Proxy Preview 2015

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Investors are poised to break further records in 2015 in the number of shareholder proposals they have filed seeking corporate disclosure and action on a wide range of environmental and social issues. Si2 has identified 433 resolutions filed so far—up from 417 at this point last year. Corporate political activity of all sorts and environmental matters—predominantly climate change—continue to vie for top billing with 26 percent and 27 percent of the total, respectively; increasingly these are linked by investors who seek corporate action to bypass some of the vitriol that stymies government solutions. All told, environmental and sustainable governance resolutions combined represent 39 percent of the total so far, as in 2014, while political activity accounts for just over one-quarter of the total—down 4 percentage points from last year’s mid-February share.

The proportion of resolutions about human and labor rights is boosted this year to 15 percent of the total by a surge of requests for reports on pay disparity, which are grounded in concerns about the damaging effects of growing income inequality in the United States. On the other hand, workplace diversity proposals (which mostly concern rights for lesbian, gay, bisexual and transgender people) and those seeking more diversity among corporate board members—account for 9 percent of the total, as in 2014.

A significant change in the last two years has been a surge of proposals—some two dozen—largely filed or coordinated by the National Center for Public Policy Research (NCPPR), a conservative Capitol Hill think tank; these account for 5 percent of the total this year and held 4 percent last year. New this year are those asking companies to protect political free speech rights, but all of those that have been challenged at the SEC have been omitted.

The final 6 percent include two new proposals on foreign military sales, which won’t go to votes and some on drug pricing, which may, with another few about animals.

Fully 334 resolutions are now pending; comparable mid-February figures were 324 in 2014 and 284 in 2013. (A few more are likely to surface.) Companies have lodged challenges seeking to omit a total of 113 proposals at the Securities and Exchange Commission (SEC), which so far has rejected eight objections and sustained 22. The SEC still must decide another 62 (up from only 49 pending challenges at this time in 2014 and just 41 in 2013). Proponents have withdrawn 21 of the challenged resolutions—about what they had last year—sometimes after agreements with the companies and sometimes for tactical reasons because they have concluded that they are likely to be omitted and wish to avoid unwanted precedent. All told, this seems to document increased corporate legal resistance to shareholder resolutions—but decreasing success for these company challenges.

New developments in a nutshell: New climate change and energy proposals include one that raises questions about transporting oil and gas by train and several taking up different angles on deforestation that connect ecological and human rights impacts. Investors also want more information from companies about the impact of neonicotinoids on bees and other organisms, in a new resolution. On political spending, the volume of lobbying resolutions has clearly surpassed those on election spending. For health, new this year are proposals about the high price of specialty drugs. Regarding human rights, religious investors are newly asking for an end to fees levied on migrant tobacco workers—although the voting outlook is uncertain—while three proposals on a set of fair employment principles for Israel-Palestine will go to votes for the first time. In addition, the New York State Common Retirement System (NYSCRF) is inquiring about lethal injection drugs at two companies, an issue not raised in the past. Religious groups are leading an expanded campaign to persuade companies to report on pay disparity. Finally, a proposition about more board oversight of gun sales may reach Walmart’s proxy statement, after a U.S. District Court ruled in favor of its inclusion after an SEC omission last year, although the case is on appeal.

Contributors to this report: Si2 is grateful to all the shareholder proponents who provided detailed information about their plans for the upcoming proxy season, in particular the Interfaith Center on Corporate Responsibility, the Ceres coalition, the Center for Political Accountability and AFSCME. This report would not have been possible without the cooperation of all proponents. Si2’s Research Director, Robin Young, provided critical supporting research and assistance and Carolyn Mathiasen edited an earlier version of this report.


