Investor Statements on SEC Proposed Changes to Shareholder Proposal Rule

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Statements from Investors

Investor Voice:: SEC’s Proposed Rule Changes Muzzle Shareholders and Shield CEOs From Accountability

SEATTLE – The U.S. Securities and Exchange Commission voted today to consider sweeping changes to the regulations governing the shareholder proposal process which negatively impact small investors as well as proxy advisory services. The proposed changes to Rule 14a-8 include substantially more strict and complicated thresholds for filing, significantly higher resubmission requirements, serious free speech infringements on independent third-party proxy advisory services, and onerous restrictions on an investor’s essential agency right to seek assistance. 

“The shareholder proposal rule is the bedrock of effective corporate engagement in the United States,” said Bruce Herbert, chief executive of Investor Voice.  “For over 70 years, the shareholder engagement process has been a vital tool for stockowners to propose good ideas involving sustainability, profitability, and governance; to hold CEOs accountable for mismanagement; and to mitigate risk by addressing issues like climate change and human rights.” 

“These proposed changes were not asked for by investors,” Herbert continued, “they are the result of a concerted influence campaign backed by large industry associations. Key players were the Business Roundtable, National Association of Manufacturers, and the U.S. Chamber of Commerce – each of whom believes that responding to small investors creates an undue burden on the corporation.”

The proposed changes, Herbert said, are a solution in search of a problem.  Trump appointees to the SEC, including Chair Jay Clayton and Commissioner Elad Roisman, argue that change is needed to ‘modernize’ the shareholder engagement process, asserting that the rules have not been “revised” in decades.  

“However,” Herbert observed, “that argument is highly misleading because ‘revision’ is very different from ‘review’ – the fact is that the shareholder engagement rule has been reviewed many times over the decades and always found to be fresh and beneficial as it stood.  Focusing on ‘revisions’ while ignoring ‘reviews’, as Clayton and Roisman purposefully do, is like asserting that someone who goes in for annual check-ups has received no medical attention whatsoever unless and until they undergo surgery.”

The two Democrats on the commission, Allison Lee and Robert Jackson, blasted the proposed changes as a power-grab by corporate CEOs.  “The bottom line is that today’s proposals would shift power away from shareholders and towards management,” said Commissioner Lee.

Commissioner Jackson, meanwhile, argued that, while some minor reforms may be needed, today’s proposals “amount to swatting a gadfly with a sledgehammer.”

The Commission passed the motion to consider the proposed changes on a party-line vote of 3-2.  The public will have only 60 days to submit comments to the SEC once the proposals are published in the Federal Register.

Contact:  Bruce Herbert  


US SIF opposes SEC’s proposed changes to Rule 14a-8 and proxy advisors 

Washington, DC, November 5, 2019 - US SIF: The Forum for Sustainable and Responsible Investment today shared the following statement about two proposals the Securities and Exchange Commission (SEC) issued today.  One proposal would change rule 14a-8, the regulation that spells out the rights shareholders have to raise substantive issues of concern at the annual meetings of the companies in which they invest.  The second proposal would impose additional requirements on independent proxy advisory firms that provide recommendations to investors on the voting items at the meetings of publicly traded companies.

The proposed changes to the 14a-8 rule would limit shareholders’ ability to file resolutions at the annual meetings of publicly traded companies.  Under the existing rule, the minimum stock ownership necessary to file a resolution at a corporation’s annual meeting is $2,000, which must be held for at least one year.  The SEC is proposing instead that shareholders would have to own $25,000 of the target company’s stock for at least one year (a 1,200% increase), or $15,000 for at least two years.  Smaller shareholders who own at least $2,000 but less than $15,000 worth of the company’s stock would have to wait three years to file a resolution.

The SEC also proposes to change how much support a resolution must win—measured by the percentage of the shares voted—in order to be resubmitted in subsequent years. The proposal changes these thresholds from 3 percent (first  year), 6 percent (second year) and 10 percent (third and subsequent years) to 5 percent, 15 percent and 25 percent  Moreover, proposals that win more than 25 percent (but less than 50 percent) support may be excluded in a subsequent year if the support drops by 10 percent from the previous year’s level.     

The SEC’s second proposed rule would require proxy advisory firms to give the issuers they cover the opportunity to review and comment on the proxy advice before it is issued. It would also allow issuers to include a link to the issuers’ views when proxy advice is sent to recipients.

In response to these two proposals, Lisa Woll, CEO of US SIF, issued the following statement.

“The founding purpose of the Securities and Exchange Commission is to protect investors, but you would not know that by the two proposals the SEC approved today on a 3-2 vote.  One proposal severely limits the ability of individual and smaller institutional investors to file shareholder resolutions at the companies in which they invest.  The second would muffle the voices of independent proxy advisory firms.

Shareholder proposals are an important, cost-effective and market-based mechanism for retail and institutional shareholders to communicate with management teams, directors and other shareholders.  Today’s proposal transfers power to CEOs and company management at the expense of their shareholders.  Investors have not sought these changes; corporate trade associations have.  This is despite the fact that on average, only 13 percent of Russell 3000 companies received a shareholder proposal in any one year between 2004 and 2017. In other words, the average Russell 3000 company can expect to receive a proposal once every 7.7 years.

The new thresholds will make it significantly more difficult for investors to get critical issues on the meeting agendas of publicly traded companies. Time and again, individual investors, asset managers and institutional owners have raised an array of concerns at American companies to improve these companies and make them better investments over the longer term.  They have encouraged companies to diversify their boards of directors, to align executive compensation incentives with the long-term good of the company, and to reduce their greenhouse gas emissions.

Additionally, proxy advisory firms help investors meet their fiduciary responsibilities by providing efficient and cost-effective research services to them to inform their proxy voting decisions. We do not support giving companies the automatic right to preview proxy advisory firm reports and to lobby the authors to change recommendations.  These provisions will give corporate management substantial editorial influence over reports on their companies.   

The SEC should protect the tools and resources available to shareholders to help hold publicly traded companies accountable.” 

Additional resources

  • US SIF, the Interfaith Center on Corporate Responsibility (ICCR) and The Shareholder Rights Group launched the Investor Rights Forum (, a website to share data and research supporting the shareholder process.

  • US SIF delivered a letter to the SEC signed by 129 investors with total assets under management of $525 billion to oppose changes to rule 14a-8. To read the full letter, click here.

  • Investor organizations sent a letter to the SEC opposing new proxy advisor regulations. To read the full letter, click here.

NY State Comptroller DiNapoli Statement on Proposed SEC Rule Changes

"The SEC's proposals are two of the most significant actions to restrict shareholder rights in the SEC’s history. There is no credible evidence to support the need for these proposals, and if adopted, they would undermine corporate accountability, entrench managements’ opposition to shareholder proposals and increase costs for investors. These proposals are contrary to the SEC's mission to protect investors and our financial markets. Along with other investors, I will continue to voice my opposition to these actions and my support for greater corporate accountability."


Agency caves to pressure from trade associations like the Business Roundtable, U.S. Chamber, and National Association of Manufacturers to the detriment of shareholders and the public interest.

NEW YORK, NY, Tuesday, November 5, 2019 – Today’s 3-2, party-line vote by the Securities and Exchange Commission (SEC) regarding proposed changes to its shareholder proposal rule that would severely restrict investors’ access to the corporate proxy prompted a fierce rebuke from the investment community, the very constituency the SEC is designed to protect.

Members of the Interfaith Center on Corporate Responsibility say the new rules would stifle the voice of shareholders by substantially increasing the number of shares required to file proposals that appear on company proxies; doubling the thresholds necessary for the re-submission of those proposals in subsequent years; and restricting access to independent proxy advice.  As Commissioner Allison Herren Lee said in voting against these rule changes: “The odds are stacked against shareholders.”

 Presently, the SEC’s 14a-8 rule requires shareholders to hold $2,000 worth of stock for at least one year before they can file a resolution, an amount which ensures that small investors have the ability to place issues significant to the company before fellow shareholders.  The SEC is proposing to revise the rule so that shareholders must own this stake for a minimum of three years before they can submit a resolution. If they are shareowners for under three years, they must own up to a $25,000 stake in the company in order to file a resolution.  Moreover, the current thresholds for shareholder support required for the resubmission of proposals are currently 3% for the first year, 6% in the second year and 10% in the third year.  The new re-filing thresholds being proposed by the SEC would more than double those thresholds to 5%, 15% and 25% respectively.

Taken together, the rule changes would significantly weaken corporate accountability structures. Raising the ownership threshold threatens to exclude smaller investors, raising serious concerns about the equity of the process. Shareholders big and small can make and have made valuable contributions to the companies that they own.  Increasing re-submission thresholds could prevent critically important issues from being considered. There are many examples throughout the history of shareholder engagement of issues that initially received little support, but went on to receive majority support as shareholders came to appreciate the serious risks they presented to companies.

“For over 75 years, the shareholder proposal process has served as a cost effective way for corporate management and boards to gain a better understanding of shareholder priorities and concerns, particularly those of longer-term shareholders concerned about the impact of environmental, social, and governance issues on the long-term value of the companies that they own,” said Josh Zinner, CEO of the Interfaith Center on Corporate Responsibility. “We see this unjustified action by the SEC as part of a broader move across this Administration to realign the regulatory landscape in favor of corporate interests at the expense of the public interest.”

