Read The Manhattan Institute's March 7, 2014 Webinar Slides on Shareholder Activism and Corporate Political Transparency

Read The Center for Public Integrity's New Report, "Top U.S. Corporations Funneled $185 Million to Political Nonprofits," which used CPA's Research to Assemble a First of its Kind Database of Corporate Nonprofit Contributions

2014 Proxy Season Opens with 3 New Companies, Strong Vote

CF Industries Holdings, Inc., an Illinois-based fertilizer company, has adopted a strong political disclosure policy less than a year after its shareholders sent a resounding message in favor of transparency.


Last year, shareholders voted 66 percent in support of a resolution for the company to disclose its political spending and give details about its procedures for making such spending decisions.


The New York State Common Retirement Fund initiated that resolution. “CF Industries has responded to widespread shareholder support for transparency on its political spending," said New York State Comptroller Thomas P. DiNapoli. "The company's disclosure gives shareholders important insight into where corporate dollars are directed for political purposes.” 


CF Industries’ action mirrored a recent pattern of companies adopting political disclosure and accountability following strong shareholder votes on proxy resolutions advocating the same goals.


These companies include Century Link, after a shareholder vote of 41.08 percent support, in 2013; RR Donnelley & Sons, 48.70 percent, in 2012; Halliburton, 46.46 percent, in 2012; State Street Corporation, 44.08 percent, in 2012; and Wellcare Health Plans, 52.66 percent, in 2013.


CF Industries said its Code of Corporate Conduct, stating company policies on political activities and contributions, is posted on the company’s website.


The company said a report of political contributions will be posted on the website semiannually. It will list payments to candidate campaigns, political parties or committees, and politically active tax-exempt organizations; for trade associations to which it pays $20,000 or more, the report will disclose the portion of dues the trade association says is used for lobbying and political purposes.


Meanwhile Peabody Energy, which describes itself as the world’s largest private-sector coal company, agreed to adopt a robust corporate political disclosure and accountability policy. The City of Philadelphia Firefighters agreed to withdraw its shareholder resolution for 2014 after Peabody Energy reached the agreement.


Also adopting a disclosure and accountability policy was EQT Corporation, a natural gas producer. Clean Yield engaged the company and withdrew its resolution following the agreement. The latest actions brought to 122 the number of publicly held U.S. companies adopting political transparency and accountability as a result of agreements with CPA and its investor partners.


In the first shareholder vote of the 2014 proxy season, shareholders at Mississippi-based Emerson Electric Co. supported by a 47 percent vote a disclosure and accountability resolution sponsored by Trillium Asset Management.


CPA began pressing more than a decade ago, with shareholder partner groups, for corporations to voluntarily disclose their political spending. “The momentum is with us,” said CPA President Bruce Freed. “At the kickoff of a new proxy season, this increasingly mainstream trend toward disclosure is continuing.”

Need to Level the Corporate Disclosure Playing Field

Founder's Column

By Bruce Freed

As the 2014 proxy season opens, a quick scan of this newsletter shows that secret political spending continues to pose risks for corporations and their shareholders, yet mainstream support for corporate political disclosure keeps building.
Not only is California’s Fair Political Practices Commission continuing its aggressive pursuit of “dark money” political funds, in one prominent example of the kind of risks faced by corporations and shareholders, but the secret money networks aren’t diminishing.
To get an idea of the enormity and complexity of these networks, check out Pro Publica’s article entitled “The Dark Money Man: How Sean Noble Moved the Kochs’ Cash into Politics and Made Millions.” It documents a vast dark money so-called “Kochtopus” network to funnel secret money into the 2010 and 2012 elections.
At the same time there’s good news. More companies are adopting political disclosure and accountability: They include CF Industries Holdings, after a strong shareholder vote on a resolution; and Peabody Energy, a leading coal company, and EQT, a natural gas company, in the face of shareholder resolutions. In addition, shareholders launched the 2014 proxy season with a strong vote for disclosure at Emerson Electric.
In our view, these developments underscore the need for uniform corporate political disclosure and for a level playing field. “The [Securities and Exchange Commission] should hold all publicly traded companies to the same standard of disclosure,” a co-manager of the Neuberger Berman Socially Responsive Fund recently wrote. We heartily agree.


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