The Most Repulsive Shareholder Proposal Ever
I’ve read a lot of shareholder proposals over the years on a wide range of issues, both those that made it into proxy statements and those that were validly excluded. Some of them have been wacky, misguided, and promoting issues that have nothing to do with corporations or the capital markets. But the proposal submitted at Microsoft Corporation by the National Legal and Policy Center (NLPC) this year may be the most repulsive one I’ve ever seen. Not only does it push a contrived narrative about employee choices over abortion, but it goes further to fan the flames of hatred being blasted towards transgender people--a trending tactic that seems to be a perversely enjoyable activity for an extremist slice of America.
Why is this proposal, which delves into the specifics of Microsoft’s employee benefits programs, even in the company’s proxy statement? How is this worthy of a shareholder vote? It appears that Microsoft did not seek No Action from the SEC to exclude the proposal from its proxy statement, and it is safe to assume they concluded that it would be a waste of time and resources now that Staff Legal Bulletin 14L has made shareholder proposals that invoke the “significant policy issues” exception to the ordinary business exclusion bullet proof (see my previous post about this).
This proposal marks a new low for the NLPC and the anti-ESG movement. It is deplorable in every sense of the word.
Here are the text of the shareholder proposal and proponent’s supporting statement and the company’s opposition statement as they appear in the proxy statement.
Proposal 5: Report on Gender-Based Compensation and Benefit Gaps (Shareholder Proposal)
National Legal and Policy Center has advised us that they intend to submit the following proposal for consideration at the Annual Meeting.
Gender-Based Compensation/Benefits Gaps and Associated Risks
WHEREAS: Compensation and benefits inequities persist across employee gender categories, and pose substantial risk to companies and society at large.
Women who choose not to abort their pre-born children, and instead decide to raise them, suffer a pay/benefits inequity compared to their company colleagues who do choose to abort their children and who receive reimbursements for expenses such as travel and lodging, when the procedures are done in a different state from where they reside for legal or other reasons.
There is significant expense both in aborting and in raising children, yet Microsoft Corporation (the “Company”) incentivizes the former with a subsidy and discourages the latter with no subsidy.(1) In fact, the latter incurs far greater expense and necessity of time out of the workplace than the former, exacerbating the compensation/benefits gap. Such policies have significant societal, operational, reputational, and competitive risks, and risks related to recruiting and retaining diverse talent.
Similarly, the Company provides health benefits to employees who suffer gender dysphoria/confusion, and who seek medical, chemical, and/or surgical treatments to aid their “transition” to their non-biological sex. The Company reports, “Not only was Microsoft an early leader in including sexual orientation in its corporate non-discrimination policy, but it continues to evolve to support employees – for instance, by broadening its health benefits to encompass medical needs for US-based transgender employees and their transgender dependents.”(2)
The Company has staked out a position on gender dysphoria/confusion which affirms that sufferers can transition to a different sex, both psychologically and physically. Yet an increasing body of scientific evidence shows distinct harms actually result from medical and surgical “transition” treatments. Examples include various long-lasting side effects like chronic pain, sexual dysfunction, unwanted hair loss and hair gain, menstrual irregularities, urinary problems, and other complications.(3) Rather than resolve mental health problems, such “gender affirming” care instead often exacerbates them. In such instances, patients who desire to “de-transition” cannot find medical or insurance coverage that they need. Many of these sufferers litigate against those who misled or mistreated them regarding the necessity and alleged “success” of “transition” therapies.(4)
Resolved: Shareholders request Microsoft report on median compensation and benefits gaps across gender as they address reproductive and gender dysphoria care, including associated policy, reputational, competitive, operational and litigative risks, and risks related to recruiting and retaining diverse talent. The report should be prepared at reasonable cost, omitting proprietary information, litigation strategy and legal compliance information.
(1) Hill, Bailee. “Company offers ‘baby bonus’ for employees in effort to combat ‘anti-family’ push towards abortion,” FoxNews.com, June 18, 2023. See https://www.foxnews.com/media/company-offers-baby-bonusemployees-effort-combat-anti-family-push-towards-abortion.
(2) Whitney-Morris, Candace. “The rainbow ripple effect: how Microsoft and its LGBTQ+ employees push for change across borders,” Microsoft.com, June 1, 2018. See https://news.microsoft.com/life/pride.
(3) Bolar, Kelsey. “‘Detransitioners’ Are Being Abandoned By Medical Professionals Who Devastated Their Bodies And Minds,” The Federalist, Feb. 10, 2023. See https://thefederalist.com/2023/02/10/detransitioners-are-beingabandoned-by-medical-professionals-who-devastated-their-bodies-and-minds/.
(4) Shellenberger, Michael. “Why This Detransitioner Is Suing Her Health Care Providers,” Public.substack.com, March 22, 2023. See https://public.substack.com/p/why-this-detransitioner-is-suing.