Trucks
containing cases of Coca-Cola, which will be delivered to stores, sit outside a warehouse at the Swire Coca-Cola facility in Draper, Utah March 9, 2011. (Credit: Reuters/George Frey) |
(Reuters) -
A dozen U.S. companies have agreed to disclose more about their lobbying
efforts in return for avoiding public showdowns at their annual meetings, a
sign of growing traction for corporate governance reforms this year.
Companies
including Coca-Cola Co (KO.N), General Electric Co. (GE.N) and Johnson &
Johnson (JNJ.N) have agreed to make available more details about areas like
trade association memberships and top policy issues, according to a tally of
2012 reforms kept by activist investor Walden Asset Management.
In return
for the changes, the Boston fund shop said it or its investor allies agreed to
withdraw proxy proposals they had submitted in advance of this spring's season
for corporate annual meetings.
Though some
of the lobbying information was already available in government databases, much
of it was too obscure for the average investor to track down, said Tim Smith,
senior vice president at Walden who helped lead the disclosure campaign. Smith
said the company actions show the disclosures are not just a pet concern of
so-called socially responsible investors.
"This
is significant because the companies see it as being a good business
practice," Smith said.
Spokespeople
for GE, J&J and Coke did not immediately respond to questions.
Another 22
company activists targeted for lobbying disclosure have not announced any
changes or concessions yet. As a result, Smith said, the issue will be debated
and voted on at their upcoming annual shareholder meetings.
Groups
allied with Walden that filed similar resolutions include the public-sector
labor union the American Federation of State, County and Municipal Employees;
the New York State Common Retirement Fund; and several religious orders. In
recent years, the investors have built a successful record of pressing for
change on a variety of issues that are now common practice or law such as
shareholder advisory votes on executive pay.
Those votes
and other scrutiny companies are getting from proxy-advisory firms are leading
to a faster pace of governance changes, said Paul Hodgson, senior research
associate at GMI Ratings. The New York-based organization tracks shareholder
votes and has supported some changes such as separating the roles of chief
executives and Board Chairmen -- a major focus of AFSCME this year.
"Companies
know that giving in early or compromising is easier than the embarrassment of
losing a high profile vote," Hodgson said in an e-mail.
Corporate
spending to influence public policy has been a hot issue since a 2010 U.S.
Supreme Court decision lifted limits on election spending by companies and
unions. Smith and others are also part of an effort to get companies to agree
to disclose political contributions led by the Center for Political Accountability
in Washington.
In March,
it said 100 companies agreed to disclose direct political contributions and
indirect spending through trade associations and similar groups.
Among the
companies where activists withdrew proxy proposals, the details vary and may be
considered minor by some measures. For instance, Coca-Cola had already
published a number of disclosures such as an online listing of its top policy
priorities: corporate taxation, product-specific rules and environmental rules.
Under a
deal with Walden, the Atlanta-based beverage company will now provide more
detail about how it sets its priorities, plus more details such as on trade
association payments, according to Walden.
(Reporting
By Ross Kerber; editing by Aaron Pressman and M.D. Golan)
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