Timothy Smith, Director of Shareowner Engagement at Boston Trust Walden, who has been involved in the shareholder resolution process since the early 1970s stated, “The U.S. Chamber and Business Roundtable have led a steady drumbeat of attacks on shareholder advocates who engage with companies on key issues like climate change, claiming their work is politically motivated and they don’t care about the financial bottom line when these investors who represent literally tens of trillions of dollars in assets are simply seeking to protect their investments. Unfortunately, restricting investors’ use of the shareholder resolution process will only encourage the use of blunter tools like legal action and withholds on directors and say on pay votes to gain the attention of companies on key governance and environmental issues.” 

“While shareholders typically engage companies through direct dialogue with management, the shareholder resolution has been an important tool for investors to bring material issues to the attention of company boards and fellow shareholders,” said Susan Makos of Mercy Investment Services.  “Resolutions have contributed to companies addressing some of the most critical challenges of our time including climate change, where shareholders encouraged improvements to company disclosures of their environmental impacts and, as a result, more and more companies are adopting science-based targets to meaningfully reduce their GHG emissions. Other resolutions raise human rights risks and community health concerns, including oversight of opioids and the affordability of drugs, which have led pharma companies to improve their practices.”

The SEC has further proposed a regulatory structure that would undercut the relationship between investor clients and proxy advisory firms such as Institutional Shareholder Services (ISS) and Glass Lewis, with a goal to dramatically undermine the voices of shareholders and produce more management-friendly votes, particularly on matters such as executive compensation, and proposals on environmental, social, and governance issues. These provisions would tilt the scales of the process further in favor of corporate management, and have also long been advocated by pro-business trade groups like the Business Roundtable, the National Association of Manufacturers and the U.S. Chamber of Commerce.

About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 49th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300 member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs and other socially responsible investors with combined assets of over $500 billion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability.

CONTACT: Susana McDermott Director of Communications Interfaith Center on Corporate Responsibility



New York City Comptroller Scott M. Stringer on Proposed SEC Rule Changes

"As Comptroller for the City of New York, I am the chief investment advisor and custodian of assets of the five New York City Retirement Systems (NYCRS) and a trustee of four of them. These Funds represent the retirement security of the City’s teachers, school employees, police and firefighters, and other employees. Many of our more than 700,000 members likely only participate in the capital markets through their role as pension fund beneficiaries, and are the true main street investors whose interests the SEC should protect.

"The NYCRS are long-term shareowners of more than 3,000 U.S. public companies and are the fourth largest public pension system in the United States, with more than $200 billion in assets under management. Our funds have filed more than 1,000 shareowner proposals, almost certainly more than any other institutional investor in the world, with a record dating back 30 years.

"The proposed U.S. Securities and Exchange Commission changes will compromise the independence of our contracted proxy advisers, impose limits on shareowner proposals and therefore further insulate corporate management from accountability to shareowners. If implemented, these actions would be a shameful gift to corporate executives at the expense of shareowners.

"The proposed rules seek to remedy problems that do not exist but are merely false narratives put forward by corporate executives who want to limit the ability of investors to push for change and to hold them accountable for runaway CEO pay, excessive risk taking and irresponsible and harmful business practices.

"These are mechanisms through which we and other shareowners have pushed for anti-discrimination policies, greater diversity in the C-suite, better climate policies and improved transparency and accountability in our interests as long-term investors. We should be demanding more of this, not less."


Sanford Lewis, Director, Shareholder Rights Group

 The proposed rule change  shifts power  to corporate managers and boards, and away from shareholders, especially smaller shareholders who arguably have the most need to file shareholder proposals. We have not yet seen the actual text of the proposed rule, but what we are able to discern from the discussion today, we have the following comments.

The filing threshold requirements skew the process to disempower small shareholders. Now holding shares for just a year would require, instead of $2000, over $25,000 in a company.  This is is obviously not a ”retail investor level”  of shareholding –  shifting the filing level to larger investors who are less likely to file proposals and to innovate.  Moreover, without explanation, the filing threshold requirements creates a draconian provision – preventing shareholders from joining  their shares together (aggregating)  to file a proposal.

The resubmission threshold requirements stifle the introduction of new ideas by creating a  much steeper voting on-ramp for proposals to garner support. The prior rule was 3%  support the first year, 6% the second year and 10% the third year. The new rule is 5% the first year, 15% the second year and 25% the third year.  We know from historical records that this would bar out proposals addressing emerging ideas. It takes institutional investors in particular  time to study and set guidelines to support new proposals and ideas. An example is Netflix where a proposal  for proxy access got 4.4% the first time it was voted on and then a majority vote the second year. This would have been excluded under the new thresholds.

Contact: Sanford Lewis 413 549-7333Sanford Lewis, Director, Shareholder Rights Group


Public Citizen: Trump’s SEC Chief Cements Anti-Investor Legacy

Note: Today, the U.S. Securities and Exchange Commission (SEC) proposed new restrictions on shareholders who submit resolutions to companies where they’ve invested, raising the ownership and resubmission thresholds. Commissioners Robert Jackson and Allison Lee opposed the proposal. Chair Jay Clayton and Commissioners Hester Peirce and Elad Roisman supported it.

“It’s no secret that many corporate captains loathe shareholders who raise questions at annual meetings. But Congress created the SEC to protect shareholders, not coddle thin-skinned C-suiters who dislike being questioned. No shareholder asked for these new limits. Instead the pressure on the SEC comes from giant corporations and trade associations like the U.S. Chamber of Commerce and the Business Roundtable.”

·         Lisa Gilbert, vice president of legislative affairs

“Clayton has cemented his legacy as an antagonist to investors by tightening the rules on shareholder activism. Shareholder resolution rules should be reformed, but in a way that provides greater latitude, not less, for engagement by the investors who own the company. We commend Commissioners Jackson and Lee for standing on the right side of fairness.”

·         Bartlett Naylor, financial policy advocate

Contact: David Rosen,, (202) 588-7742
Angela Bradbery,, (202) 588-7741


AFL-CIO: Trump’s SEC Chairman Proposes to Disenfranchise Investors and Reduce Shareholder Democracy by Curtailing the Shareholder Proposal Rule - Brandon Rees

In a partisan 3-2 vote, the Trump administration’s Securities and Exchange Commission (SEC) proposed to curtail the rights of investors to file proposals for a vote at company annual meetings. If adopted, these changes will hinder shareholder proposals by union members and their pension plans to hold corporate management accountable.

"We strongly oppose the SEC's shareholder proposal rule changes that will limit the ability of working people and their pension plans to have a voice in the companies that we invest in," said AFL-CIO President Richard Trumka (UMWA). The proposed changes include dramatic increases in stock ownership requirements and vote resubmission requirements.

Corporate CEOs of the Business Roundtable and the Chamber of Commerce have long wished for these changes to the shareholder proposal rule. In a 2017 letter to the SEC, the AFL-CIO showed how these proposed rule changes will undermine efforts to increase corporate responsibility for environmental, social and governance issues.

"The right to petition corporate management by filing shareholder proposals is an integral part of shareholder democracy in the United States,” Trumka explained. “The SEC should protect the rights of working people as the real main street investors, not the interests of overpaid and unaccountable corporate CEOs."


Council of Institutional Investors: Fact Sheet on Proxy Advisory Firms and Shareholder Proposals Nov. 5, 2019

1. The Business Roundtable, National Association of Manufacturers and other

management groups’ claim that proxy advice is rife with errors is based on anecdote not evidence.

·      The SEC comment file for the SEC’s Nov. 15, 2018, proxy roundtable includes a number of letters that assert that errors in proxy reports are endemic. But the letters offer very few examples and most of those do not identify the company and cannot be checked. CII believes most claims of errors actually are methodological differences.

·      The only study that CII is aware of that purports to tote up proxy advisor errors alleges just 39 factual errors over nearly three years (or 0.1% of more than 30,000 reports by leading proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis during that period). And the study inflates the claimed error rate. CII’s own analysis of the study found that no more than 17 of the claims of factual error had merit.

·      CEO and board member dislike of proxy advisors appears driven by discomfort with the role of proxy research to be critical and raise questions. The charge of systemic factual error appears to be fabricated as a means to quash critical analysis and commentary.

2. Claims that proxy advisory firms wield excessive influence over how institutional investors vote confuse correlation with causation.

·      Many pension funds and other institutional investors buy proxy and review advisors’ research and recommendations but vote according to their own guidelines and policies. According to ISS, 85% of its top 100 clients use a custom voting policy.

·      It is wrong and insulting to suggest that institutional investors “robo vote”—vote in lockstep with proxy advisor recommendations. While ISS recommended voting against say-on-pay proposals at 12.3% of Russell 3000 companies in 2018, just 2.4% of those companies received less than majority shareholder support on their say-on-pay proposals. In 2019, Glass Lewis recommended in favor of 89% of directors and 84% of say-on-pay proposals, while directors received average support of 96% and say-on-pay proposals garnered average support of 93%.

·      Academic research has found that while both ISS and Glass Lewis appear to have some impact on shareholder voting, media reports often substantially overstate the extent of that influence.

3. The proposed mandate that proxy advisory firms let companies review the firms’ reports before investor clients see them amounts to unprecedented interference in the free market and is the opposite of what is required by regulation of stock analyst reports.

·      Current rules prohibit analysts from sharing draft research reports with target companies, other than to check facts after approval from the firm’s legal or compliance department.

·      FINRA Rule 2241, which the SEC approved, establishes this safeguard to, as the SEC has explained, “help protect research analysts from influences that could impair their objectivity and independence.”

·      If the SEC adopts its proxy advisor regulation, an analyst and a proxy advisor could write a report on the same company and the analyst would violate securities laws by showing it to the company in advance, while the proxy adviser would violate the law if it did not show it to the company in advance.

