Goldman sets out opposition to shareholder proposal on political lobbying

Points to new policy developed after shareholder engagement

Investment banking giant Goldman Sachs has set out its opposition to a shareholder resolution calling for a report on its political lobbying expenditures and activities.

The bank says a new policy developed after “considerable engagement” with shareholders meets the needs of the proposal.

The Needmor Fund, a $24m family foundation based in Chicago, has tabled the motion for Goldman’s annual shareholder meeting on May 24.

It comes as the shareholders have increased their focus on corporate lobbying in the wake of the controversial Citizens United legal ruling in 2010. Advocacy group As You Sow called political spending the “headline issue” for the 2012 proxy season.

The Needmor resolution calls for an annual report on policy and procedures governing the lobbying of legislators and regulators, including by trade associations.

“We believe such disclosure is in shareholder’s best interests,” the fund says – adding that Goldman spent approximately $7.4m in 2009 and 2010 on direct federal lobbying activities. It said: “Such expenditures and contributions can potentially involve the company in controversies posing reputational risks.”

Goldman has advised its shareholders to vote against the proposal and points to its new Statement on Policy Engagement and Political Participation. The Needmor motion is “unnecessary and not in the best interests of our firm or our shareholders”.One of its stated concerns is the “possibility our firm could be pressured not to advocate for policies that are in our shareholders’ best interests”.

Goldman argues it does not make any political contributions in the US from corporate funds – any contributions are made on an individual basis. The Wall Street titan adds that its policy engagement and political participation are subject to numerous oversight mechanisms. It says a similar proposal was voted against by over 86% of votes cast at the 2011 AGM and that its political advocacy is in the interests of both shareholders and the broader marketplace.

“Such expenditures can involve the company in reputational risks.”

Earlier this year Goldman appointed a lead independent director, James Schiro, in a compromise deal with the Association of Federal, State and City Municipal Employees (AFSCME).

The Wall Street Journal reported that the Missionary Oblates of Mary Immaculate has withdrawn a proposal on tax secrecy. And it said the New York City Comptroller’s office has withdrawn a proposal on executive pay clawbacks after the firm clarified its rules.

In total, Goldman has had six shareholder proposals withdrawn or excluded from the shareholder meeting agenda, the Journal said. Goldman’s proxy materials