[2021 UPDATE] It is Shareholder Meeting Season, the time when corporations hold their annual meetings. During these meetings or via proxy shareholder voting, shareholders vote to approve or reject directors for the board, internal proposals, and external shareholder proposals.
Shareholder voting
If you own shares or fractional shares of companies, your inbox may be filled with emails whose subjects yell “Vote now!” It is the time of year for corporate annual meetings, which are typically held between April and June. Therefore, it is also the time of the year for shareholder voting and shareholder advocacy.
When you invest in a share, or stock, in a corporation, you become a part-owner. As part-owner, you have the right to vote in the annual meeting. You also have the right to help shape the corporation into a sustainable corporation.
Shareholder Resolutions
Shareholder resolutions, or shareholder proposals, may be introduced by shareholders who meet certain criteria. These resolutions provide shareholders with a way to create change within or for the corporation. Over 430 shareholder resolutions were filed in 2020. These resolutions will be voted on in the 2021 annual meetings.
After the murder of George Floyd, corporations pledged to take action on addressing racial inequity. 20 resolutions that address structural racism will be voted on, in an attempt to hold companies accountable for their pledges.
Many corporations in 2020 pledged that they will be net-zero carbon by 2040. 25 shareholder resolutions are focused on holding corporations accountable for climate action.
The need for worker protections has been made more dire by the COVID-19 pandemic. Approximately 10 resolutions about pandemic-related and general sick leave are being voted on by shareholders in 2021 annual meetings.
An example of a 2020 shareholder resolution, to be voted on at the May 2021 annual meeting, is a resolution filed by the New York City pension funds requesting that Amazon provide a report on worker health and safety. The resolution to be voted on by shareholders is:
Shareholders urge the Leadership Development and Compensation Committee (“Committee”) of the Amazon.com Board of Directors to prepare a report, prior to the 2022 annual meeting, at a reasonable cost and excluding proprietary and personal information, on the adequacy of Amazon’s efforts to reduce or mitigate health and safety risks from the coronavirus pandemic, including the Committee’s oversight thereof.
Green America provides a comprehensive list of shareholder resolutions being voted on in 2021. Proxy Preview provides a report that details the issues being addressed by shareholder resolutions being voted on in 2021. Table 1 highlights certain resolutions being voted on in 2021.
Examples of 2020 shareholder resolutions
Table 1 list examples of resolutions being voted on by shareholders in 2021.
| Company | Issue |
|---|---|
| Chevron | Issue audited annual climate transition report |
| Chevron | Issue audited annual climate transition report |
| Home Depot | Report on racism in the company |
| Johnson & Johnson | Report on COVID-19 drug pricing and subsidies |
| Lowes | Disclosure of political contributions |
| Netflix | Disclosure of Equal Employment Opportunity data |
| PepsiCo | Report on plastics pollution |
| Target | Report on/end police partnerships |
| Report on net-zero greenhouse gas emissions goals | |
| UPS | Report on diversity programs |
| Walmart | Report on paid sick leave policy |
| Wells Fargo | Report on financing Paris Agreement-compliant greenhouse gas emissions cuts |
How Do Shareholders vote?
If you own shares in a corporation, you should receive a notification stating that it is time to vote in the annual election. Most shareholders vote via proxy voting. Proxy voting authorizes an agent to act on behalf of another party or provides a format that allows an investor to vote without being physically present at the meeting. Proxy voting can be done electronically, through the mail, or over the phone.
The process to proxy vote electronically can be seen in Figure 1. Details for the steps that I, as a shareholder, follow to electronically proxy vote are provided below.
- Your “Vote Now!” emails arrive in my inbox from your broker e.g. Fidelity, Charles Schwab. Click the “Vote Now” button in the emails.
- You will be routed to website, such as Proxy Vote, that allows you to make your vote. A PIN for voting will be provided your broker.
- You can read the proposals listed for the relevant corporation’s annual meeting. The proposals include proposals presented by the corporation and shareholder proposals. The list of proposals will be accompanied by a document providing further details about the proposals.
- Voting time! For the proposals, you can select one of the three below voting options. Any proposals that you do not vote on will be counted as voting with the Board Recommendation.
- For
- Against
- Abstain.
- Hit submit and you’re done. Electronic proxy voting takes less than 5 minutes. It allows you to play my role in helping to shape the corporation into the sustainable corporation that I want it to be.