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.

From the Council of Institutional Investors Report “Clearing the Bar”