Many shareholder resolutions this year target workers' well-being

It’s shaping up to be the season of the worker at annual company meetings.

From Amazon.com Inc. to Walmart Inc., investors have filed more than 140 shareholder resolutions this year, pressing companies to address employee-related issues ranging from paid leave and health and safety to abortion access, benefits and labor rights.

Shareholders and companies have reached agreements on about a third of the requests. Most of the rest will go to a vote.

“You can see more of these proposals focused on workers’ rights elevating,” said Nadira Narine, senior director of strategic initiatives at the Interfaith Center on Corporate Responsibility, which tracks activist shareholder recommendations. “In order for us to really have an impact on worker health and safety, companies need to change the way they think about their business practices.”

Amazon faces five resolutions, while Walmart will be tested in four areas, including worker safety and pay disparity. Other companies facing multiple human-capital related topics are Kroger Co., United Postal Service Inc. and Apple Inc., according to an analysis by the Sustainable Investments Institute.

Amazon and Walmart said in their proxy statements that they oppose most of the shareholder proposals because existing policies and initiatives already sufficiently address the human-capital concerns that are being raised. All the companies had similar responses in their regulatory filings to the nonbinding resolutions.

The historic summer of 2020 exposed widespread inequities across corporate America following the pandemic lockdowns and the murder by police of George Floyd. Three years later, concerns about inflation and a possible recession have prompted workers at companies, including Amazon, Apple and Starbucks Corp., to organize unions as they agitate for faster change.

“When you see employees really more forcefully speaking out about workplace conditions, investors have to take note of that,” said Mary Beth Gallagher, director of engagement at Domini Impact Investments, which is seeking a health-and-safety audit at Dollar General Corp. “If not, what needs to be fixed within the system?”

Companies have promised to better balance shareholder returns with the well-being of workers, and the Securities and Exchange Commission has been pressing companies to be more transparent about the human-capital risks to their business.

Given this backdrop, this year’s proxy proposals have shifted somewhat from calls for racial audits and better board diversity to issues that more directly affect the worker such as paid leave, safety and labor rights, according to the Sustainable Investments Institute.

At Wells Fargo & Co.’s recent annual meeting, support for worker topics was higher than for climate proposals, according to Heidi Welsh, founding executive director for SI2. “One could almost conclude that investors think that fair treatment at work is more important than climate change,” she said.

The reality is human-capital issues are becoming a bigger risk for companies’ bottom line, Domini’s Gallagher said. For example, Dollar General, which offers low-cost goods aimed at poorer communities, has come under fire for allegedly failing to protect its own workforce, she said.

The Labor Department’s Occupational Safety and Health Administration has added Dollar General to its severe violator list. And some communities are starting to cite the discount retailer’s treatment of workers among reasons to block the opening of new stores, which will ultimately hurt the company’s growth prospects, Gallagher said.

In a proxy filing prepared for its May 31 meeting, Dollar General said the company has a robust program for worker health and safety, and offers assistance and seeks worker feedback to improve working conditions. The company didn’t respond to additional requests for comment.

Paid leave is another area of increased focus this year, said Kate Monahan, director of shareholder advocacy at Trillium Asset Management, which is asking pharmacy chain CVS Corp. for a report on its paid sick leave policy.

CVS, which opposes the Trillium proposal, said in a statement and in its proxy that the company already offers flexible, competitive benefits, including a minimum hourly wage of $15.

The surge in human-capital proposals has been met by a wave of backlash from conservative groups. There are at least 20 proxy proposals on the ballots this year from organizations that say there is a negative cost to business in meeting the demands of activist investors, said Ethan Peck, an associate for the National Center for Public Policy Research’s Free Enterprise Project.

So far, the results have been mixed. Calls for issuing a report about employee risks from new abortion rules received shareholder backing of 13% at Costco Wholesale Corp. and a proposal at Apple to consider the risks of racial justice had only 1.4%.

By contrast, a majority of Starbucks shareholders voted in favor of the company preparing a report on whether it is adhering to international labor standards, while proposals related to racial, and gender pay disparity received support exceeding 33% at companies including Apple and Boeing Co. Companies will often engage with shareholder groups when support exceeds 30%.