More than 800 Shareholder Resolutions Submitted in the USA

The 2003 proxy season is about to start with a record number of shareholder resolutions filed in the USA : as of February 1st, 862 resolutions have been filed at more than 2000 companies (802 resolutions in 2002). Approximately two thirds of these resolutions are linked to corporate governance issues while the remaining resolutions deal with social and environmental concerns.

Most environmental resolutions are related to global warming/climate change. For instance, some request that companies report on the various risks associated with climate change due to greenhouse gas emissions (e.g. Gillette, Caterpillar), while others urge companies to develop renewable energy sources (e.g. ChevronTexaco, ExxonMobil).

Social resolutions address in particular the question of the implementation of global labor standards. Increasing attention is being paid to the consequences of pandemic deseases in developing countries (AIDS, malaria, tuberculosis). Two types of resolutions address the issue. The first is being submitted to pharmaceutical companies (e.g. Bristol-Myers Squibb, Eli Lilly, Pfizer) and requests them to take measures to facilitate the access to medicines in the concerned countries (price of medicines, production of generics). The second is addressed to multinational companies active in the concerned countries, especially in sub-Saharan Africa (e.g. PepsiCo, Caterpillar, ExxonMobil), and requests the publication of a report on the consequences of these health pandemics on the companies’ operational activities, as well as on any measures taken in response.

As regards corporate governance resolutions, executive remuneration appears to be the main concern of shareholders this year (44% of the resolutions) : stock option expensing, performance-based options (e.g. America Express, Amgen, AOL Time Warner), linking executive pay to social performance (e.g. Bristol-Myers Squibb). The questions of limiting non-audit services performed by the external auditors will also be submitted to vote in a number of companies (e.g. Bank of America, Harley-Davidson and Hewlett-Packard).