This section provides an overview of the upcoming proxy season, paying particular attention to new issues and how ongoing campaigns are evolving. The main body of the report gives a detailed analysis for each category listed here. In an effort to mirror the broader discussion about “ESG”—environmental, social and governance issues—the bulk of the report is divided into these categories. For the governance areas, we use the term “sustainable governance” to describe resolutions about how companies address a wide variety of sustainability concerns at the board level (through membership as well as committee structures and responsibilities) and in their overall reporting to investors. There are just two proposals relating to equity in financial services. Finally, the report describes proposals on disparate issues from investors worried about what they think are excessively liberal corporate tendencies; some two dozen filed this year seeking free speech protections represent a significant increase. But conservative proponents have had trouble writing resolutions that pass scrutiny under the SEC’s shareholder proposal rule, and few votes are likely.


Climate change and energy: Last year’s big increase in the number of resolutions focused on climate change is continuing in 2015, with 76 resolutions about carbon accounting, energy production and related risk management disclosures. In addition to continued demands for disclosing greenhouse gas emissions and setting targets to cut these emissions, investors want to hear more from companies about measuring and managing methane releases from expanded U.S. domestic oil and gas operations. Proponents also want companies to share information about how they will handle a future where demand for fossil fuel may be lower, and how they justify the high capital expenditures needed for unconventional fossil fuel extraction. These investors contend more robust action is needed from companies and that carbon assets are likely to become stranded as energy-related laws and regulations tighten and more storms and higher ocean levels challenge long global supply chains. A new proposal is raising questions about trains that transport oil and gas, as well, a problem highlighted by the spectacular West Virginia derailment of a train carrying oil from the Bakken Shale in North Dakota, just as this report was finalized.

Domestic shale energy production using hydraulic fracturing remains an investor concern and proponents still think companies should disclose more to become accountable to their many stakeholders; they have filed six proposals this year. Deforestation comes up in several proposals, with proponents increasingly drawing linkages between ecological and human rights concerns. New this year are more explicit resolutions asking for reporting on key performance indicators and goals so investors can better assess corporate behavior. The deforestation resolutions concern palm oil production, along with other agricultural commodities—with 10 proposals in all.

Environmental management and toxics: Fifteen resolutions ask for more corporate attention to the use of recycled materials in packaging and recycling; they also seek action on toxic materials including lead, as well as reporting on the range of unknowns associated with nanomaterials in a resubmitted proposal to Dunkin’ Brands, which was withdrawn. Calvert Investments withdrew at Dow Chemical once it agreed to continue discussions about the long legacy of the 1984 Bhopal disaster.

Industrial agriculture: Two brand new resolutions underscore widespread scientific concern about the impact neonicotinoids are having on bees and other organisms and ask for disclosures about their sales at Lowe’s and use in PepsiCo’s supply chain. Just three resolutions ask for reports on genetically modified organisms (GMOs), regarding labeling and risks, fewer than in recent years after low previous votes. There are no new developments in the resolutions from People for the Ethical Treatment of Animals (PETA), which is continuing to advocate about farm animal welfare, but a relatively high vote of 18.6 percent already occurred for a Humane Society of the United States (HSUS) proposal about pig gestation crates at Hormel Foods. In addition, four faith-based investors want McDonald’s to limit antibiotic use in its food animal supply chain, raising this issue for the first time since 2010 in a shareholder resolution—although they have been engaged in continued dialogue since then.

Social Issues

Animal testing: One proposal about animal testing was included in the Becton, Dickinson proxy statement but it did not go to a vote and PETA has not made public any other resolutions to date, although some are in the pipeline.

Corporate political activity: Slightly fewer proposals have been filed so far on corporate political activity this year—113 so far compared with 126 in mid-February 2014. Proponents of more disclosure about election spending and lobbying have yet to see any substantive response from the SEC on a proposed formal rulemaking that could compel more transparency. The key sticking point in the debate remains contributions to and spending by intermediary groups such as trade associations, which is a central focus of all the proposals. A total of 64 proposals ask for more information about how and why companies are lobbying to influence elected officials and regulators, while 44 seek more oversight and disclosure of campaign spending by companies using the model championed by the Center for Political Accountability. Six address other sorts of corporate political involvement—but just one this year seeks a ban on election spending—at Chevron, which spent $3 million on three failed candidates for city council in Richmond, California.

