INSTITUTIONAL INVESTORS CONTINUE TO PRESS COMPANIES FOR DISCLOSURE OF PUBLIC POLICY ADVOCACY ACTIVITIES

In 2016 Shareholder resolutions filed with 50 companies by 66 institutional and individual investors. Corporate public policy advocacy disclosure remains a top shareholder proposal topic in 2016. At least 66 investors filed proposals at 50 companies asking for public policy advocacy reports that include federal and state public policy advocacy payments, payments to trade associations used for public policy advocacy, and payments to any tax-exempt organization that writes and endorses model legislation.

Political activity remains a top investor topic for the sixth consecutive year, with more than 90 proposals filed for 2016 that seek disclosure of either public policy advocacy or political contributions. Reflecting investors’ interest in disclosure of corporate political spending, a rulemaking petition at the Securities and Exchange Commission (SEC) to require disclosure of corporate political spending has received a record level of support. More than 1.2 million comment letters have been submitted¾the vast majority in support of the proposed rule. Moreover, according to a 2015 survey, a majority of public company board members believe that the SEC needs to develop mandatory disclosure rules for corporate political contributions . Still, the SEC has yet to act, and in December 2015 Congress passed the budget bill that included a rider that bars the SEC from issuing political spending disclosure rulemaking. Proponents believe that disclosure allows shareholders to evaluate whether public policy advocacy is consistent with a company’s expressed goals and is in the best interests of the company and shareholders. Corporate reputation is an important component of shareholder value, and controversial public policy advocacy activity can pose significant reputational risk. Undisclosed company payments to trade associations used for public policy advocacy are a notable shortcoming in current reporting that allow companies to influence policy anonymously. Trade associations are not required to disclose their members or source of funds used for public policy advocacy, and the amounts are substantial. Investors believe companies need to safeguard corporate reputations that may be affected by controversial political spending, including through third party involvement. For example, if a company takes steps to address climate change while simultaneously supporting trade groups that oppose legislative or regulatory efforts to limit its effects, then they are contributing to positions that run counter to company climate policy.

This is the sixth year proposals asking for public policy advocacy disclosure have been filed by investors. In 2015, 65 proponents filed 54 proposals, out of which 33 went to a vote and averaged 26 percent support. The proposals have led many companies to improve their public policy advocacy  disclosure, including disclosure agreements at more than 40 companies.

Companies receiving public policy advocacy disclosure resolutions for 2016 are:

1. AbbVie
2. Allergan
3. Alphabet
4. American Airlines Group
5. American Express  
6. Anthem
7. AT&T
8. Bank of America
9. Boeing  
10. Caterpillar
11. CenterPoint Energy  
12. Charles Schwab
13. Chesapeake Energy  
14. Chevron  
15. Citigroup  
16. Comcast  
17. ConocoPhillips  
18. CONSOL Energy
19. Devon Energy  
20. Dominion Resources  
21. Duke Energy  
22. DuPont  
23. Emerson Electric  
24. Enbridge  
25. Exxon Mobil
26. Facebook  
27. FirstEnergy  
28. General Electric  
29. Honeywell  
30. IBM  
31. Johnson & Johnson  
32. Monsanto  
33. Motorola Solutions  
34. Navient  
35. Nucor Corporation  
36. Pfizer
37. Philip Morris International
38. Raytheon  
39. Spectra Energy  
40. Suncor  
41. Tesoro Corp.  
42. Time Warner Cable
43. TransCanada  
44. Travelers Companies  
45. Tyson Foods  
46. United Parcel Service  
47. Verizon  
48. Wal-Mart
49. Walt Disney Company  
50. Wells Fargo