Shareholder Activism on the Rise at These Two Major Companies

An attention-grabbing 29% of Wells Fargo WFC shareholders, on average, endorsed proposals to bolster workers’ rights and improve transparency on political lobbying. Meanwhile, nearly a third of IBM IBM investors endorsed setting sweeping emissions targets, in the latest news from proxy voting season.

Even if these measures failed, analysts believe voting support above 25% catches the board’s attention.

Wells Fargo

Wells Fargo faced several shareholder proposals, of which three addressed social themes and three addressed the bank’s political influence. You can find the proposals and Wells’ responses here.

• 30.6% of shareholders supported a proposal for Wells to hire a third party to assess the bank’s respect for freedom of association and collective bargaining.
• 28.5% voted that Wells should report on how effective its efforts to prevent worker harassment and discrimination are, including the total number and dollar amount of disputes settled by Wells related to abuse, harassment, or discrimination in the past three years. Wells has faced significant allegations of workplace sexual harassment and discrimination, in addition to class action lawsuits and penalties. Writes Ignacio Garcia Giner, an analyst at Morningstar Sustainalytics’ stewardship program voting service: Investors “would benefit from further reporting into the company’s use of concealment clauses, as well as on further quantifying the outcomes of settled and pending harassment and discrimination claims.”
• 24.1% also agreed that Wells should report on the effectiveness of its policies to respect the human rights of Indigenous people in its corporate and project financing. Similar proposals were filed at the 2024 annual meetings for Citigroup C and JPMorgan Chase JPM.

In this election year, similar support levels could be seen in proposals addressing Wells Fargo’s political spending.

• 36.1% voted that Wells should report annually on its company policies and behavior around lobbying, as well as its payments and memberships in organizations that write and endorse model legislation. While the company plans to enhance its disclosures, Sustainalytics analyst Matteo Felleca notes that Wells doesn’t disclose its complete list of trade association memberships and payments.
• 28.0% agree that Wells should report on how it’s aligning its lobbying and policy influence activities with its public commitment to achieve net zero emissions by 2050.
• 25.3% voted that Wells conduct a “congruency analysis” between its stated corporate values and company contributions to electioneering or organizations affecting public policy.

Writes Andrew Spurr of Sustainalytics: “Misalignments between companies’ stated positions, on topics like climate action, gender diversity, and reproductive health, and political expenditures and activities have come under increased public scrutiny in recent years, with potential reputational and financial consequences. High average shareholder support for political activities disclosure in recent years reflects shareholders’ concern about the marketwide impacts of corporate influence over public policy, as well as company-specific reputational risks arising out of a misalignment between public statements and political activities and expenditure. A reconciliation of Wells Fargo’s political and electioneering expenditures against stated company values and policies is key to investors.”

Morningstar Sustainalytics advised investors to vote in favor of these proposals.

Nearly a Third of IBM Investors Favor Setting Sweeping Emissions Targets

Proposals relating to goals related to greenhouse gas emissions reduction, and climate transition plans, are the leading category of climate-related proposals this year, accounting for 28% of resolutions, according to the nonprofit organization Ceres. On April 30, 31% of IBM investors voted to ask IBM to set comprehensive climate emissions targets, according to Green Century Capital Management, which made the proposal.

For all that IBM has trumpeted its emissions-cutting, “IBM has declined to consider the vast majority of its indirect emissions during its target-setting process,” Green Century said in a statement, unlike competitors Hewlett Packard Enterprise HPE, Microsoft MSFT, and Salesforce CRM. “For example, its target does not include emissions generated when customers run IBM hardware or from its employees’ business travel.” You can read the IBM proxy here.

What’s Next?

On May 14, Cummins CMI shareholders will vote on whether to link executive compensation to the company achieving emissions reductions in line with the Paris Agreement’s goal to limit global warming to 1.5 degrees above preindustrial levels, across its full value chain. Warren Wilson College made the proposal. You can find the full proposal, as well as the enginemaker’s response, here.

Last year’s heat broke records. According to 2024 Pay for Climate Performance, a report by shareholder advocacy group As You Sow, over a third of the 100 companies examined in the report didn’t include a climate incentive tied to the CEO compensation package. Cummins was one of them. Some 66 companies do include a climate metric, but only 30% have a measurable climate incentive.

“To ensure that climate-related pay linkages, where they exist, do more than enrich well-paid CEOs, investors should scrutinize compensation design and the rigor of climate metrics to ensure companies are effectively motivating CEOs to prioritize climate action and ensure long-term financial sustainability,” according to the report.

Writes Jackie Cook, who oversees the stewardship program’s voting service at Morningstar Sustainalytics, “Credible climate plans need to link strategy to senior decision-makers’ performance targets and incentive pay.”

Finally, Dine Brands Global DIN shareholders vote on May 14 on a proposal about board practices. Specifically, Dine is being asked to report on the board’s governance practices regarding its climate change policies and its lack of climate change risk disclosures and to adopt measurable targets for reducing emissions.

Dine owns and franchises thousands of restaurants under the Applebee’s and International House of Pancakes names. Yet climate change isn’t acknowledged in its risk disclosures. “A board asleep at the wheel through the climate crisis would be a nightmare for shareholders,” according to the resolution filed by The Accountability Board. By contrast, the filer noted, McDonald’s MCD publishes a comprehensive Climate Risk and Resiliency report.

Writes Cook: “Agriculture is a significant contributor to annual global greenhouse gas emissions, including some of the most potent—methane and nitrous oxide. More food companies are being asked to measure and set targets on their emissions. Earlier in the season, a resolution at Jack In the Box JACK asking the company to disclose its GHG emissions earned 57% support. The proposal on Dine’s proxy asks the company to expand on its governance of climate risk and set emissions reduction targets.”