·      This is the very definition of arbitrary and capricious government action.

4. Three SEC commissioners are attempting to jam through fundamental changes without appropriate analysis and public comment.

·       The predicate for the SEC’s new, heavy-handed regulatory structure for proxy advisory firms is a significant change made by the SEC on Aug. 15, 2019, on a 3-2 vote, without any public comment, zero cost-benefit analysis and limited and flawed legal justification.

5. Shareholder proposals have proven to be a key channel for effective shareholder engagement with public companies for more than half a century.

·      Shareholder proposals permit investors to express their voice collectively on issues of concern to them, without the cost and disruption of waging proxy fights.

·      Shareholder proposals have encouraged many companies to adopt governance policies that today are viewed widely as best practice.

o   Electing directors by majority vote, rather than by plurality, a radical idea a decade ago when shareholders pressed for it in proposals, is now the norm at 90% of large-cap U.S. companies.

o   Similarly, norms such as independent directors constituting a majority of the board, independent board leadership, board diversity, sustainability reporting, non-discrimination policies and annual elections for all directors all were advocated early through shareholder proposals.

·      Shareholder proposals are a critical tool for expression of the collective views of holders, permitting them to communicate with each other as well as the company on whether an issue or approach has support. Another tool is voting against directors, but the message from negative voting on directors when the concern is a specific policy or disclosure is much less focused or clear.

6. Shareholder proposals are not a significant burden to U.S. public companies.

·      Shareholder proposals are almost always non-binding. The board actually does not have to do anything in response to a proposal.

·      Most public companies do not receive any shareholder proposals. On average, 13% of Russell 3000 companies received a shareholder proposal in a particular year between 2004 and 2017. In other words, the average Russell 3000 company can expect to receive a proposal once every 7.7 years. For companies that receive a proposal, the median number of proposals is one per year.

·      Companies exaggerate the cost of shareholder proposals. Most of the cost involves attempts by management to exclude proposals from their proxy statements, which is a choice made by management. The cost to put a proposal on the proxy ballot is de minimis.

·      CEO advocacy organizations say that shareholder proposals keep private companies from doing an IPO, an unsupportable and fact-free assertion. It is ludicrous to argue that a board would forgo access to public capital markets because in the next eight years the company may face a nonbinding shareholder proposal requesting better disclosure on its carbon footprint or the annual election of all directors.

7. Additional curbs on shareholder proposals are not needed.

·      Raising resubmission thresholds will stifle new ideas and issues, which typically take time to gain traction with investors.

·      The raised resubmission thresholds will keep topics off corporate ballots for years, even though circumstances may change at a company (e.g., independent board leadership tends to be seen as much more urgent when a company is in crisis, and the proposed new thresholds are likely to bar a proposal to separate the roles of CEO and chair at companies with the worst governance records).

·      The increased ownership thresholds will especially hamper small investors, the very market participants that SEC Chairman Jay Clayton has made it a priority to protect.

·      Until 1983, ownership of a single share of stock carried the right to propose a shareholder resolution. Now we are on a slippery slope that strips that right from more and more small shareholders, whose ideas can be as important and valuable to consider as those of larger holders.

AS YOU SOW: As Shareholder Support for Climate Change and other Environmental, Social, and Governance Issues Grows, SEC Votes to Restrict Shareholder Voice

BERKELEY, CA—NOV. 5, 2019—The U.S. Securities and Exchange Commission (SEC), led by Chairman Clayton, voted today to severely limit the rights of shareholders, especially small shareholders to file proposals at companies. The SEC 14a8 process was created to ensure that shareholders have the right to seek transparency and disclosure from companies or raise significant policy issues that can create risk or harm company value over time. Such proposals, which are advisory and not mandatory even with 100% of the vote, have the goal of raising critical issues in front of management, boards, and company shareholders. Today’s draconian vote, split along party lines, would limit investor rights in ways that are incompatible with the basic premise that shareholders are owners of companies and should have a voice in the companies they own. 

“With this vote, the SEC has apparently inverted its mandate of protecting shareholders to that of protecting companies from shareholder input — even where company action creates increasing risk to shareholders, people, or the environment,” said Andrew Behar, CEO of As You Sow. “This proposal flies in the face of the SEC’s mandate of ensuring transparency, open discussion, and company responsiveness to shareholder concerns.”  

Shareholder proposals have served an important role in bringing cutting edge issues to the attention of management and boards, informing shareholders of growing risk, and increasing productive discussion of significant policy issues — in short, increasing transparency and shedding light on company actions. “Shareholders and companies have been well served by this process over the years; allowing company actions to fall back into the shadows is a giant step backward for all,” said Behar.  

Climate proposals are an important example of how shareholders have successfully used the process to flag the growing risk to companies and investors of inaction on climate change. Shareholder proposals have shined a light on the importance of climate change; highlighted the risks of inaction; underscored opportunities for responsive companies; flagged lead actors and lagging companies; and ensured that the market is appropriately addressing growing systemic climate risk. 

“The SEC has been unable to point to any demonstrable problem with the current shareholder system or make a case for how its proposal to limit shareholder rights will improve company value,” said Danielle Fugere, president of As You Sow. “To the contrary, this proposed rulemaking has the potential to increase shareholder and company risk, particularly regarding growing climate concerns. We don’t believe that it will withstand public or legal scrutiny.” 

# # #

As You Sow is a nonprofit organization that promotes environmental and social corporate responsibility through shareholder advocacy, coalition building, and innovative legal strategies. See our resolutions here.

MEDIA CONTACT: Stefanie Spear,, 216-387-1609


James McRitchie: A Gadfly on SEC “Modernization” of Shareholder Proposal Rule

The changes would significantly reduce the spread of best practices generated by proposals submitted by “gadflies” like myself. Chairman Clayton seems to believe we file unpopular costly proposals. Untrue. My proposals averaged more than 50% support this year. See 

Due to the increased thresholds for submission or increased waiting period, my wife and I would have to wait an extra year or two before filing most of our proposals. We have held about half of the 150 company investments in our portfolio for less than 3 years. Since we have a diversified portfolio, we have less than $15,000 in each of our newer investments. As a result, adoption of best practices would take longer… unless CalPERS and others file at hundreds of additional companies each year. 

The Never-Ending Quest for Shareholder Rights: Special Meetings and Written Consent by Emiliano Catan and Marcel Kahan found:

Out of the 114 firms in our sample that granted that power over 2005-2017, 80% had received a precatory proposal. Relatedly, 84% of the unique firms that received at least one shareholder proposal asking for the right to call special meetings had granted their shareholders that right by the end of 2017…

The proposals were almost exclusively filed by individuals (as opposed to pension funds or other institutional investors). Remarkably, close to 90% of the proposals were filed by members of four families (the Chevedden family, the Steiner family, the Young-McRitchie family, and the Rossi family).

Higher resubmission thresholds are often recognized as problematic for environmental and social proposals, but they will also be problematic for governance proposals, such as the ones we usually file. For example, it took years of submissions and many low threshold votes to reach “consensus” around the terms of poxy access proposals. Many resubmissions would have been prohibited under the proposed rule. The spread of proxy access provisions, now in place at more than 70% of S&P 500 companies and a near majority of the Russell 1000, would have been delayed if the proposed rule had been in place.


The proposed rule would also hit us hard with procedural nightmares limiting our ability to coordinate submissions and by requiring that we keep our calendars open for the convenience of companies, rather than making normal appointments for negotiations.  

Companies are allowed to use the same outside counsel for filing more than one no-action request. I do not see why shareholders should be prohibited from using an agent who has also filed a proposal or has filed a proposal on another’s behalf. The “one proposal” rule should be called the “Chevedden Amendment,” because it is specifically targeted at one individual and those who work with him. Shareholders may have to seek a “Gibson Dunn Amendment” aimed at cutting down the number of companies any single law firm can represent.

With regard to negotiations, I am always happy to negotiate with companies. For example, I have filed a proxy access proposal at Apple for several years to bring them into best practices with regard to the standard “20% or two, whichever is higher” provision regarding the number of nominees. Apple has never been willing to negotiate. I have no problem being available via teleconference 10-30 days after submission of a proposal but it would be unduly burdensome to commit in advance to keep specific days and times open in advance, especially when I have no commitment from a company they are even willing to engage in discussion.

Reality Check: SEC Proposal to Amend Rules is Harmful and Unnecessary

The Securities and Exchange Commission (the “Commission”) on November 5, 2019 proposed rule changes regarding the shareholder proposal process, driven by a well-funded disinformation campaign by the Business Roundtable (BRT), National Association of Manufacturers and U.S. Chamber of Commerce (“Chamber”). Below we provide a reality check on the myths and materially misleading interpretations and statements being proliferated by those organizations.

Myth: The shareholder proposal process is costly or distracting.

Reality: The shareholder proposal process is one of the least costly ways of alerting companies and their investors to emerging issues and improving governance.

Most shareholder proposals seek to warn a company and its investors about emerging issues relevant to the firm’s long-term sustainability, and/or to improve governance, disclosure, risk management or performance. The evidence strongly supports the market’s conclusion that such actions are value creating, and can provide an early warning of issues that may portend bankruptcy or lost opportunities.

