political spending is beneficial to companies or their shareholders,” said Shelley Alpern, Director of Social Research and Shareholder Advocacy at Clean Yield Asset Management. “Companies should restrict their public policy participation to lawful lobbying activities, and stop putting their thumbs on the scales at election time. The electoral process belongs to individual voters, not corporate or union entities.”
This increase in corporate spending to influence elections is deeply unpopular with the majority of Americans across political lines. According to a 2012 poll by the Associated Press and the National Constitution Center, more than 8 in 10 Americans support limits on the amount of money given to groups trying to influence U.S. elections, with 85% support among Democrats, 81% among Republicans, and 78% among independents. In the text of the proposals, the resolution filers cite concerns about the reputation risks that Chevron, Bank of America, 3M and ExxonMobil may be exposed to by positioning themselves as some of the largest contributors in election campaigns during a time when public support for high spending levels in elections is so low.
The proposal at Chevron was filed by Green Century Capital Management. Zevin Asset Management filed at ExxonMobil. Clean Yield Asset Management filed the 3M proposal. The Bank of America proposal was filed by individual shareholders affiliated with Responsible Wealth, a project of the nonprofit organization United for A Fair Economy. This is the second year for the Bank of America and 3M filings.
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About the Resolution Proponents
Green Century Capital Management (www.greencentury.com) is an investment advisory firm focused on environmentally responsible investing. Founded by a partnership of non-profit environmental advocacy organizations in 1991, Green Century’s mission is to provide people who care about a clean, healthy planet the opportunity to use the clout of their investment dollars to encourage environmentally responsible corporate behavior. Green Century believes that shareholder advocacy is a critical component of responsible investing and actively advocates for greater corporate environmental accountability.
Clean Yield Asset Management (www.cleanyield.com) is an SEC-registered investment advisory firm working exclusively with social investors. Since its founding in 1984, Clean Yield’s goal has been to invest to promote a sustainable society while achieving competitive financial returns. Its hallmark is working closely with clients to ensure that it is responsive to their unique financial requirements and personal values.
Zevin Asset Management, LLC (www.zevin.com) Zevin’s first objective is to minimize losses rather than seeking to maximize gains. The firm’s proprietary model of asset allocation, based on scenario forecasting, has been refined over 40 years and has resulted in strong investment results by avoiding exposure to excessive risk. Zevin’s focus on environmental, social, and governance factors has also helped improve the risk/return profile of client portfolios.
Responsible Wealth (www.responsiblewealth.org) is a network of business leaders, investors, and inheritors in the richest five percent of wealth and/or income in the U.S. who believe that growing inequality is not in their best interest, nor in the best interest of society. As beneficiaries of economic policies tilted in their favor, Responsible Wealth members feel a responsibility to join with others in examining and changing the corporate and government policies that are widening the economic gap.