Legal & General to Jeff Bezos: drop dead

This is interesting. Legal & General Investment Management is planning to vote against the election of several Amazon directors, including founder, former CEO, amateur astronaut and full-time bodybuilder Jeffrey P. Bezos.

Amazon’s annual general meeting is being held on Wednesday and 19 issues are set to be voted upon, 15 of which are shareholder proposals — the most since 2010. Our colleagues at the FT have written a good curtain-raiser on what might be a testy AGM.

Most notably, LGIM appears to be going to war with the online retailing giant. According to a blog post laying out L&G’s voting intentions in the coming AGM season, the £1.3tn investment arm of the UK insurance group plans to vote against management on a whole range of issues.

Here is LGIM’s rationale for voting down Bezos:

LGIM intends to vote against the proposal as LGIM expects a board to be regularly refreshed in order to maintain an appropriate mix of independence, relevant skills, experience, tenure and background. LGIM also considers the CEO of the company to be accountable for any longstanding ESG failings.

That’s not all. LGIM is also planning to vote against the re-election of Daniel Huttenlocher, the dean of MIT’s computing college, and Judith McGrath, the former chair and CEO of MTV. They respectively sit on and chair Amazon’s development and compensation committee, which LGIM believes “is accountable for human capital management failings”.

A vote against is also applied as an escalation to remuneration concerns as LGIM has had concerns with the remuneration policy for the past year.

LGIM also plans to vote against Amazon’s recommendations on setting up an independent investigation into the company’s human rights issues; on a policy to include non-management employees on the board; and in favour of commissioning reports examining health and safety disparities among Amazon’s workers, its use of concealment clauses, warehouse working conditions, gender and racial pay gaps, tax transparency at the company and whether it protects the rights to freedom of association and collective bargaining.

Here is the asset manager’s overall view:

LGIM continues to engage with Amazon.com Inc on all of these issues and to push the company to disclose extra information and to be more and more transparent in its disclosures in order that shareholders can effectively evaluate its policies, actions and accountability.

Now, we don’t think Bezos is quaking in his cowboy boots about LGIM’s voting intentions. While LGIM is Amazon’s 14th biggest shareholder, with 2.93mn shares worth an estimated $9.5bn at the end of the first quarter, this only represents 0.58 per cent of Amazon’s outstanding stock. Bezos himself controls 9.8 per cent.

But it does show how some asset managers are beginning to walk the walk on some of the ESG talk. Schroders also said last week that it would be voting against Amazon management’s recommendations in the three workers’ rights-related resolutions. From their statement:

These are a request for a report on worker health and safety differences; a request for additional reporting on freedom of association and a request for a report on warehouse working conditions,” said Tim Goodman, Schroders’ Head of Corporate Governance.

We believe it is important to support these proposals, which align with our own engagement with the company, call for greater disclosure and promote stronger workers’ rights.

Schroders said it was “also considering other agenda items at this meeting and is likely to be voting against the board’s recommendations for other proposals in addition to those detailed above”.

A majority of institutions don’t disclose how they are going to vote, but transparency is thankfully on the uptick.

Norway’s sovereign wealth fund, a top-10 shareholder with 0.83 per cent of Amazon’s stock, has said it will vote in favour of the entire board line-up, but against management on proposals to commission reports on reducing plastic use; tax transparency; unionisation at the company; working conditions at its warehouses; and Amazon’s facial recognition system Rekognition over privacy concerns.

https://www.ft.com/content/5191d044-c36f-4385-989f-2cba3a5ba024