Investors split on shareholder resolution on tax policy at Google AGM

Clear division between SRI and ‘mainstream’ investors

Responsible investors at Google’s annual general meeting yesterday (May 14) were split over a vote on a shareholder proposal challenging the company’s controversial tax policy, in a sign of differing views on the subject.

The proposal called on the internet search giant to adopt principles to address the impact of its tax strategies on society; particularly employees, customers and suppliers. It called on Google to publish and annual report to shareholders about the implementation of its tax principles.
It follows serious controversy about Google’s tax policies in the UK and France. In the UK, the Public Accounts Committee published a report in June 2013 criticising Google’s UK tax minimization approach. Earlier this year, French tax officials said the company could be forced to pay as much as €1bn in back taxes allegedly owed over the past decade.
The motion was 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.
It attracted the support of socially responsible investors such as Trillium Asset Management, Christian Brothers Investment Services, the AFSCME Employees Pension Plan and Calvert Investments, according to voting disclosures on the Proxy Democracy site.US sustainable fund group Trillium said the proposal was in shareholders’ interests and would help safeguard long-term corporate value.

It went on to say that the proposal wouldn’t be “unduly burdensome” to implement and that it would complement Google’s stated commitments to mitigate financial, reputational, and regulatory risks related to tax.
The full voting results for the Google aren’t yet available.
However, in contrast to the SRI houses, some major institutional investors voted against the motion, according to vote disclosures on their websites.
These included Norges Bank Investment Management (NBIM), the Canada Pension Plan Investment Board (CPPIB), the California State Teachers Retirement System (CalSTRS), the Florida State Board of Administration and Dutch pension manager PGGM.
That was despite the proponents issuing a detailed rationale for supporting the motion ahead of the meeting.

The proponents – who claimed Google had not been willing to speak to them – made it clear their resolution was “not a vote on tax reform, or on how much tax Google should pay”.