More Meeting News to Ponder: Three Individual Investors Submitted 37% of the 2019 Proposals Submitted by the Top-Ten Poponents

It’s easy to understand why issuers get upset about “gadflies” - and would like to see the ownership thresholds increased for submissions of shareholder proposals - and to see the actual vote-getting totals thresholds increased substantially for re-submissions. As the following table from a Sullivan & Cromwell client memo shows, just three entities submitted by the top ten proponents in the first-half of the 2019 meeting season.

Collectively, John Chevedden, Kenneth Steiner, and James McRitchie and his wife Myra Young submitted 233 proposals, including proposals jointly as co-filers. (After discounting the overlaps, they submitted 210 unique proposals, or 31% of all proposals submitted (up from about 27% in 2018…and still a LOT!) The memo also noted that McRitchie announced in December that he and his wife would turn their attention to collaborations with As You Sow Foundation and the Center for Political Accountability as proponents for proposals in the ESP area. So maybe there will be fewer proposals in total in 2020, but we would not bet on it.

As we’ve written before, a great many of the proposals commonly submitted by small shareholders have won company support - often after very long periods. And they serve not just as reminders that shareowners are OWNERS, but often, as valuable early-warning systems to corporate managers and boards about issues that warrant attention. Issuers, in our opinion, would be wiser to just grin and bear it, rather than to raise the rumpus that some super-excitable issuers have done - and also to note that for legal, governance and shareholder-service staffers they actually enhance their roles - and give them some useful visibility. And as to raising the thresholds for re-submissions, who’s kidding who?  Proponents who fall short will simply move on to another company - or to another proposal!