•   A study of climate change disclosures, one of the most common issues raised in shareholder proposals, shows that engagement through the shareholder proposal process improved companies’ disclosure of climate change-related issues, and that such climate change disclosures increased market valuation of those companies.[1] A recent study[2] that looked at 847 engagements with 660 companies around the globe over a decade (2004-2014) found that successful engagements — those that did improve environment, social and governance (ESG) performance — were correlated with higher sales growth without changing profitability. Moreover, a portfolio of firms that were engaged by shareholders outperformed a matched portfolio of companies that were not engaged by 4.7 percent. 

Another study[3] which examined 2,152 ESG engagements at 613 publicly traded firms over a decade (1999-2009), also found that the companies that were the subjects of these engagements had higher abnormal returns of around 1.8 percent during the year following the engagement, and the successful engagements were associated with higher abnormal returns of 4.4 percent over the following year (and zero for the unsuccessful ones).

•   The Commission’s shareholder proposal rules, including recent staff implementation, have stringent regulatory guardrails to prevent proposals from diverting attention to trivial matters. In particular, the recent emphasis on requiring the topic of a proposal to be relevant and “significant” to a company prevents a trivial proposal from surviving the no-action process.

•   The shareholder proposal process is far less costly than alternative processes for raising similar issues. When shareholders are unable to effectively engage investee companies using proposals, they are required to fall back on other strategies including voting against directors, lawsuits, books and records requests, litigation, and requests for additional regulations.

•   The Business Roundtable has dramatically exaggerated the cost to companies. This includes efforts to exclude proposals, as well as the costs of publication and opposition to a shareholder proposal. Any costs associated with seeking the exclusion of shareholder proposals through the SEC’s no-action process are voluntary expenditures by companies.

•    In the end of the process, most proposals are advisory in nature.  Even if a proposal’s recommendations are supported by a majority of shareholders, the board and management are not legally mandated to take any action in response.

Myth: The shareholder proposal process has run amok.

Reality: The shareholder proposal process is working steadily, within guardrails provided by SEC Rules. It is an effective tool for protecting investor interests, as reflected in rising levels of voting support for environmental, social and governance proposals.

•  The number of proposals or resubmissions has not increased in a manner that justifies a rulemaking. There is no surge in shareholder proposals filed, resubmitted or voted upon. According to Broadridge[4]  the number of shareholder proposals submitted for a vote in 2019 was the lowest in the last five years: from a high of 549 in 2015 to 420 in 2019. The number of environmental and social proposals put to a vote rose slightly from 110 in 2018 to 115 in 2019.

•  The most significant change in recent years is a surge in voting support by investors for both governance and environmental or social issue proposals. The success of the existing shareholder proposal process in providing opportunities for investors to support improved corporate governance and performance on social and environmental factors is a poor justification for a rulemaking to constrain the process.

• The number of proposals filed by so-called “gadflies” – individuals who file multiple proposals on corporate governance – are at a historical low. The proportion of proposals filed by these shareholders has fallen from near 100% in the 1950s when the shareholder proposal rule was first instituted, down to 30% of proposals filed in 2019. The proposals filed by small shareholders catalyze valuable changes that benefit the company and all shareholders. Improved governance systems have been implemented by hundreds of companies and even adopted as SEC rules. Many large asset owners and managers who never file shareholder proposals vote in favor of environmental, social, and governance proposals filed by smaller shareholders.

Myth: Proxy statements are packed with unsupported “zombie” proposals re-filed despite opposition by investors.

Reality: Few proxy statements contain poorly-supported proposals repeated year after year.

The existing rules require that a new shareholder proposal win at least 3% voting support to be reintroduced after it has been voted on. To be reintroduced a second year requires a 6% vote in favor, and after a third year, requires a 10% vote. The BRT and Chamber have advocated a sharp increase in these thresholds -- 6% the first year, 15% the second year, and 30% the third year.

• In practice the BRT proposed thresholds, under consideration by the Commission,  would have barred numerous successful proposals in recent years from the opportunity to win support. Proxy access provides an illustration. A proxy access proposal, (granting investors the right to nominate board directors to appear on the proxy) received 4.4% support the first year it was filed at Netflix (2013), but won a majority vote when refiled two years later (2015). The Board finally enacted proxy access in 2019. The same patterns applied at Cisco and Citigroup, where support jumped significantly from below 6% when the proposal was first filed (2014: 5.4% Cisco, 5.5% Citigroup) and then winning huge a majority of support in a second filing (2015: Cisco 64.7, Citigroup 86.9%). Cisco adopted proxy access in 2016, and Citigroup in 2019.

•  The change in thresholds would undermine the ability of shareholder proposals on emerging issues to gain support over time. From 2011-2018, shareholders re-filed only 74 proposals (out of thousands of proposals) that had garnered less than 6% support at their first presentations at annual meetings. Eight of those 74 proposals, or roughly 10%, earned substantially larger support the second time they were submitted, including several that achieved majority support when submitted a second time. The continuation of a total of 74 proposals during this timeframe in order to allow 10 of them to garner significant support is not inappropriate; it represents a functional marketplace of ideas.

• Many proposals that garnered substantial support upon re-filing would have been excluded if the second and third year thresholds were raised to 15% and 30%. Among governance proposals from 2011 to 2018 this includes: six for an independent board chair (UMB Financial, American Express, AutoNation, Chevron, Wendy's, and KeyCorp), twelve proposals seeking disclosure of political contributions or lobbying payments (Wynn Resorts, Allstate, Republic Services, Nike, FedEx, Express Scripts, Charles Schwab, IBM, Citigroup, Verizon, UnitedHealth Group, and Devon Energy), three proposals urging One Share One Vote (Alphabet, United Parcel Service, and Telephone and Data Systems).  Shareholders who were prepared to support these proposals upon the re-filing would have been denied their rights to do so if re-filing thresholds had been increased, especially if third year resubmission thresholds exceeded twenty percent.[5]

•  The corporate trade associations assert that proxy statements are crowded with “zombie” proposals rejected by shareholders year after year. But in reality, submissions of proposals for a third or fourth time are very rare. From 2011-2018, shareholders resubmitted environmental and social issue proposals only 35 times after receiving votes under 20% for two or more yearsOver this past decade, this affected only 26 companies. Only one third of the proposals that received less than 6% support when submitted the first time were resubmitted a second time. This small number of resubmissions does not justify a rulemaking or change in the resubmission threshold.

•   Poorly performing proposals are already screened out by the current thresholds.  In 2019 shareholders consistently provided less than 3% support to proposals seeking an ideological litmus test for board members at Discovery, Starbucks, Apple, Twitter and Amazon. Shareholders at Exelon similarly rejected a proposal to “burn more coal” with only 1.6 percent support. Investors also rejected a request to report on how Gilead Sciences spent its share of the federal tax cut, a proposal that earned only 2.2%. These proposals would be barred from resubmission.

Myth: The viability and legitimacy of shareholder proposals can only be evaluated according to whether they are supported by a majority of shareholders.

Reality: Productive shareholder engagement enabled by the proposal process allows good ideas to emerge and improve company disclosure and performance.

Minority shareholders filing proposals often introduce new ideas that encourage improvements to governance, risk management, disclosure, and performance at their companies through effective engagement.   According to the Interfaith Center on Corporate Responsibility (ICCR), about one third of ICCR member proposals are withdrawn because they produce effective engagement. Part of that engagement is dependent on the ability of shareholder proponents to persist for a second or third year, if necessary, to continue engaging with board, management and fellow investors.

Myth: Silencing the voice of a significant minority of investors in the shareholder proposal process would pose no harm to companies and their investors.

Reality: The minority voice in company governance often identifies emerging risks and prevents board and management from jeopardizing a company’s future.

Shareholders that in aggregate account for 3% or 6% of voting investors may hold a significant view that proves accurate and prescient in identifying company risks. For example, 5% of Monsanto investors supported a proposal to require the company to assess the looming public health risks of its product glyphosate; within a few years, it appeared that the liabilities associating glyphosate with cancer causation are expected to drive Monsanto’s purchaser, Bayer, into bankruptcy. [6]

 Myth: Raising the filing or resubmission thresholds would constitute “modernization” of the proposal process to reflect current times.

Reality: Current market conditions justify keeping or even lowering current thresholds.

Modern conditions that did not exist when the shareholder proposal rule was initially adopted do not merit raising the filing or resubmission thresholds. In fact, modern market conditions merit lowering the bar for filing and for resubmission.

•  The average holding period for stocks has shrunk. Whereas in the 1950s, investors bought and held for decades, by 2004 average holding period was 6 months. Even passive investors experience significant annual turnover of their portfolios. According to one study, half of the companies in the S&P 500 Index are expected to be replaced over the next decade due to mergers and acquisitions and other changes in the index constituents.[7]

•  Encouragement of diversified portfolios is contrary to higher filing thresholds. The current threshold requires a shareholder to maintain at least $2,000 in shareholdings in order to be able to file proposals. This places the opportunity for filing of shareholder proposals within reach of an individual with average holdings. But, increasing the amount of shares to be held would conflict with the goal of ensuring that Main Street shareholders seeking active engagement also maintain a diversified portfolio by limiting the number of companies in a small shareholder’s portfolio.[8]

 • The growth in multi-class share ownership distorts vote counting. Undoubtedly, if the CEO, board, and other insiders oppose the proposal, they will vote against it. In many cases where companies have multi-class share structures, company insiders represent a majority percent of the vote (while owning far less in economic stake of the company). A shareholder proposal opposed by management at multi-class companies may never have a fair opportunity to reach threshold vote levels. For example, the 2018 shareholder proposal at Alphabet (which has three classes of stock including an insider class with ten votes per share) seeking to “Give Each Share an Equal Vote” garnered 28% of the overall vote after being resubmitted for several years. However, the filer of this proposal estimates that 87% of non-insider votes supported the proposal.

