Greater Manchester Pension Fund among co-filers of Disney lobbying resolution

Excluding shareholder proposals: early season round-up

The UK’s £23.8bn (€28.5bn) Greater Manchester Pension Fund (GMPF) is involved in a shareholder proposal asking US entertainment giant Walt Disney to disclose its lobbying expenditures.

It’s one of a range of notable early shareholder proposals that have emerged as investors and companies prepare to lock horns in the 2020 proxy season.

The resolution from the Congregation of Sisters of St. Agnes is the subject of a so-called “no-action request” by the company; it is requesting that the Securities and Exchange Commission (SEC) take no action if it excludes it from the proxy statement. 

"We decided in 2019 to expand the international reach of our engagement."

Unusually, the Greater Manchester Pension Fund (GMPF) can be found among the list of expected Interfaith Center on Corporate Responsibility (ICCR) members who are co-filers of the resolution.

A GMPF spokesperson said: “GMPF has been involved in filing shareholder resolutions at various companies in recent years.

“In the responsible investment policy we adopted as Northern LGPS [the local government pension pool of which GMPF is a member] , we committed to using shareholder resolutions as part of our engagement work.” See GMPF’s annual report here.

But had GMPF ever filed at a US company before? “As part of our RI work we also decided in 2019 to expand the international reach of our engagement,” said the spokesperson. 

“We have always voted our international holdings and have supported thousands of shareholder resolutions as a result. For example, we estimate that we supported almost 95% of resolutions on lobbying or political spending at US companies in the first half of 2019.” 

For GMPF this expansion meant becoming co-filers  on a set of US resolutions, including several resolutions relating to lobbying as well as other issues, such as labour standards. The fund expects this involvement to increase.

The fund was a co-filer of a resolution requesting that BP set out a business strategy consistent with the goals of the Paris Agreement on climate change; it recently appointed advisory firm PIRC.

Disney’s objection

Disney’s objection to the resolution is that it has substantially implemented it. 

The Sisters responded to Disney’s objections noting that claims that disclosure was not piecemeal but incorporated into one document were inaccurate. The policy document does not disclose lobbying payments at either the federal or state level, nor does it disclose information on 501(c)(6) trade association lobbying expenditures based on Disney’s contributions, nor any payments used for lobbying by 501(c)(4) social welfare groups.

The company does disclose its policy on such contributions – another request of the resolution – but, as the Sisters point out, this is not the same as disclosing the actual amounts. In addition, the company refers shareholders to other agencies where these disclosures can be found.

Disney also seeks to exclude two other shareholder proposals. The first is an attempt to limit the total annual compensation of the CEO to a ratio to the pay of Disney’s median employee of no more than 500:1, and to increase the pay of the company’s lowest paid employees. This is ordinary business and micromanaging the company, says the no-action letter, relying on standard arguments that are likely to see the proposal excluded.

The last exclusion request concerns a shareholder proposal substantially duplicative of that from the Sisters, but from the opposing point of view. As the National Center for Public Policy Research – a right wing organisation committed to such spoiler resolutions – says, Disney should be proud of its lobbying activities and should celebrate its rights to free speech and make disclosures for this reason. “These activists are working to defund pro-business organizations by attacking their corporate members,” says the Center.

Apple and Areopagitica

Meanwhile, campaign group SumOfus is pressing Apple on “freedom of expression and access to information”, which the tech titan is trying to exclude.

Apple’s no-action request relies on its reading of earlier shareholder proposals on human rights that it claims the current proposal is largely duplicates, since these received minimal support, it is within its rights to exclude this one. 

SumOfUs quotes John Milton’s 1644 work Areopagitica and theories from Athenian democracy to bolster its case. 

The proposal seeks a report, for example, on why Apple has deleted a large number of apps from its Chinese app store, including one for the New York Times. A decision from the SEC on this exclusion request is outstanding.

Finally, AT&T has successfully requested exclusion of a resolution from a couple of individual shareholders which called on the company to sell CNN because of its dishonest journalism.