Netflix Inc., Uber Technologies Inc. and some of the hundreds of big companies that signed a letter Wednesday speaking up against voting-rights restrictions oppose shareholder resolutions that urge transparency about their own political and lobbying spending.
While political contributions and spending on lobbying are usually publicly available, shareholders have long urged companies to disclose more information for the sake of complete transparency. As election-related bills are introduced around the nation, these shareholder proposals could reveal whether companies are donating to politicians and organizations that also support ensuring that Americans have the right to vote.
“Relying on available data does not provide a complete picture of the company’s electoral spending,” James McRitchie, the California-based founder of CorpGov.net, writes in a Netflix NFLX, -2.48% shareholder proposal by his wife, Myra Young. “For example, payments to trade associations that may be used for election-related activities are undisclosed and unknown.”
The resolution at Netflix asks for a report on the company’s political spending that’s updated semi-annually. The proposal calls for the company to disclose direct and indirect contributions to political candidates, parties or organizations and any other related spending. The streaming giant opposed the proposal in 2019 and 2020, when it got 41.7% and 41.9% of the vote, respectively, according to McRitchie.
In opposing the proposal the previous couple of years, Netflix has said its political contributions are disclosed as required by law, and that contributions to other entities are disclosed to the IRS.
McRitchie told MarketWatch on Wednesday that Netflix has an “abysmal record even when a proposal gets over 50%,” mentioning that, for example, the company continues to require a plurality for electing its board of directors even though shareholders voted a few years ago to allow for majority votes on corporate matters.
“Voting rights are OK for citizens, but the Netflix board doesn’t want you to know who they support, and voting by their own shareholders has long been ignored,” he added. “Maybe we should all be streaming ‘The Land of Hypocrisy.’”
A Netflix spokesman said the company has no comment beyond the statements in its proxies the past couple of years. Its next proxy is due before its expected annual shareholder meeting in June.
Uber UBER, -2.33%, which also signed the letter along with its chief executive, Dara Khosrowshahi, opposes a shareholder proposal calling for a report on its lobbying activities.
“Uber does not disclose its memberships in, or payments to, trade associations and social welfare organizations, or the amounts used for lobbying at the federal and state level, including grassroots lobbying,” the proposal by the Teamsters reads.
But the company says in this year’s proxy that it believes the resolution is unnecessary. From the ride-hailing and delivery company’s opposition statement: “U.S. corporate political contributions and independent expenditures are available on our website, as is a list of 501(c)(6) trade association memberships and a summary of our U.S. Corporate Political Activity Policy.”
Uber did not return a request for further comment.
On the other hand, Uber is recommending that shareholders vote for its board proposal seeking an end to supermajority voting requirements in changing bylaws or certificate of incorporation, as well as removal of board directors.
“The board considered the fact that many of the provisions in the certificate of incorporation and bylaws subject to a supermajority standard were the result of negotiations between former management and significant stockholders,” the company said, noting that none of those former executives remain on Uber’s board.
Other tech companies that signed the “We stand for democracy” letter include Google GOOGL, -0.56% GOOG, -0.55% and Facebook Inc. FB, -2.24%, both of which have dual-class stock structures that are far from democratic. This week, Facebook in its proxy opposed a shareholder resolution calling for the social-media giant to dump that stock structure.
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