 A Fact Sheet of the  Shareholder Rights Group and  Interfaith Center on Corporate Responsibility 

[1] Caroline Flammer, Boston University, Michael W. Toffel and Kala Viswanathan, Harvard Business School, Shareholder Activism and Firms’ Voluntary Disclosure of Climate Change Risks, October 2019.

[2] Tamas Barko, Martijn Cremers, Luc Renneboog, “Shareholder Engagement on Environmental, Social and Governance Performance,” European Corporate Governance Institute, September 5, 2018.

[3] Elroy Dimson, Oguzhan Karakas, Xi Li, “Active Ownership,” June 4, 2013.


[5] Brandon Whitehill, Clearing the Bar: Shareholder Proposals and Resubmission Thresholds, CII Research and Education Fund, November 2018.

[6] Sanford Lewis, Shareholder Proposals at Monsanto Were Warning of Troubles Ahead for Bayer's Acquisition,

[7] Scott Anthony, et. al, “2018 Corporate Longevity Forecast: Creative Destruction is Accelerating,” Innosight, February 2018.

[8] Christine Jantz, “Considering the Effect of Filing Thresholds on Main Street Investors”, Sept. 2019.

SEC's Misdirected Approach to Micromanagement

The SEC published Staff Legal Bulletin 14K on October 16, 2019. We appreciate the publication of these guidance documents, and believe the Bulletin in many aspects provides helpful clarifications that may reduce the number of misdirected no action request filed by issuers.

However, we are troubled by a problematic passage which solidifies the Staff's controversial new approach to micromanagement, an approach which led to exclusion of important climate change proposals in 2019, including at Exxon Mobil:

[ w]e look to whether the proposal seeks intricate detail or imposes a specific strategy, method, action, outcome or timeline for addressing an issue, thereby supplanting the judgment of management and the board.… Following a successful vote on a shareholder proposal, management and the board generally consider whether and how to implement the proposal. Notwithstanding the precatory nature of a proposal, if the method or strategy for implementing the action requested by the proposal is overly prescriptive, thereby potentially limiting the judgment and discretion of the board and management, the proposal may be viewed as micromanaging the company.

This language appears inconsistent with, and a clear deviation, from other language that appears in a note to the Rule which states quite clearly that most proposals will be acceptable (not unlawfully interfering with the business judgment and discretion of the board or management) as long as they are framed as advisory proposals. The Commission established in the Note to Rule 14a-8(i)(1), that: 

Depending on the subject matter, some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders. In our experience, most proposals that are cast as recommendations or requests that the board of directors take specified action are proper under state law.

It is hard to reconcile this language with the new interpretation of micromanagement.  We continue to believe that the Staff has taken an unfortunate turn in its interpretations of micromanagement, and we will continue to advocate for a reversal of this new policy.

Sanford Lewis
Director, Shareholder Rights Group

Heidi Welsh, Sustainable Investments Institute, 2019 Data on ESG Shareholder Proposals.

The number of shareholder resolutions filed by at U.S. companies on the environmental, social and sustainability impacts of corporate activity has grown by 11 percent in the last ten years, increasing from 407 in 2010 to 454 in 2019. At the same time, average support has increased 40 percent, rising from about 18 percent to nearly 26 percent.

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Christine Jantz: Considering the Effect of Filing Thresholds on Main Street Investors

On May 8, 2019, SEC Chairman Jay Clayton testified to the Senate that “[o]ur first goal, which has been a priority of mine since I became Chairman, is focusing on the interests of our long-term Main Street investors.” He went on to say that “the question we ask ourselves every day: how does our work benefit the Main Street investor? Each proposal or action we take is guided by that principle.”[1] [emphasis added]

Perhaps one of the most important benefits of owning stock in a U.S. publicly traded corporation is the opportunity to engage that company as a part-owner. For decades, Main Street investors have had the mechanism of the shareholder proposal process to communicate with company management when they see a problem, identify inefficiencies, or are displeased with how the company has spent investor dollars.

Clayton also stated that:

Main Street investors’ continued participation provides the lifeblood for our capital markets, as at least 52 percent of U.S. households are invested directly or indirectly in the capital markets... This level of retail investor participation stands out against other large industrialized countries. [emphasis added]

Despite Clayton’s avowed intention to protect and support Main Street investors, the SEC is considering changes to the shareholder proposal process. Because changes to this process risk increasing the cost and difficulty for investors, we examined the current SEC rules for filing shareholder proposals as it applies to such Main Street investors.

For Main Street investors that wish to be actively engaged owners, the right to file shareholder proposals is a valuable element of the bundle of rights associated with share ownership. Retail investors often hold shares in companies with a goal of long-term value creation and with the capacity to engage through the shareholder proposal process should it prove to be necessary.

While SEC rules provide a minimum holding requirement in order to preserve the right to file shareholder proposals, the need to retain a diversified portfolio is also an important consideration for the same Main Street investors.

SEC Rule 14a-8 (“the Rule”) requires that “to be eligible to submit a proposal … the shareholder to have continuously held at least $2,000 in market value” for a year before the filing deadline. However, given the possibility of rising and falling stock prices throughout the course of a continuous year, investors interested in engaging investee companies need to hold more than the bare minimum to act as a buffer against falling below the requirement. Is one dollar over than the minimum enough? Not even close. Two dollars? Still no. The exact determination of how much buffer is needed in order to prevent falling below the minimum threshold over the course of a year is not static. In years in which stock prices are rising in general and company prospects are good, not as much buffer will be needed to weather the ups and downs of daily stock movements.

During recessions, however, when markets are falling and company projections are lower, guarding against steep drops in stock value requires a bigger buffer to avoid falling below the $2,000 minimum. While the most recent U.S. recession “wasn't the greatest percentage decline in history,” it does help to establish buffer requirements. By March 5, 2009, it had dropped more than 50%.[2] As a rough rule of thumb, holding double the minimum requirement would protect against a drop to 50% value or less, giving investors effectively a 100% buffer for a significant drop in stock price throughout the year.

While $2,000  (or even  with a buffer at $4000) may at first seem like a small sum, we believe that for a typical Main Street investor also seeking to keep a diversified account, this existing minimum can present quite a hurdle.

For example, the age cohort with the highest median retirement account (of $126,000) is 65 to 74 years old.[3] Given that the shareholder must hold at least $2,000 in a company stock continuously in order to bring a shareholder resolution, and leaving a 100% buffer for a significant drop in the stock price during the year, we can assume that an investor with a $126,000 portfolio could hold at most 32 stocks.

Therefore, we can see that for the Main Street investor who wants to engage investee companies, this situation poses a problem with holding and maintaining a diversified portfolio. In order to exercise her right as a shareholder that seeks to engage investee companies, the $2,000 holding minimum (with a 100% buffer, bringing the minimum to $4,000) severely limits diversification options. In order to hold enough stock to engage each company she owns, the investor would have to heavily weight her portfolio to a small number of equities – a significant risk for many investors, especially Main Street investors that may have limited other savings.

To elaborate, the investor might follow the SEC guideline for diversification by ensuring that no stock position be greater than 5% of the equities in the portfolio—a minimum of 20 stocks needed to qualify as a diversified portfolio. Given the likely need for this same portfolio to also be diversified between bonds, mutual funds, and other forms of holdings, with this $2,000 threshold ($4,000 with 100% buffer) and the 5% maximum requirement, the Main Street investor of median holdings would need to hold at least $80,000 in equities. With $126,000 in her account, her equity portion (20 stocks) will equate to 63.4% of her total portfolio.[4]  For many Main Street investors, holding more than 50-60% of one’s assets in equities and so few names is too risky.  Thus if the investor seeks to engage investee companies, she might not be able to hold enough of each stock to remain diversified and engage those companies. The average retail investor would find it nearly impossible to both maintain a diversified portfolio to hedge against risk and to also hold enough stock continuously in order to engage the portfolio of companies in which she is invested.

Given Chairman Clayton’s stated focus on Main Street investors, it is unfathomable that the SEC would increase the filing threshold for shareholder proposals as it would conflict with the goal of ensuring that Main Street shareholders seeking active engagement also maintain a diversified portfolio. The Rule should not become more stringent; if anything, our examination illustrates that if the SEC seeks to support and encourage Main Street investor participation in the public markets, then the filing threshold should be relaxed to allow greater participation of the Main Street investor.

Christine Jantz, CFA®
Jantz Management LLC
Responsible Quantitative Value Investing TM

[1] SEC Chairman Jay Clayton’s testimony, May 8, 2019, to the “Financial Services & General Government Subcommittee of The U.S. Senate Committee on Appropriations.”




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Investors to SEC: "Rescind New No-Action Policy"

We recommend that the Division rescind the policy and retain the process that has worked reasonably well for decades. The number of no action requests processed by the Staff has not increased, and thus this change does not seem merited. In the event that the SEC does not rescind the new policy, we offer the following suggestions to reduce the level of uncertainty and conflict resulting from the new approaches….

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Shareholder Rights Group: Chairman Clayton, Please stand up for our rights

October 25, 2019 

The Honorable Jay Clayton
US Securities and Exchange Commission
100 F Street, N.E.                               
Washington, D.C. 20549

Re: Potential Rulemaking on Shareholder Proposal 
Filing and Resubmission Thresholds        

Dear Chairman Clayton, 

We are writing to you, as some of the leading proponents of shareholder proposals, to urge you to truly take a stand for retail and Main Street investors by resisting current efforts to curtail our rights to file proposals. Your recent public remarks raise new concerns for us that you may be on the verge of succumbing to that pressure.  We learned today in a report by Reuters and FT, that it appears that the Commission may be poised to vote on proposed rule changes on November 5.

