“Increased political polarization, the 2020 Election, and the January 6th attack on the Capitol, have shown companies that spending corporate dollars on political causes is risky business,” [Thomas] DiNapoli said in a statement to Bloomberg Law.
The trend is expected to continue as activist shareholders vow to make sure that companies stay true to their post-Jan. 6 pledges. Proposals targeting Duke Energy and others are worded to capture a broad range of corporate political expenditures, especially undisclosed donations to tax-exempt “dark money” groups like political nonprofits, trade groups, and unions.
Like Duke Energy, shareholders at Netflix Inc., United Airlines Holdings Inc., and Royal Caribbean Cruises Ltd., and others have endorsed political spending disclosures in the sixth months since the riot, according to Bloomberg’s Proxy Tracker. The Netflix proposal received more than 80% shareholder support and the United proposal secured nearly 68% support.
The Capitol riot “exacerbated a risk that was already there” to corporate bottom lines, said Bruce Freed, president of the Center for Political Accountability, a non-profit group that advocates for and partners with activist shareholders on transparency proposals. That’s seen in this proxy season’s numbers, he said.
Political spending proposals that manage to get votes at annual shareholder meetings are increasingly likely to get approved. Nearly 40% of the proposals were approved in 2021, compared to just 20% in 2020.Activist Shareholders Score Wins on Election Spending After Riot