Diversity in the workplace: Seventeen resolutions seek formal protections for lesbian, gay, bisexual and transgender (LGBT) employees but half already have been withdrawn as companies have agreed to the requests. After more than a dozen years, ExxonMobil joined the ranks of the convinced and changed its policy, citing changes in national law. Three more proposals from the New York City Comptroller’s Office ask about disclosing the racial makeup of workforces.

Health: The UAW Retiree Medical Benefits Trust is asking four specialty pharmaceutical companies to report on how they price expensive drugs, but pending SEC challenges make it unclear if the proposals will go to votes. Just one child obesity resolution is pending, at Dine Equity, while only one of three tobacco proposals (about educating vulnerable smoking populations) seems likely to go to a vote.

Human rights: Members of the Interfaith Center on Corporate Responsibility (ICCR) and trade unions are continuing to ask companies to conduct and report on human rights risk assessments, having gained traction last year with this approach; 10 resolutions are pending. A new angle on human trafficking is raised in proposals at six tobacco companies, asking them to address recruitment fees required of migrants working in U.S. tobacco fields. Going to a vote for the first time at three companies is a resolution about the Holy Land Principles, a new fair employment code of conduct for companies operating in Israel-Palestine. Also new is a resolution from the New York State Common Retirement Fund (NYSCRF) asking two drug makers about their policy on supplying drugs used in executions.

Labor rights and pay disparity: Religious investors have filed resolutions at 15 companies asking for a report on pay disparity, in a significant expansion of previous efforts. Equal pay for women is also on proxy agendas, potentially, at two companies.

Media and privacy: Just two resolutions before companies raise questions about media issues—one regarding privacy and data security filed at six financial services firms, and the other filed by the Nathan Cummings Foundation about net neutrality.

Sustainable Governance

Board diversity: Investors have already withdrawn six of the 15 proposals filed seeking greater board diversity in the campaign being coordinated by the Thirty Percent Coalition, and more withdrawals are likely as the season progresses.

Board oversight: The 14 proposals about board oversight include those asking eight companies to make commitments and set up board committees for supervision of human rights and sustainability; six are still pending. Trinity Church Wall Street, which was turned back by the SEC in its request to have Wal-Mart’s board examine gun sales, is engaged in a lawsuit that may allow a vote on the subject—but it is facing the company’s appeal of a lower court ruling in its favor. Faith-based tobacco activists are using the same approach to propose more board oversight of tobacco sales, as well. Finally, NYSCRF has three pending resolutions asking companies to nominate environmental experts to their boards.

Sustainability oversight and reporting: Proponents have filed 30 resolutions asking for sustainability reports, with more emphasis this year than last on climate action, while another 11 request executive pay links to sustainability metrics. Early proof of the continuing appeal these resolutions have for investors were votes in January—46.5 percent vote at Commercial Metals and 39.3 percent at Emerson Electric. The volumne of filings is about where it has been at this time of year for the last several years. Twice as many of the reporting resolutions are resubmissions this year (14), as proponents pursue reform at companies that in some cases have not responded despite high levels of previous support. To date there have been five withdrawals, all reached after disclosure agreements. Last year’s focus on supply chains has largely evaporated, with just one proposal at Dollar General that already has been withdrawn—down from a dozen proposals last year.

The SEC has turned back an attempt to get mutual fund company stockholders to weigh in on the wisdom of reviewing proxy voting policies and linking them to these companies’ corporate responsibility commitments.

Economic (Equitable Finance)

A proposal about addressing “moral hazard” in Citigroup’s operations has been challenged at the SEC and Domini Social Investments has withdrawn its proposal about reporting on a set of fair tax principles at Google.


