Citicorp Shareholders Reflect Occupy’s Impact on Corporate Narrative

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April 21, 2012; Source: Oil & Gas Financial Journal

For whatever one might think about the positions of the Occupy Wall Street movement, just go ask Citicorp’s Vikram Pandit about Occupy’s impact on changing the contemporary narrative. Citicorp shareholders just voted to reject Pandit’s $15 million compensation package, an event that, by all accounts, he and Citicorp’s top brass didn’t anticipate. The Citicorp vote reflects both the new Occupy narrative being injected into shareholder actions and the importance of legislative change, as the ability of shareholders to take that vote on Pandit’s compensation came as a result of the “say-on-pay” provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The vote was only advisory, but it served as quite a bucket of cold water on Citicorp’s governing trustees.

Foundations, among other institutional shareholders, have been increasingly active in this line of work, and shareholder actions have long been necessary to rein in the excesses of some corporations on salary and other matters. The corporations that are the subjects of such actions don’t always see it that way. A headline story in the Washington Business Journal reprinted in the Oil & Gas Financial Journal views the Occupy Wall Street agenda—or, more specifically, the agenda of the 99% Spring coalition, now known as the 99% Power coalition—as a plan for disrupting shareholders meetings. As stated in the WBJ, “The folks who brought you Occupy Wall Street last year may confront you at your next shareholder meeting.” Reuters reports that 99% Power has plans to show up at the shareholder meetings of 36 corporations.

According to the story, Occupiers have already shown up at the meetings of EQT Corporation, Carnival Cruise Lines, and BNY Mellon, and are moving to Wells Fargo and General Electric next week. Other targets reportedly on the shareholder meeting list include Hershey, Peabody Coal, the Bank of America, Wellpoint, Pepco, Amazon, Comcast, NextEra Energy, and Wal-Mart. What’s interesting, if the Occupy people can pull it off, is that the issue or topic for each corporation is different. Rather than a generic anti-corporate message, the Occupy protesters plan to raise points specific to individual corporations. For instance, the demonstrators will call out Wellpoint’s support of the U.S. Chamber of Commerce’s political lobbying against the Obama administration’s health reform program and Wells Fargo’s investments in private prisons and of course its mortgage foreclosure policies.

A Forbes columnist credits the Occupy organizers with changing the narrative behind shareholder meetings: “It is interesting to note how communications and influence travel. The term ‘income inequality’ has been in the news more times than I can count (e.g. at least thousands)… The communications line zig zags back to the streets via The Occupy Wall Street movement which addresses those victimized by income inequality as  ‘the other 99%’ and the popularity spreads further. A mere few Fortune 100 CEOs pay attention to the group and meet with them. Most don’t. The term is now reinforced through shareholders rights groups. Bang!  Citigroup happens.”

The shareholder activist groups have an interesting dilemma themselves. How are they going to work with this new infusion of energy, some of which is geared not simply to raising issues from the floor of shareholder meetings, but non-violent direct action? Longtime corporate shareholder gadfly, 82-year-old Evelyn Davis, says she is skipping this year’s roster of shareholder meetings, in part, because of Occupy Wall Street. Davis told Reuters that the Occupy crowd “should have made a point and then left…They overstayed their welcome.”

Corporate shareholders will now face inside and outside strategies from Occupy Wall Street, as the group plans to challenge corporations’ CEO salaries, environmental policies, and political donations from the inside while working to define society’s new narrative about the corporate sector with the public and the press on the outside. According to a writer for the Atlantic Wire, “It’s now clear from [the Citicorp] shareholder move that it isn’t just Occupy Wall Streeters who are annoyed with the outrageous sums that top executives take home. Now they’re actively trying to do something about it.”

An important reminder for the nonprofits watching the 99% Power shareholder actions: Unlike the notion of nonprofits endorsing and campaigning for political candidates, which is prohibited by 501(c)(3) regulations, Occupy-type actions inside and outside of shareholder meetings are entirely legal for nonprofits and foundations. Voting one’s principles as a shareholder or a protester about what a corporation does to the community and society is entirely legitimate.  Now, with the changed “inequity” narrative brought to the public by the Occupy movement, shareholder actions of this sort are not just allowable, but critically important for the nonprofit sector.—Rick Cohen