The lobbying transparency campaign is coordinated by Walden Asset Management and the American Federation of State, County and Municipal Employees (AFSCME).


John Keenan
Corporate Governance Analyst, AFSCME Capital Strategies

In 2019, the investor campaign for lobbying disclosure is focusing on corporate political responsibility, with an increased concentration on climate change lobbying. More than 30 proposals have been filed asking companies to disclose their federal and state lobbying, trade association payments and support for the American Legislative Exchange Council (ALEC).


Primary resolution: The resolved clause for the main campaign resolution remains the same and has been filed at 31 companies, down from 47 last year. Most—24—are resubmissions. Five have been withdrawn.

The main proposal asks for an annual report that includes:

  1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.

  2. Payments by [the company] used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.

  3. [The company’s] membership in and payments to any tax-exempt organization that writes and endorses model legislation.

  4. Description of the decision-making process and oversight by management and the Board for making payments described in sections 2 and 3 above.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which [the company] is a member.

Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.

The report shall be presented to the Audit Committee or other relevant oversight committees of the Board and posted on [the company]’s website.

Votes—Investors at Tyson Foods gave the proposal 11.1 percent on February 7. Another is scheduled for an early vote on March 7 at Walt Disney.

Withdrawals—The five agreements reached so far include the following:

  • AT&T agreed to expand its lobbying disclosure and list its major trade associations and how much they spend on lobbying with company money. AT&T also has withdrawn from ALEC. The proposal was in its sixth consecutive year and had earned about 34 percent from 2016 to 2018, above earlier levels.

  • Bank of America agreed to policy changes and more disclosure on its website. Proponents withdrew this resolution in 2018 and 2017 after reaching agreements, but it went to votes earlier, earning around 30 percent in 2014, 2012 and 2011. The bank at present does not list all its trade association memberships, dues or lobbying done with its funds through these associations.

  • The withdrawal with agreement at Emerson Electric came after a vote of 39.6 percent last year in its fifth resubmission, down slightly from 41.6 percent in 2017.

  • IBM has revamped its website about its political activity policies and spending, with additional information on its views about public policy issues, as well as its approach to grassroots lobbying and more about state lobbying expenditures. This was the ninth year for the resolution at IBM; it earned 32.9 percent in 2018 and 28.5 percent in 2017. Earlier proposals earned about 25 percent.

At JPMorgan Chase, proponents withdrew given ongoing dialogue about lobbying disclosure. This proposal last went to a vote at the company in 2015, earning 6.6 percent support in its third year (not enough for resubmission until 2019); previous support had been less than 10 percent.

SEC action—Lobbying proposals have survived SEC scrutiny for several years. Last year, companies tried to no avail to use SEC Staff Legal Bulletin 14I as a basis for a possible reinterpretation of the “significantly related” section of the shareholder proposal rule the bulletin discusses. In rebutting arguments from Citigroup, Eli Lilly, Goldman Sachs and Travelers, SEC staff took note of earlier votes of 20 percent or more, seeing this as a sign of investor interest. In a notable counterargument to Citibank’s contention the resolution had no relevance to its business, the proponents pointed out a provision of the 2010 Dodd-Frank financial reform law was dubbed “the Citibank provision” given work by the company’s lobbyists. At Goldman, the SEC found the board analysis of the proposal to be lacking and said the firm had not provided “sufficient level of detail to reach a determination that exclusion of the Proposal is appropriate.”

This year, Honeywell has returned to the SEC with a new argument against the lobbying resolution. It says in its challenge that the proposal is moot given its current disclosures and high rating from the CPA-Zicklin Index. The CPA index does not discuss or rate lobbying, however, which is covered under separate disclosure laws. The Honeywell proposal is a resubmission that earned 40.7 percent in 2018 and 36.7 in 2017—with similar votes logged each year since 2014. (The challenge notes that a second proposal supporting a free market approach to corporate political activity may be excluded because it uses the same resolved clause and was received second, even if the SEC staff does not agree that the proposal is moot.)

Pfizer also received two proposals with the same resolved clause but opposite intent—one from the disclosure campaign filed by the Teamsters and other groups and one from a conservative group, but in this case the conservatives’ proposal was postmarked first. Pfizer has written to the SEC requesting a green light to omit the Teamsters proposal, which it will certainly receive. Pfizer also is contending the resolutions relate to ordinary business because they are too detailed and therefore seek to micromanage. The resolution had been voted on in earlier years as part of the AFSCME-Walden campaign. It earned 33.5 percent in 2018, after a withdrawal in 2017 in which Pfizer agreed to annually review its lobbying priorities and spending at the board level and to amend the charter of its governance committee to reflect this.

Hybrid proposal: The New York City pension funds want Alliant Energy and NRG Energy to report about both lobbying and election spending, in resubmitted proposals that earned 39 percent and 35.2 percent, respectively, last year. The resolution seeks disclosure of all recipients and contributions from company funds with any non-tax-deductible expenses for political activities incurred related to:

a) influencing legislation, (b) participating or intervening in any political campaign on behalf of (or in opposition to) any candidate for public office, and (c) attempting to influence the general public, or segments thereof, with respect to elections, legislative matters, or referenda. Shareholders request that the report detail any:

  • contributions to, or expenditures in support of or in opposition to, political candidates, committees, and parties;

  • dues, contributions, or other payments made to tax-exempt organizations operating under sections 501(c)(3), 501(c)(4), and 527 of the Internal Revenue Code, respectively, including tax-exempt entities that write model legislation, and non-profit groups organized to promote “social welfare”;

  • portion of dues or other payments made to tax-exempt entities that are used for an expenditure or contribution and that would not be deductible under section 162(e) of the Code if made directly by the Company.