Shareholder Advocacy

It's no accident that today's economy is unfair to working people. The rules have been manipulated for decades by corporate CEOs who choose to put profits over people. One of the ways we work to restore balance to our economy is by changing anti-worker corporate practices through shareholder-driven reforms.

About Shareholder Activism

Working people are corporate shareholders through their retirement savings. Union-sponsored and Taft-Hartley pension plans hold more than $587 billion in assets. Union members also participate in the capital markets as individual investors and as participants in employer-sponsored pension plans. The submission of shareholder resolutions is an important tool that investors have to communicate with each other and the companies that they own.

Many of today’s best practices in corporate governance and corporate responsibility were established as a result of shareholder resolutions.

We endeavor to hold major corporations and its CEOs accountable through these shareholder initiatives.

Executive Pay and Stock Buybacks

This shareholder resolution adjusts executive pay metrics to exclude the impact of stock buybacks. In recent years, public companies have increasingly used their retained earnings to buy back shares of stock instead of investing for economic growth.

Certain financial metrics used for setting executive pay, such as earnings per share, can be inflated by stock buybacks in the short term. Moreover, the company’s long term health may suffer if share buybacks come at the expense of company investments in capital expenditures or research and development.

We ask companies to exclude the impact of stock buybacks from the compensation formulas used for their senior executives. If adopted, executive pay will be better aligned with long-term economic growth rather than short term financial manipulation.

Government Service Golden Parachutes

The AFL-CIO endeavors to eliminate government service golden parachutes at Wall Street banks. Under these arrangements, executives receive unvested shares of stock if they voluntarily enter government service. These shares would otherwise be forfeited upon an executive’s resignation.

In other words, Wall Street executives may receive a windfall of equity awards if they agree to take a government job. The AFL-CIO has questioned whether providing financial incentives to enter government service undermines the independence of government officials who regulate Wall Street.

Remedies for Human Rights Violations

The AFL-CIO’s shareholder resolution urges companies to agree to participate in mediation of any alleged violations of human rights if requested by the Organisation for Economic Cooperation and Development (OECD) national contact point.

These human rights shareholder resolutions have been submitted at companies such as Pepsico and Mondelez that have refused to participate in the OECD national contact point mediation. In addition, the resolution has been filed at companies in the tobacco industry such as Reynolds American, Philip Morris and Altria where human rights violations in the supply chain for tobacco are more difficult to remedy.

Corporate Lobbying Disclosure

We request that companies disclose their indirect lobbying and grassroots lobbying expenditures, including memberships in organizations that create model legislation.

Without disclosure of corporate lobbying spending, there is a risk that senior management and directors may allow their personal political preferences to motivate and influence decisions. Disclosure will allow shareholders to assess whether corporate lobbying expenditures are in the best interests of shareholders. Disclosure also encourages better oversight of lobbying activities by boards of directors.