A new effort to get companies to enshrine in their policies the right to political free speech is being turned back by a skeptical SEC, but up to two dozen resolutions on the subject were filed by the National Center for Public Policy Research (NCPPR). Its proposals last year about “free market health care principles” have not been resubmitted, though. Conservative activists also are questioning the wisdom of investing in renewable energy and seek to turn back corporate support for LGBT rights, but as in the past few if any of these will make it onto proxy statements. An exception is a proposal that will go to a vote at Apple’s March 10 annual meeting, regarding the risks posed by the potential rollback of climate change regulations.


Types of Proposals

Investors vote on shareholder proposals (also referred to as resolutions) from both management and shareholders about issues that raise environmental, social and corporate governance issues.

Environmental and social proposals focus on a wide variety of issues. These proposals generally call for reports or policy changes on key issues that can impact a company’s bottom line, often through posing reputational risks. Managements in nearly all cases voice opposition to these proposals, with some rare exceptions, yet these proposals have been steadily gaining much greater support among large, mainstream institutional investors. Social proposals often serve a “canary in the coal mine” role, as they historically have identified many areas of financial risks—including climate change and the sub-prime mortgage crisis—years before companies begin to address (or in some cases, even acknowledge) these issues.

Governance proposals focus on the management of the corporation. Proxy statement agenda items from management include the election of directors, appointment of auditors, and approval of company stock plans, among others. Proposals raised by shareholders commonly include board structure, such as calls for more independent board members or for the separation of the board Chair and CEO position; compensation concerns, such as linking executive compensation to performance, or short- and long-term incentive plans and golden parachute arrangements; improved voter access via cumulative or supermajority voting; and anti-takeover measures such as poison pill provisions. Several hundred governance proposals are filed every year and numerous sources of information on these are publically available. Proxy Preview only includes a small subset of governance proposals that overlap with social and environmental issues, including board diversity, linking executive compensation to social criteria or setting up specialized board committees or designated experts to oversee sustainability concerns. We include in the report a section on “Sustainable Governance” that encompasses sustainability reporting and board oversight issues, since these issues relate to fundamental strategy and company accountability to investors.

Proposals listed in this publication are up to date as of February 17, 2015. At that time proponents had filed, or had firm plans to file, 433 shareholder proposals; all are discussed in Proxy Preview. Some proposals described here will not appear on your proxy statement because they will be withdrawn by the filers in exchange for company dialogues or because companies changed their policies; more than 10 percent are likely to be omitted from proxy statements by the company in accordance with SEC rules. The number of proposals filed indicates how broad a shareholder campaign is and/or a growing or waning shareholder interest in the different issue areas. Pending proposals are those that appear in the proxy statement and will go to a vote unless they are withdrawn or omitted.

Understanding Shareholder Votes

Most proxy votes are dominated by company management and a few dozen large financial institutions, which often automatically vote with management and hold the majority of a company’s shares. Consequently, it is difficult and extremely rare to see a majority vote on a shareholder-initiated proposal, although votes have been rising steady and a majority vote is not as unusual as it once was. Recognizing this, the SEC requirement for a proposal to receive enough votes to be re-filed for the following year is 3 percent for the first year, 6 percent the second year, and 10 percent the third year and each subsequent year. While these votes would be negligible in the political arena, even relatively modest shareholder votes can serve as the impetus for significant corporate policy changes. In most cases, an investor with 3 percent ownership in a company would be one of the top shareholders, and thus even single digit votes may gain considerable attention from company management. Social proposal votes above 10 percent are virtually impossible to ignore and often—but not always—result in some action by the company to address the shareholder’s concerns.

Major Players

Proposals often have many co-filers with one lead or primary filer. The following is based on the primary filers for this year’s social, environmental and sustainable governance resolutions.

