A report that was recently released by the American Federation of Labor-Congress of Industrial Organizations(AFL-CIO) can help investors identify important and often contentious U.S. proxy issues and find out how key market participants voted on them.
Each year, the AFL-CIO conducts a survey of voting on approximately two dozen proxy issues that it views as particularly significant and produces a report of its findings. Votes cast by investment managers, mutual funds and proxy voting firms are sought and compiled, and ultimately judged by scoring them against decisions made by the AFL-CIO under its proxy voting guidelines.
The AFL-CIO surveyed proxy voters on shareholder proposals that asked U.S. companies for information about the political contributions they made and the executive compensation they paid. Other proposals requested evidence of efforts to reduce risks related to workplace safety at companies where there is recent evidence of unaddressed hazard to employees. Proposals on the election and removal of directors were also included in the survey list.
A firm is assessed as ‘top tier’ if its votes agreed with those of the AFL-CIO on each survey issue it considered. Those who have some familiarity with U.S. investment managers and mutual fund companies will be unsurprised to find socially responsible investment firms Calvert Investments, Domini Social Investments and Trillium Asset Management among the 26 firms in the top tier.
‘Bottom Tier’ firms are those that agreed with fewer than half of AFL-CIO’s vote decisions or who simply refused to report their votes at all. Fidelity Investments, JPMorgan Asset Management and Morgan Stanley are among the 47 constituents of this group.
The first Key Proxy Vote Survey was published in the late 1990s, and was the inspiration for similar and ongoing annual survey reports by the Trades Union Congress in the UK and by SHARE in Canada.