All publicly traded companies hold annual general meetings (AGMs) during which shareholders cast votes on a variety of issues, including shareholder resolutions as well as governance matters like the election of directors and executive compensation packages.
The funds managed by Wespath hold shares in nearly 5,000 companies, and we have the opportunity to vote at each of their respective AGMs.
In the absence of more direct engagement, proxy voting is an important tool for fiduciaries, as it offers a format to express concerns and encourage sustainable business practices. Generally, we support shareholder resolutions that promote long-term value creation and incorporate environmental, social and governance (ESG) issues into corporate strategy.
Proxy Voting Guidelines
All of our proxy votes are cast in accordance with our Proxy Voting Guidelines, which are annually updated and approved by our Board of Directors. The values of The United Methodist Church (UMC), as well as our understanding of the responsibilities of prudent fiduciaries, help shape these guidelines. They are organized in four main sections:
- Board of Directors
- Executive Compensation
- Shareholder Rights
- Environmental and Social Factors
- Securities Lending Program
We engage Glass Lewis, a leading proxy analysis firm, and other data sources to help us execute our policy. Resources like those offered by Glass Lewis help us review and understand resolutions and proposals, and although our staff votes the ballots of many large holdings on a case-by-case basis, Glass Lewis also assists in executing certain votes. Wespath’s proxy voting record can be found here.
Proxy Voting Examples
In recent years, Wespath’s proxy voting activity has extended throughout the ESG spectrum and touched on several key sustainability topics.
Environmental: JPMorgan Chase & Co.
Aligning Greenhouse Gas (GHG) Reduction Targets and Reporting with Paris Agreement
In response to heightened awareness of the business risks associated with climate change, investors are increasingly asking companies to set emissions reduction targets and share data aligned with the Paris Climate Agreement. In 2020, Wespath voted in favor of a resolution asking JPMorgan Chase & Co. to set such targets and publish Paris-aligned climate risk reports. This proposal is a step in the right direction for the banking giant and is consistent with Wespath’s previous climate-related engagements.
Percentage of total votes cast in favor of the resolution: 48.7%
Report on Board Oversight of Civil and Human Rights Risk
Social media giant Facebook has been the subject of public scrutiny for how it monitors hate speech on its platform. This scrutiny can have investment implications. With this in mind, Wespath voted in favor of a proposal asking Facebook for a report on how it assesses and mitigates risks associated with civil and human rights.
Percentage of total votes cast in favor of the resolution: 7.2%
Wespath’s Proxy Voting Guidelines request disclosure of a company’s lobbying-related expenditures, trade association payments and board-level oversight mechanisms. Consistent with this policy, Wespath voted in favor of a recent proposal seeking a lobbying report from e-commerce leader Amazon.
Percentage of total votes cast in favor of the resolution: 29.9%