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Jamie Dimon had some choice words for investors this week, telling the audience at the Council of Institutional Investors Fall Conference that shareholder meetings have become a “frivolous waste of time” due to special interest groups. This came at the same time that Exxon defended its actions against what it described as activists. CEO Darren Woods said his company’s lawsuit against Arjuna Capital to remove the firm’s climate-related proposal was the “definition of good governance” because they were not true investors, but rather activists pursuing an agenda. He vowed to target future shareholder proposal filers that were not in line with the SEC’s rules.
Sullivan & Cromwell shed some light on the source of these frustrations in its latest webinar, “Lessons from the 2024 Proxy Season and Trends for 2025.” So far in 2024, it noted shareholder proposals continued to increase in number with 56% of S&P 500 companies receiving at least one proposal and heightened activity from special interest groups: a 200% increase in labor union submissions and a 21% increase in anti-ESG proposals after more than tripling between 2021 and H1 2023.
Retail companies were targeted more than any other sector, which S&C attributes to the name recognition and, therefore, the media attention these brands draw. Reuters ties this increasing activist pressure to shorter CEO tenures at consumer goods companies as boards move quickly to quell trouble, citing examples like Starbucks’ Laxman Narasimhan and Nestle’s Mark Schneider.
Speaking of recognizable brands, Southwest Airlines announced this week that Gary Kelly will step down as the company’s chair following pressure from Elliott as the activist recently built a large enough stake to call a special meeting, while Nelson Peltz stepped down after 17 years as Wendy’s chair.
Have a great weekend,
GPP team
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