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  • Doug Chia

The Question I Asked at This Year's Virtual Shareholder Meetings

As in 2020, I attended a number of virtual shareholder meetings (VSMs) this year, including Visa, Apple, Disney, AmerisourceBergen, Carrier, Bristol-Myers Squibb, JPMorgan Chase, McDonald's, BlackRock, ExxonMobil, and Facebook. On the whole, not much was different from what I saw in 2020. I'm hoping we'll see companies put more thought and effort into their VSMs in 2022. We'll definitely see many companies go back to the in-person format for various reasons, but after a one-year retreat, the VSM trend should go up in 2023 and beyond. I highly doubt there will be a meaningful uptick in the hybrid model, despite the continued hopes of some investors.

My Question on PACs...

I tested the waters more with the Q&A function this year, submitting a standard question at some of the VSMs I attended about corporate political action committees (PACs) along the lines of this template (using my fictitious Tao Company as a placeholder):

The Tao Company and its PAC paused all political giving after the events at the Capitol building in Washington, DC on January 6, 2021. Will Tao consider completely dissolving its PAC as other companies, such as Charles Schwab, have done? Given the size of the The Tao Company's operations and its name recognition, Tao would have no problem gaining access to members of Congress without making PAC contributions.

(You'll recall my prior writing on PACs.)

...and the Answers

To my disappointment, but not my surprise, not every company provided an answer. The companies that answered my question during the live Q&A had this to say:

Visa: Chairman/CEO Al Kelly responded, "I think we were one of the very first companies that immediately after the insurrection on the Capitol on January 6, we made an immediate decision to temporarily suspend, as the questioner so notes, all political donations from our Political Action Committee fund. But beyond that, I will tell you that we do not have plans to completely dissolve the PAC." (From meeting transcript.)

JPMorgan Chase: Chairman/CEO Jamie Dimon responded that the company is not going to dissolve its PAC unless everyone else (I assumed he meant peer companies in the financial services industry) dissolves their PACs. He further said that the company would announce more on how its PAC will be run going forward. (It has since been reported that JPMorgan Chase announced in an internal memo that its PAC will resume giving, but continue to withhold from a "handful" of the 147 lawmakers who voted against certifying the electoral results of the 2020 presidential election.)

The companies that answered my question in a written Q&A posted on their website said this:

Amazon: "Following the events at the Capitol building on January 6, we decided to suspend PAC contributions to any Member of Congress who voted to override the results of the U.S. Presidential election. That policy has not changed."

McDonald's: "As a Company, our guiding light is doing what’s best for our employees and the communities we serve. Following the events at the Capitol earlier this year, the McDonald’s PAC Steering Committee paused contributions to political officials. The McDonald’s PAC Board is currently evaluating future contributions. The PAC is a separate entity managed by McDonald’s owner-operators and corporate employees, which prevents the Company from being able to unilaterally dissolve the PAC."

Unpausing PACs

While we're on the subject of PACs, it's worth noting that a number of companies that paused PAC contributions after January 6, 2021 have since resumed making contributions to lawmakers, including some of the 147. JetBlue Airways was the first, making a $1,000 contribution to Republican Congresswoman Nicole Malliotakis who represents Staten Island, New York.

Written Q&A Document to Look At

One company, whose VSM I watched after it was originally aired, posted a written Q&A document that was a lot more extensive than the typical ones I've seen thus far. Take a look at what Dow Inc. posted. This could be because at the VSM they only responded to questions that had been submitted in advance. (Some shareholder advocates have suspected Dow Inc. of having put on a VSM that purportedly was live, but actually was entirely pre-recorded, although this has not been verified. I wrote about this type of bad practice a few days ago).

1 comment

1 Comment

Jun 23, 2021

At most companies, the problem isn't their PAC. It is money they channel through dark channels to candidates. Similar to lobbying, companies don't often want to be upfront about what may be unpopular positions (or potentially unpopular candidates).

For most of my career I headed environmental protection efforts for my department in California. Often, Chevron or other companies would appear to be neutral or only mildly concerned. However, their trade associations, like Western State Petroleum, did the work that companies did not want to be directly associated with. The money that supports such organization is what most of the battles are about.


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