Please don’t silence retail investors by rigging the rules against us

In a September 24 House Financial Services Committee Oversight hearing, you publicly stated that you “don’t like it that 25 or 30% of proposals are filed by a few proponents.” The implication seemed to be that you are looking to adjust the thresholds for shareholder proposal filing and resubmission to reduce or curtail the ability of the “few” proponents to file proposals.

Given your focus on protecting the rights of retail and Main Street investors, this leads us to believe that you may have been misled by the advocates for amendments to the shareholder proposal rule. Therefore, we are writing to correct a number of misperceptions implicit in this statement and to ensure that the Commission has adequate information before initiating an unnecessarily costly, contentious and harmful rulemaking.

The filing of a significant portion of proposals by a few individual proponents is neither new, nor unsupported by fellow investors. In fact, the 14a-8 proposal process, since its inception, has always had the effect of empowering a few shareholders who have made it part of their investing strategy and mission to improve the governance of the companies in which they invest. From the 1950s onward, there were active shareholders with limited stock holdings like the Gilbert brothers and Wilma Soss who pressed for sensible and practical governance changes by companies through the proxy process. Over time, many of the changes they sought were implemented and even adopted as SEC rules. Compared with historical numbers, the proportion of proposals currently filed by so-called gadflies, the active corporate governance proponents, has fallen from 100% when the shareholder proposal rule was first instituted, down to 50% some years ago, and to 30% today.

What has changed over these years, and the reason we believe you are under pressure to suppress the “gadflies,” is that gadflies are winning much more support for their proposals. Large numbers of mainstream, institutional, and values or faith based investors are voting in favor of those proposals, very often leading to majority support or higher. [1] Disrupting such productive corporate governance engagements is not in the best interest of the investing community or the capital markets.


You stated in the House Financial Services Oversight hearing: “What will the new threshold be? We are working on it, but in an ideal world it’s a threshold that has access for a long term investors in the company and have a meaningful stake at a personal level." We believe the existing thresholds accomplish exactly that goal, and do not merit a rulemaking to make changes.

Significantly elevating the filing or resubmission thresholds would not just affect the “gadflies,” it would hobble a wide array of investors who are raise risk management and governance issues with their investee companies and achieve significant progress through both voting and engagement. The ownership thresholds of the current rule are relevant to many of our organizations and funds which promote other governance or ESG proposals. Our proposals for ESG disclosure and performance improvement have also seen a significant spike in voting support among investors. This is in alignment with the general interest of the investing community in ESG investing strategies and disclosure.[2]

Our concerns about specific threshold changes

We understand that one proposal pending before the Commission would significantly raise the required number of shares, or the holding period, needed to file a proposal. Raising the threshold significantly would prevent small diversified shareholders from participating in the shareholder proposal process. If you lead the Commission to increase the filing threshold significantly, you risk depreciating the bundle of rights associated with share ownership. Those rights include the right to file proposals.

Raising the filing threshold significantly would harm retail investors whose diversified portfolios and acquired shares were sufficient to engage with their companies, and now may find that those rights have been depreciated and eliminated. Moreover, abrupt declines in share prices at mismanaged companies would block the filing of proposals when they are most needed, by impeding the submission of proposals from shareholders whose stock has lost market value during the preceding year.

A second proposal under consideration apparently involves a steep increase in the resubmission threshold, undermining our ability to sustain necessary focus on emerging issues for which support tends to grow over time. Issues that draw concern of four or five percent of investors often prove financially material over time; our proposals often serve as a needed alert, rather than a diversion.[3]

The resubmission thresholds are already functional. Shareholders are quite able to reject ill-advised proposals through the current resubmission thresholds. For example, in 2019 shareholders consistently provided less than 3% support to proposals seeking an ideological litmus test for board members at Discovery, Starbucks, Apple, Twitter and Amazon. Shareholders at Exelon similarly rejected a proposal to “burn more coal” with only 1.6 percent support. Investors also rejected a request to report on how Gilead Sciences spent its share of the federal tax cut, a proposal that earned only 2.2%. Those proposals are barred under the resubmission thresholds from reappearing on the proxy. 

In addition, if the resubmission thresholds are increased significantly, the recent growth of multi-class share ownership will combine with predictable insider share voting to distort the outcomes even in the face of substantial support by external investors. Undoubtedly, if the CEO, board, and other insiders oppose the proposal, they will vote against it. Where companies have multi-class share structures, company insiders will typically represent a majority percent of the vote (while owning far less in economic stake of the company).[4] It makes no sense to allow dual class share owners and insiders to have such an oversized opportunity to block proposals from recurring, effectively silencing the voice of minority shareholders.  

Major changes to submission or resubmission thresholds under consideration could place the right to file shareholder proposals out of reach of true Main Street and retail investors. In the event that the Commission nevertheless votes to propose rule changes on November 5 as reported by Reuters, we  strongly recommend that you allow ample time for public comment, at least 90 days.

We urge you to stand up for our rights.





Sanford Lewis

Shareholder Rights Group




Docket: Staff Roundtable on the Proxy Process 4-725


Hon. Michael D. Crapo, Chair, Committee on Banking, Housing, and Urban Affairs, United States Senate

Hon. Sherrod Brown, Ranking Member, Committee on Banking, Housing, and Urban Affairs, United States Senate

Hon. Maxine Waters, Chair, Committee on Financial Services, United States House of Representatives

Hon. Carolyn B. Maloney, Chair, Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets Committee on Financial Services, United States House of Representatives

Hon. Patrick T. McHenry, Ranking Member, Committee on Financial Services, United States House of Representatives


Hon. Robert J. Jackson Jr., Commissioner, U.S. Securities and Exchange Commission

Hon. Hester M. Peirce, Commissioner, U.S. Securities and Exchange Commission

Hon. Elad L. Roisman, Commissioner, U.S. Securities and Exchange Commission

Hon. Allison Herren Lee, Commissioner, U.S. Securities and Exchange Commission

Mr. William Hinman, Director, Division of Corporation Finance, U.S. Securities and Exchange Commission

Mr. Rick Fleming, Investor Advocate, Office of the Investor Advocate, U.S. Securities and Exchange Commission


Ken Bertsch, Executive Director, and Jeff Mahoney, General Counsel, Council of Institutional Investors

Josh Zinner, CEO, Interfaith Center on Corporate Responsibility

Lisa Woll, CEO, US SIF: The Forum for Sustainable and Responsible Investment

Heather Slavkin-Corzo, Head of US Policy, UN Principles of Responsible Investment



[1] For instance, see:


[3] Shareholders that in aggregate account for 3% or 6% of the vote may hold a significant minority view that proves accurate and prescient in identifying company risks. For example 5% of Monsanto investors supported a proposal to require the company to assess the looming public health risks of its product glyphosate; within a few years, it appeared that the liabilities associating glyphosate with cancer causation are expected to drive Monsanto’s purchaser, Bayer, into bankruptcy.


[4] In effect, a shareholder proposal opposed by management at multi-class companies may never have a fair opportunity to reach threshold vote levels. For example, the 2018 shareholder proposal at Alphabet (which has three classes of stock including an insider class with ten votes per share) seeking to “Give Each Share an Equal Vote” garnered 28% of the overall vote after being resubmitted for several years. However, the filer of this proposal estimates that 87% of non-insider votes supported the proposal. The stark difference between 28% (including insider votes) and 87% (only non-insiders) illustrates the peril posed by calculating refiling ability when including insider ownership at multi-class share companies. Had this proposal received this vote under revised resubmission thresholds that require 30% vote in third and subsequent years, the proposal would have been excluded from future filings despite the high level of non-insider support. After refiling in 2019, this proposal earned 30% of the overall vote which represents an estimated 92% of the non-insider vote. More generally on the disastrous implications of dual class share structures, see


Investor Letter to SEC: Rulemaking on Rule 14a-8 Not Needed

The 129 undersigned investors and investor organizations, representing $525 billion in assets under management, are writing to share their concerns about potential changes to Rule 14a-8. The Securities and Exchange Commission has placed investors on alert with its May 2019 announcement that it is considering conducting a rulemaking to alter the thresholds for filing and/or resubmission of shareholder proposals.

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New Securities and Exchange Commission Policy Signaling Selective Enforcement Threatens Rights of Retail Investors 

Washington, DC. On September 6, the Securities and Exchange Commission issued a new policy that could significantly reduce transparency and accountability in the process of enforcement of the rules on shareholder proposals. According to a group of leading investors who utilize this process, the new policy undermines the rights of shareholders and increase uncertainty.

Under the decades-long process deployed by the SEC to review shareholder proposals, companies that wish to exclude a proposal from the proxy statement are required to file a request for a “no-action decision” from the Securities and Exchange Commission describing their reasons for excluding the proposal. The staff issues an informal ruling, in each instance clarifying whether or not the staff agrees with the company’s reasons for exclusion, or would recommend enforcement if the company follows through on its intention to exclude the proposal. 

Under the new policy, the staff will not necessarily respond in writing to every no-action request that is submitted. In some instances, the staff may issue a written decision that they are choosing not to decide for or against the proposal. In other instances, the staff may only respond orally to the parties.

