T. Rowe Price's report: “For or Against? The Year in Shareholder Resolutions—2022” largely reflects its company-specific approach to evaluating proxy proposals in light of particular facts and circumstances. Overall, for the period ended December 31, 2022, T. Rowe supported 21% of 143 environmental proposals, 11% of social proposals, and 32% of political spending & lobbying proposals.
Notably, consistent with statements made by other institutional investors last year, T. Rowe observed and discusses a decline in the overall quality of shareholder proposals in 2022 coupled with an increase in proposal volume (attributed in part to SLB 14L) and prescriptiveness.
The SEC allowed more proposals across a wider range of environmental and social topics to move forward. Our observation is that the increase in the volume of proposals resulted in a decrease in their overall quality. We observed more inaccuracies in proposals this year, more poorly targeted resolutions, and more proposals addressing non‑core issues… In addition, we observed a marked increase in the level of prescriptive requests. Proponents have moved swiftly from disclosure‑based requests (seeking additional reporting on ESG matters) to action‑based requests (seeking specific commitments, capital investments, or structural changes from the targeted companies). At the same time, proponents exhibited a lower propensity to negotiate settlements with issuers before taking a proposal to a vote.
The report provides voting data and associated insights on T. Rowe's approach to proposals across a number of key topics including environmental (and climate, specifically), social, and political spending / lobbying, as well as anti-nuclear power and anti-ESG proposals, in addition to its instructive voting decision-making framework, which considers, among other factors, whether a particular proposal’s ask is properly targeted at companies or by shareholders.
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This post first appeared in the weekly Society Alert!