The shareholders behind a resolution calling on Google to adopt a set of tax policy principles have detailed the rationale for supporting the motion ahead of the Internet search giant’s annual meeting next week.
The investors want Google to adopt principles to address the impact of its tax strategies on society, particularly employees, customers and suppliers. And they want the company to publish annual reports to shareholders about the implementation of the principles from December.
The company has advised its shareholders to vote against the motion, filed by the Domini Social Equity Fund and co-filers the Missionary Oblates of Mary Immaculate, Canada’s NEI Investments, private investor Robert Burnett, and Investor Voice, the shareholder engagement specialist. Google holds its AGM on May 14.
The proponents – who claim Google “has not been willing to speak” with them about the proposal – make it clear in the nine-page document that the proposal is “not a vote on tax reform, or on how much tax Google should pay” and that Google’s tax strategy should be consistent with its stated objectives and policies on social and environmental sustainability.The company’s opposition statement to resolution focuses on global tax reform, which the investors say is a “red herring”.
“The proposal does not address legal reforms of any kind. Rather, the proposal seeks a set of voluntary principles to guide Google’s tax strategies, regardless of the applicable legal regime,” they say in a filing at the Securities and Exchange Commission.
“Just as we would expect Google to follow consistent standards globally regarding bribery, child labor, greenhouse gas emissions and non-discrimination, we believe Google would benefit from a set of principles to help it navigate the complexity of local and national tax systems.”
Google’s tax affairs have received a lot of attention in the UK and France and while the investors acknowledge that Google’s tax strategies aren’t illegal, they see them as “‘aggressive’ and therefore risky”.
The letter cites a Sustainalytics report last year which recommended the publication of a formal tax policy and code of conduct. And it also notes how other companies such as Unilever, Johnson & Johnson, Vodafone have developed tax policy principles. Google proxy