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James McRitchie: 2019 Proxy Season Wins Threatened by SEC Proposals

2019 proxy season results show widespread support for retail initiatives. In 2017, SEC Chairman Clayton indicated the SEC would review shareholder proposal rules, noting it is “very important to ask ourselves how much of a cost there is…. how much costs should the quiet shareholder, the ordinary shareholder, bear for idiosyncratic interests of other [investors].”

My proposals averaged 52.3% support this proxy season. I am exactly the type of shareholder targeted by the rulemaking under consideration – a small retail investor. If my submissions were really “idiosyncratic,” why do they win the votes of so many shares? They win because they drive best practices and increase value for the entire market. 

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Josh Zinner: Business Roundtable Must Defend Shareholder Access to Proxy

We write today for two reasons. The first is to commend the Business Roundtable (BRT) and the 181 CEOs who endorsed the new Statement on the Purpose of the Corporation(the “Statement”), embracing the importance of companies’ commitment to key stakeholders. The statement acknowledges a central tenet of ICCR’s core philosophy: that companies focused on the well-being of all their key stakeholders and not just on boosting short-term shareholder returns will be more successful over the long term. A growing community of ESG investors have been supportive of companies demonstrating leadership in corporate responsibility for years, with the firm belief that these companies are building long-term value for shareholders.We expect the BRT CEO statement will stimulate an important dialogue within companies,investors and the broader public.

However,the principles clearly articulated in the Statement makes the BRT’s continuing lobbying and public statements against shareholder resolutions dealing with environmental, social and governance issues even more perplexing. We urge the BRT to reassess its campaign against shareholder resolutions in light of the new statement.

We read with interest the June 3,2019 BRT letter to the Securities & Exchange Commission (SEC Letter)and take issue with several of the assumptions used to support the BRT’s argument. The BRT’s characterization of the issues raised in the proxy process, as well as the motivations of shareholder proponents, is a simplistic description that is false and misleading.

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Lisa Woll & Jonas Kron: Responding to BRT "Statement": Stronger partnership needed between shareholders, managers

Lost in many responses to the Business Roundtable statement Aug. 19 that companies have a "fundamental commitment" to all their stakeholders is a simple fact: Structurally speaking, there are two primary regions of power in a company: shareholders and managers. And both of them need to focus more attention on the social and environmental impact of corporate policies, practices and performance. Both shareholders and managers should focus more on the social and environmental impact of corporate policies, practices and performance.

Now that corporate CEOs are lending their voices to these shared concerns, it is not the time to vilify investors for utilizing their shareholder rights and put all our faith in managers to take up the mantle. Instead, we must consolidate this opportunity by harnessing the insights of sustainable and responsible investors with CEOs' ability to implement and execute on those ideas.

An excellent first step would be for the Business Roundtable to withdraw its request to the Securities and Exchange Commission to change the shareholder resolution process and instead welcome shareholders to continue to put shareholder proposals on issues like climate change and economic inequality in corporate proxy materials.

Lisa Woll is CEO of US SIF: The Forum for Sustainable and Responsible Investment. Jonas Kron is senior vice president of Trillium Asset Management.

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Council of Institutional Investors Research and Education Fund: Resubmission Thresholds Encourage Engagement

Even though proposals often do not win majority support after failing the first time, proponents often have success engaging companies if their proposals win substantial enough support in one or more attempts. The level of support that qualifies as “substantial” varies by proposal and company, but 86 proposals in the dataset won between 20% and 30% support in the third attempt. A 30% threshold for repeated attempts could therefore disrupt proponents’ efforts to engage companies on a number of issues.

For example, although proposals asking companies to disclose political contributions rarely win majority support and garner 20–30% of shares voted, “more S&P 500 companies have voluntarily disclosed at least some of the information related to political spending without a proxy vote,” according to a Pension & Investments report. As of 2017, “295 companies disclosed at least some election-related spending.” The Center for Political Accountability also tracks the actions companies take even in the absence of a majority-supported shareholder proposal.

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SEC: Nominal Thresholds Empower the Small Shareholder

The Securities and Exchange Commission last revised the requirement as to how many shares must be held by a proponent in 1998. At that time the Commission made it clear that increasing the threshold above $2000 held for a year would be detrimental to key participants in the process - the smaller shareholders empowered by the rule:

[W]e are increasing the dollar value of a company‘s voting shares that a shareholder must own in order to be eligible to submit a shareholder proposal ­­ from $1,000 to $2,000 ­­ to adjust for the effects of inflation since the rule was last revised. There was little opposition to the proposed increase among commenters, although several do not believe the increase is great enough to be meaningful, especially in light of the overall increase in stock prices over the last few years. Nonetheless, we have decided to limit the increase to $2,000 for now, in light of rule 14a­8’s goal of providing an avenue of communication for small investors. There was no significant support for any modifications to the rule’s other eligibility criteria, such as the one ­year continuous ownership requirement.

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18,000 Individuals Write to SEC: Don't Modify Shareholder Proposal Rule

If the SEC submits to changing Rule 14a-8, proposals like these could be excluded, inhibiting important contributions to corporate governance that have proven beneficial to the long-term health and performance of companies, and the well-being of people and the environment.

Critics of the shareholder resolution process have a clear political agenda — to limit the ability of shareholders to engage with the companies that they own, and to cripple the proxy process that has been in place for over fifty years.

I urge you to uphold the rights of shareholders and do not make changes to Rule 14a-8.

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Julie Gorte: Linking Investor Engagement with Financial Value, July 2019.

Julie Gorte, Impax Asset Management

Some observers tend to see vote totals on shareholder proposals as binary — either they pass or they don’t. But it is useful to understand the nuances, too. In accounting, a shareholder holding at least 20 percent of a company’s shares has a significant or active interest, and that is something that can influence management decisions. That provides a different lens through which to see the 30 percent average support for shareholder proposals than a simple pass/no pass view. It’s also an indicator that it’s not just a bunch of frustrated political activists interested in these proposals; it’s an indication that a significant proportion of a company’s investors see them as relevant to the company’s financial performance.

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Investor Coalition Fights Opioids Crisis


Screenshot 2019-07-24 08.23.03.jpg

It began as a suggestion from a county health official to leaders of a group of nuns’ money management program. They were addressing climate change, modern-day slavery and immigration — why not the opioid epidemic?

A year and a half later, the mammoth coalition of investors born from that idea wields $2.2 trillion of influence, urging the largest U.S. drug companies to take accountability for playing a role in the opioid crisis. The group, Investors for Opioid Accountability, has cut deals with companies in the business of making or distributing opioid painkillers to review how they oversee sales of the highly addictive drugs and make other corporate governance changes aimed at improving supervision of opioid sales.

“No one is untouched by the opioid crisis in the country — or even globally now as it’s beginning to turn out — but we lead with the investor lens because that is our responsibility and our duty to give an investor voice to it,” says IOA co-leader Meredith Miller. She says the coalition”s 46 members — including state treasurers, public pension funds, faith-based investors and union benefit funds — are hearing from their ministries, citizens or union members about the crisis.


IOA’s shareholder proposals include requests for reports on board oversight of risks related to opioid sales, mechanisms for recouping executive pay in the case of misconduct, disclosure of lobbying spending, independent board leadership and other adjustments to oversight mechanisms and how the CEO and other top leaders are paid.


IOA has claimed several victories so far. The coalition’s opioid risk report proposal won support from 62 percent of investors in Assertio Therapeutics Inc., which makes opioid painkiller Nucynta. The same proposal neared majority approval at AmerisourceBergen Corp., one of the “big three” U.S. drug wholesalers. IOA says it has a commitment from another large distributor, Cardinal Health Inc., to publish risk reports, recoup executive pay in cases of misconduct and split the roles of CEO and board chair. McKesson, the country’s sixth-largest company, and several manufacturers have also agreed to changes including reviews of how directors oversee opioid sales, avoiding votes on IOA’s proposals.

Read full article from CQ

Rights at Risk

The Securities and Exchange Commission  has placed investors on alert with its May 2019 announcement that the Commission is considering conducting a rulemaking to alter the thresholds for filing or resubmission of shareholder proposals.

For over half a century,  the shareholder proposal process has aided investors of all sizes to convey key concerns to company directors and managers as well as fellow shareholders.  The shareholder proposal process often sheds light on issues neglected by boards, leading to better-considered strategic decisions and more transparency.

A few companies and their lobby groups are seeking to curtail these shareholder rights, and are calling on the SEC to make substantial changes to the rule. 


Proposal Filing Thresholds

Current rules require an investor, as a precondition to filing a proposal, to hold at least $2,000 in shares of a company for at least a year.  This holding timeframe and amount was established to ensure that retail investors would have access to the important right to place issues significant to the company before fellow shareholders.

Some potential rule changes floated in recent years would limit this right to the few largest investors, and to small shareholders that have held onto their shares for an extended number of years.

Some of the proposed changes would block proposals by many current proponents, even though their proposals are winning broad support. The votes in favor of their proposals, often 30-60% or higher, demonstrate that shareholders of all sizes value the opportunity to weigh in on these proposals.

Other rulemaking proposals for “reform” of the Shareholder Proposal Rule seek to extend the length of time one must hold shares beyond the current one year holding period.   When the rule was originally enacted in the 1960s, the average time an investor held a share of  stock was eight years; today the average is between four and eight months.[1]  Therefore, extending the holding time is out of step with today’s  high-frequency trading and index funds in which fewer shareholders are exercising “buy-and-hold” investment strategies.

