AB Predisclosed Vote Intention - 2022

 

AB views proxy voting as an integral part of responsible investing. As a research-driven firm, we approach our proxy voting responsibilities with the same commitment to rigorous research that we apply to all our investment activities.

Our voting efforts are linked with engagements to communicate our perspectives to portfolio companies in seeking sustainable, long-term shareholder value for our clients’ best interest.

AB’s commitment to maximize the long-term value of clients’ portfolios drives how we analyze each proposal, whether coming from management or a shareholder. We think it is in our clients’ best interests to incorporate a more comprehensive set of risks and opportunities, such as ESG and climate issues, from a long-term shareholder value perspective. Rather than opting to automatically support all proposals that mention an ESG or climate issue, we evaluate whether or not each proposal promotes genuine improvement in the way a company addresses an ESG or broader oversight, thereby enhancing shareholder value for our clients in managing a more comprehensive set of risks and opportunities for the company’s business.

Proposal Rationale Management Recommendation AB Predisclosed Vote Intention


"Resolved: Shareholders of Apple Inc. ('Apple') ask that the Board of Directors prepare a public report assessing the potential risks to the company associated with its use of concealment clauses in the context of harassment, discrimination and other unlawful acts. The report should be prepared at reasonable cost and omit proprietary and personal information."

 
The Proposal’s use of the term “Concealment Clause” refers generally to the confidentiality, non-disclosure, and mandatory arbitration clauses that may be included in settlements of matters relating to sexual harassment, discrimination, and other unlawful acts. While we appreciate the company has increased the availability of mandatory training on proper conduct, we are concerned that training alone has not prevented harassment cases at other companies. We also appreciate the Company has committed to remove Concealment Clauses from U.S. separation agreements going forward to allow departing employees to discuss their experiences.  However, we are supporting the proposal because we believe further reporting on Concealment Clauses will encourage Apple to engage with shareholders to further explore best practices in this area. AGAINST FOR

Proposal Rationale Management Recommendation AB Predisclosed Vote Intention
“Resolved: Shareholders ask the Board of The Coca-Cola Company (the ‘Company’ or ‘Coke’) to commission and disclose a report on the external public health costs created by the Company’s food and beverage businesses and the manner in which such costs may affect its diversified shareholders, whose ability to meet their financial goals depends primarily on overall market returns rather than the relative performance of individual companies.” While we agree that product health and nutrition is a material ESG risk for Coca-Cola, the company is significantly addressing the asks put forward by the proponent. Coca-Cola is taking clear action around reducing the sugar content of their products, while quantifying and disclosing the results of their progress and setting robust, forward-looking goals related to health. Actions include introducing new products and making public commitments and pledges to considerably reduce sugar in their beverages. The company acknowledges that factors such as health-related concerns and evolving consumer preferences are impactful to their business and is accordingly taking meaningful steps to improve their product formulas and manage risks related to public health. AGAINST AGAINST

Proposal Rationale Management Recommendation AB Predisclosed Vote Intention
"Resolved: Shareholders of Amazon.com, Inc. (“Amazon”) ask that the Board of Directors prepare a public report assessing the potential risks to the company associated with its use of concealment clauses in the context of harassment, discrimination and other unlawful acts. The report should be prepared at reasonable cost and omit proprietary and personal information." In absence of sufficient data to assess the impact of existing concealment clauses on the Company’s employees’ ability to raise concerns on harassment and discrimination, greater transparency on the Company’s concealment clauses in all forms would add value for shareholders to understand the potential risks.  AGAINST FOR

Resolved: Shareholders request the Board of Directors commission an independent study of Rekognition and report to shareholders regarding:

  • The extent to which such technology may endanger, threaten or violate privacy and/or civil rights, and unfairly or disproportionately target or surveil people of color, immigrants and activists in the United States;
  • The extent to which such technologies may be marketed and sold to authoritarian or repressive governments, including those identified by the United States Department of State Country Reports on Human Rights Practices;
  • The potential loss of good will and other financial risks associated with these human rights issues;


The report should be produced at reasonable expense, exclude proprietary or legally privileged information and be published no later than September 1st, 2022."

We agree with the proponent that Amazon should perform a similar exercise for Rekognition as it has done with Ring. Simply because Rekognition product isn’t used as a surveillance tool or isn’t intended as a surveillance tool does not guarantee the absence of misuse cases or potentially harmful impact on users and communities.

We also note that the company isn't necessarily bound by the timeline requested by the proponent, given the advisory nature of the proposal.
AGAINST FOR

Proposal Rationale Management Recommendation AB Predisclosed Vote Intention
Election of Director Peggy Alford
  • As a nominating and governance committee chair: Absence of sunset provision amidst the maintained multi-class equity structure with unequal voting rights warrant a negative vote based on AB's Proxy Votign and Governance Policy. The concern is exacerbated by teh fact that the vote outcomes are effectively controlled by the founder amidst majority voting standard.
  • As a compensation committee chair: Unresolved multi-year structural misalignment between pay and performance warrant a negative vote towards the compensation committee chair as well as all of the committee incumbents.
FOR WITHHOLD
Election of Director Marc L. Andreessen Unresolved multi-year structural misalignment between pay and performance warrant a negative vote towards the compensation committee chair as well as all of the committee incumbents. FOR WITHHOLD
Election of Director Andrew W. Houston Unresolved multi-year structural misalignment between pay and performance warrant a negative vote towards the compensation committee chair as well as all of the committee incumbents. FOR WITHHOLD
Advisory Vote to Ratify Named Executive Officers' Compensation The Company continues to lack any discussion of metrics used to measure the company performance and individual performance used for determining the executives’ bonus payout. In the meantime, NEOs continue to receive target level bonus award at minimum. The Company also continues to pay certain NEOs at a CEO level. FOR AGAINST
"Resolved: Shareholders of Meta Platforms, Inc. (‘Meta’) ask that the Board of Directors prepare a public report assessing the potential risks to the company associated with its use of concealment clauses in the context of harassment, discrimination and other unlawful acts. The report should be prepared at reasonable cost and omit proprietary and personal information.” In absence of sufficient data to assess the impact of existing concealment clauses on the Company’s employees’ ability to raise concerns on harassment and discrimination, greater transparency on the Company’s concealment clauses in all forms would add value for shareholders to understand the potential risks. AGAINST FOR