Socially responsible investors (SRIs) make investment decisions based on a company’s social, environmental, and governance performance, as well as its financial returns. Over the last few years, SRIs have gradually become the largest filers of shareholder resolutions. This year they are the primary filers of 144 resolutions representing 33 percent of filings, up from 31 percent in 2014. Leading this year’s effort are Calvert Investments (primary filer on 33 proposals), Walden Asset Management (28), Trillium Asset Management (18) and Domini Social Investments (eight)—in addition to six proposals each from Arjuna Capital, Clean Yield Asset Management, Green Century Capital, Northstar Asset Management and Harrington Investments. Many SRI firms, like other types of proponents, work in concert with others and regularly co-file proposals.

Faith-based institutions set up the Interfaith Center on Corporate Responsibility (ICCR) in 1971 and pioneered the shareholder advocacy movement for social change. For four decades, faith-based investors were the most prolific resolution filers; they continue to play a crucial role both as innovators and coordinators of shareholder networks today but now are involved in more dialogues than shareholder resolutions. They are the primary filers of 21 percent of 2015 resolutions, up from 17 percent in 2014, and co-file many more. The most active institutions are Mercy Investment Services (17 proposals), the Midwest Capuchins (Capuchin Franciscans, St. Joseph Province) (12), the Unitarian Universalists (eight), the Congregation of Sisters of St. Agnes (six) and the Presbyterian Church (USA) (six). ICCR publishes an annual book detailing the proxy season activity of its members and making recommendations on how to vote; the 2015 edition is available on its website.

Pension funds hold a unique role as active shareholders. On the one hand, they are among the largest filers of social and governance resolutions, yet, simultaneously, they often work behind the scenes to develop initiatives and benchmarks that help set standards for corporate behavior. Pension funds account for 14 percent of resolutions covered in Proxy Preview, down from 24 percent in 2013. The New York State Common Retirement Fund and the New York City pension funds between them have filed the most, with dozens of proposals each; the California State Teachers Retirements System is also an important player. (The big push on proxy access by the New York City funds has reduced number of pension fund proposals included here.)

Individual proponents have increased their share to 9 percent in 2015, up from 6 percent last year. While a small number of very active individual investors mostly have been filing corporate governance resolutions for years, the number of individual proponents of social and environmental resolutions jumped significantly this year, with 35 sponsoring proposals in 2015, up from two dozen last year.

Labor unions have played a key role in the development of the shareholder advocacy movement, particularly with regard to corporate governance issues such as executive compensation and shareholder access to the proxy statement. Union concerns on labor rights, worker safety and political spending account for 8 percent of the social and environmental resolutions filed this year, the same as in 2014. The American Federation of State, County and Municipal Employees (AFSCME) and the UAW Retiree Medical Benefits Trust (primary filers of eight each), along with the Laborers’ International Union (six) and the AFL-CIO (four).

Special interest groups have used shareholder resolutions to promote their own specific issues. Their resolutions often get low votes but in some cases—such as animal welfare—they still can be part of effective corporate reform initiatives. Special interest groups account for 8 percent of this year’s resolutions, up from 6 percent last year—dominated by the conservative National Center for Public Policy Research (at least 16 proposals), the Pride Foundation (eight) and People for the Ethical Treatment of Animals (seven—not all of which are publicly named).

Foundations have discovered that shareholder advocacy can support their missions and strengthen financial management of their investments. As You Sow has been a leader among foundations in using proxy voting and shareholder advocacy, filing more than 180 resolutions since 1998. Foundations as primary filers account for 6 percent of resolutions in 2015, down slightly from 2014, again led by As You Sow (primary filer of 18 of the proposals in Proxy Preview) and the Nathan Cummings Foundation (four). Additional foundations serve as co-filers on many proposals.