Resubmission Thresholds

Once a proposal is voted upon at a company, SEC rules limit the circumstances in which the proposal can be resubmitted. In order to resubmit a particular proposal at a company in a subsequent year, the proposal must have obtained at least 3% shareholder support in the first year,  6% in the second and 10% in the third year at the company’s annual shareholder meeting.  These thresholds allow time for the introduction of a proposal on an emerging concern to prompt ongoing consideration, education, research and dialogue among the shareholders and companies.  Support levels for proposals also increase over time in the face of emerging information on risks, technical innovation, and shifts in investing strategies. The potential for resubmission sometimes is sufficient to stimulate a company to address the underlying concern.  Vote levels for novel proposal topics grow over time. Many of the largest shareholders only support a proposal after establishing a voting policy relevant to the newly emerging issue.

Despite these functional realities, corporate trade associations have been asserting since the late 1990’s that these thresholds should be increased, arguing that growing levels of support for proposals by investors render the resubmission levels too low to exclude proposals of little interest to a firm’s investors.

The data do not support the trade associations' claims.  An examination of  proposal resubmissions and voting records during 2018 and 2019 demonstrates that the 3% threshold for a first-time proposal remains relevant -- a number of proposals were rejected by shareholders,   receiving votes less than 3% and preventing them from being resubmitted in a subsequent year. The existing resubmission thresholds thus effectively screen out proposals considered irrelevant or ill-advised by most shareholders.     

In addition,  the record shows that proposals are seldom resubmitted by proponents if they achieve votes that only narrowly exceed the existing thresholds. Thus, the concern about too many resubmitted proposals is misplaced.

Changing the resubmission threshold in a way that would make it harder for such proposals to persist would ultimately disadvantage all investors, large and small, by depriving them of the opportunity for ongoing deliberation on issues believed by many to be consequential for portfolio companies.


In addition to the impending rulemaking, other current developments at the SEC are also threatening shareholder rights. 

Advisory Proposals Do Not Micromanage

 A further controversy relates to whether proposals may be excluded as “micromanaging” company decision-making. In 2018 and 2019,  the SEC Staff found[2] that proposals requesting companies to disclose greenhouse gas targets would “require” the company to substitute “specific methods for implementing complex policies in place of the ongoing judgments of management as overseen by its board of directors.”[3]  As such, the staff allowed exclusion.

In fact, there was no such requirement  in any of the excluded proposals, because they are advisory in nature.   Because most proposals “request” rather than “require” action, by their nature they respect and ultimately defer to the discretion of the board and management to operate the company. Most shareholder proposals provide suggestions and offer input from company shareholders, while also  providing an opportunity for management to  determine how widely a view is shared among the investors.  The Staff’s broadened definition of micromanagement is depriving shareholders the opportunity to vote on clear, effective proposals on urgent risks such as climate change.

Read More: Council of Institutional Investors letter on micromanagement 

Selective Issuance of No Action Letters Could Hurt Both Companies and Shareholders

The SEC is has indicated that it may halt the practice of issuing written replies to all company no action requests, and in some instances to give their reply orally instead of in writing. it seems clear that any instances of informally granting a no action request without written justification would lack the safeguards of transparency and accountability provided by a written no action process, and deny all parties the benefits of the staff's deliberative process and thinking. Denial of a no action request without a written justification will certainly be problematic to issuers, and similarly deny proponents the benefits of the Staff’s thinking.

Read more - Shareholder Rights Group letter to Director of Corporation Finance William Hinman


[1] see also Jake Zamansky, The Death of the "Buy and Hold" Investor, Forbes, Jul 5, 2012,

[2] Examples:  Exxon Mobil, JB Hunt Transportation  and  Devon Energy.

 [3] The decision stated: “In our view, the Proposal would require the Company to adopt targets aligned with the goals established by the Paris Climate Agreement. By imposing this requirement, the Proposal would micromanage the Company by seeking to impose specific methods for implementing complex policies in place of the ongoing judgments of management as overseen by its board of directors.” [emphasis added]

Gender Pay Equity on the Agenda

Natasha Lamb
Managing Partner
Arjuna Capital

There are gender pay gaps … and then there are median gender pay gaps. Understanding the difference between the two may determine just how much progress women make in terms of fairer compensation in the next decade.

So first, the definitions:

“Equal pay” gap: What women are paid versus their direct male peers, statistically adjusted for factors such as job, seniority, and geography. Often referred to in the context of “equal pay for equal work.”

“Median pay” gap:  The median pay of women working full time versus men working full time. This is an unadjusted raw measure used by the Organization for Economic Cooperation and Development (OECD).  Women in the US, for example, make 80 cents on the dollar versus men on this basis.

Equal pay gaps measure whether women are being paid commensurate with their peers for the work they are doing today. But median pay gaps measure whether or not women are holding as many high-paying jobs as men. Narrowing the median pay gap means putting more women in leadership (and reaping the performance benefits that diversity affords). And that’s where investors come in. Concerned shareholders in major US financial and tech companies want to make sure the pay gap difference is understood—and acted upon.

Consider the case of Citigroup. While it is true that women at Citi are paid 99% of what men are paid on an equal-pay basis when adjusting for job function, level, and geography, the median pay gap at the financial giant paints a very different picture: Women at Citigroup earn just 71% of what the men earn.

What accounts for the difference? Women are dramatically underrepresented in high-paying positions at Citigroup—and nearly all other major corporations. So, when more US companies begin disclosing their median pay gaps, the numbers are going to be shocking. In fact, Citi’s 29% median pay gap could very well end up being at the lower end for large US financial and tech companies.

This kind of disclosure is not going to happen on its own. But investors are intent on making headway, and establishing benchmarks from which to measure company progress. Between 2016 and 2018, shareholder proposals and concurrent dialogues led by my firm, Arjuna Capital, persuaded 22 companies, including Citi, JPMorgan, Wells Fargo, Bank of America, Bank of New York Mellon, Amex, Mastercard, Reinsurance Group, and Progressive Insurance to publish their gender pay gaps on an equal-pay basis.

Tech giants like Apple, Amazon, Microsoft, Google, and Facebook have been compelled to do the same. And commitments from leading companies often have a domino effect through an industry, putting pressure on more companies to act. The adjusted equal pay gap picture is, in many ways, the easy part of the gender equity story to tell.  But it is only half the story.  Now, shareholders like us want companies to follow Citigroup’s lead and disclose their median gender pay gaps.

Today, Arjuna Capital is announcing an important new phase of our work: a median pay gap shareholder resolution engaging a dozen major US companies across the banking, tech, and retail sectors, including: Adobe, Amazon, Intel, Facebook, Alphabet/Google, Bank of New York Mellon, Bank of America, Wells Fargo, AmEx, JPMorgan Chase, and Mastercard.

The 12th company we targeted with the shareholder proposal—Citigroup—opted to respond almost immediately, disclosing its median pay gap data through a blog, and pledging to narrow this wider gap. On Jan. 16, 2019, Citi became the first US company to reveal its global median pay gap.

The result was a bit of rough sledding for Citi. National and financial news outlets zeroed in on the shock factor in the data. Headlines read: “Citigroup Admits It Pays Women 29% Less Than Men;” and “Citgroup’s business is money, but not a lot of it goes to its female employees.” Others got it right with headlines focusing on the significance of Citi’s groundbreaking decision to release median figures: “Citigroup is revealing pay day data most companies won’t share” and, perhaps most bluntly, “Citigroup Bravely Announces It Pays Women Like S—t.”

Citi had the courage to break the mold and disclose median pay numbers, and that bravery will pay off in the long run, not only for the company but for its investors, by improving gender diversity throughout the company. A recent study cited in the Harvard Business Review found that wage transparency, in countries that mandate it, not only narrowed the wage gap but increased the number of women hired and promoted into leadership positions.

Citi also made it clear that it is taking the proactive steps needed to fix the median gender pay gap. Its goal is to increase representation at the assistant vice president through managing director levels, to at least 40% for women globally and 8% for black employees in the US by the end of 2021. (Yes, there is a minority pay gap and a minority median pay gap problem, too.)

Multinational companies, including Citi, that operate in the United Kingdom are now under regulatory mandate to disclose median gender pay gaps. In 2018, peer Bank of America revealed a 41% gap for its UK operations. Citigroup reported a 36% median gap for the UK, but prior to January’s announcement, the company had not published median information for its global operations, including the US.

Revealing the whole story of the gender and racial pay gap is essential to create change. Indeed, what gets measured (and disclosed) gets managed. As it stands, the World Economic Forum estimates the gender pay gap costs the economy $1.2 trillion annually. The 20% median income gap for all women working full time in the United States is a disparity that can equal nearly half a million dollars over a career. And the income gaps for African-American and Latina women are at 60% and 55% respectively. At the current rate, women will not reach pay parity until 2059. This depressing statistic is not only bad for women, it’s bad for the economy, and it’s bad for the companies that can benefit now from women’s leadership and talent.

It remains to be seen how many of the 12 companies targeted by Arjuna Capital will agree to the shareholder resolution in 2019. Our pledge is to continue to work with the companies’ leadership to find common ground on our resolution, and to educate the media and public about the median pay gap. We will applaud all good faith efforts to publish median pay numbers because the most effective shareholder activism is not about shunning; it is about casting light on a problem, calling companies to task, and nudging them through the sometimes difficult process of disclosure and reform.

Citi learned that disclosing its median gender pay gap meant a little PR pain in the near term. But it also established itself as the leading US institution on pay equity, doing the honest and real work to address inequity for women and minorities. Concerned shareholders will continue to press other companies to follow suit, because, unfortunately, there remains glaring inequality in the US workplace. And it is high time to tell the whole story.