Universities: While institutions of higher education—notably Loyola University of Chicago, Swarthmore College and Wesleyan University—have filed proposals in the last few years, they are not primary filers on any resolutions this year. Most of the biggest endowed schools vote their proxies, although the proportion of directly held stock has shrunk dramatically given changes in endowment management practice, prompting a reexamination of options for engagement at some institutions. This is coming even as many grapple with increasingly insistent student demands to sell fossil fuel stock. Some school endowments have formed the Intentional Endowments Network, which is convening meetings for those responsible for endowment management and other stakeholders, as part of an effort begun last year as a project of Second Nature, which coordinates the American College and University Presidents’ Climate Commitment.

Shareholder Proposal Trends

The number of shareholder proposals on social and environmental issues has climbed steadily upwards, with a big jump between 2013 and 2014 that shows no sign of stopping this year. Investor support also is increasing. The number of proposals voted has not climbed as steeply, though, given an increase in withdrawn proposals—which reached an all-time high proportion in 2014 of 40 percent. From 2006 to 2011, the proportion of proposals that were omitted because they did not conform to the Shareholder Proposal Rule stayed about the same overall, despite important changes in the SEC’s interpretation of the rule, before dropping to a new low of just 10 percent in 2014. The biggest change in shareholder proposal results in the last decade has been the doubling of average support, reaching 21.9 percent in 2014.

Overall trends: Four categories of proposals stand out from the others (see chart). The flood of political activity resolutions has continued, unabated, with nearly 130 proposals in 2013 and 2014. The second largest current category of proposals has focused on the environment, with most taking up some aspect of climate change and energy production; these proposals increased to more than 100 in 2014 for the first time. Sustainable governance concerns, including board oversight of environmental and social issues and reporting on a wide range of often cross-cutting sustainability concerns, was about the same in 2014 and 2013. Proposals about human rights and decent working conditions, combined with a mix of diversity topics (for board representation as well as among employees) picked up in 2013 and 2014, although their overall total is still below the 2010 level. The mix in 2014 included resolutions focused on human rights risk assessments, in an expansion of a 2013 initiative.

Proposals about animal welfare in industrial agriculture production as well as in medical laboratories have dropped considerably over the last several years; while they garner little investor support proponents nonetheless have successfully achieved some reforms. Also of note is a small but persistent set from political groups on the right, which increased in 2014 and has now doubled in 2015. Outside these categories, the total number of other resolutions is limited.

Votes: The bar chart at right illustrates the overall volume of votes and level of support for environmental and social shareholder proposals in the last five years. (These figures exclude three management-supported proposals.)

Withdrawals and omissions: About four in 10 of all filed proposals end up getting withdrawn each year, a proportion that has gradually increased. Proposals on issues that receive high levels of support are the least likely to be struck from proxy statements after company challenges at the SEC. Generally they are the most amenable to negotiated withdrawals as well. Proposals on diversity, corporate political activity and sustainable governance average more than 20 percent support, while climate and energy resolutions also have crossed this threshold. These issues have low rates of omission and—except for political activity—have high withdrawal rates. These withdrawals have come in most cases after proponents and companies agreed to either discuss the issues further or take specific actions.

Sector trends: Energy and Consumer Discretionary sector companies are the most likely to receive proposals, with more than 300 filed in each of these sectors in the last five years. Further, while overall only about half the proposals filed went to votes, Energy company proposals were much more likely to see votes (59 percent of filings voted on) than those at Consumer Discretionary firms (only 40 percent voted on). Energy companies were the least likely to win omissions at the SEC (just 7 percent of filed proposals omitted for the sector), while Telecoms and Utilities had the most luck (27 percent and 22 percent of filings omitted, respectively). At the same time, proponents withdrew just one-quarter of Telecom company proposals, but did so for nearly half of Consumer Discretionary filings, generally after company agreements.

High volume and support in the Energy sector: Resolutions voted on at Industrials companies earned the highest average support (26.1 percent for 95 resolutions), but the Energy sector has seen twice as many votes with average support more than 25 percent support. The Telecoms average support of 24.9 percent was close behind, but there were only 29 votes.

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