June 8, 2023

Allocators Targeted Amazon Policies in Failed May Proxy Vote

One in three shareholders, including pension funds like CalPERS, opposed the online retail giant at its annual meeting on such issues as executive pay.

Reported by Larry Light

Amazon, the target of a unionization drive at its warehouses and of a host of employee complaints regarding safety and other issues, turned back a large number of proposals from outside investor resolutions knocking the company’s policies at its May 24 annual meeting, held virtually.

But an important group of asset allocators voted against the e-commerce giant’s pay practices, including the California Public Employees’ Retirement System, the California State Teachers’ Retirement System and the New York State Common Retirement Fund, according to a Morningstar research report.

Almost one-third of the company’s stockholders voted against the company’s executive compensation plan. This issue is “a key area of dissent for Amazon shareholders—as it often is at many companies,” wrote Lindsey Stewart, director of investment stewardship research on Morningstar’s global manager research team. A similar vote opposed Judith McGrath, chair of Amazon’s leadership and compensation team.

One of the biggest gripes from allocators, the Morningstar report said, was what they saw as “insufficient demonstrable links between pay and company performance over the past year.” CalPERS and New York Common confirmed they were among the votes against the executive pay packages. CalSTRS would not comment.

Amazon’s sales slumped last year after a pandemic surge and only began re-accelerating in this year’s first quarter. CEO Andrew Jassy took a huge pay cut last year, to $1.3 million from $212 million in 2021. Another defeated shareholder proposal, which attracted just 6.5% of the vote, aimed to link worker pay to executive compensation. Amazon last September raised the starting pay of its warehouse and delivery workers by $1 to $19 an hour.

Amazon dismissed the shareholder resolutions, saying in a point-by-point response that it respected collective bargaining and that its executive pay was in line with its goal of attracting and keeping talent. A spokesman added, in reference to the shareholder resolutions in general: “These proposals did not pass with a majority of the vote at this year’s shareholder meeting, and they secured lower votes in favor than last year.”

This is true, a perusal of this year’s regulatory filing on proxies showed, compared to the regulatory filing for last year’s vote. For instance, a bid to increase unionization garnered 34.6% this year, off from the 2022 tally of 38.6%.

The anti-Amazon resolutions were brought by a batch of different organizations, from the AFL-CIO to the American Baptist Home Mission Society.

“When over one-third of shareholders call for changes to the way Amazon treats its workers, we believe management and the board have an obligation to respond,” wrote Nadira Narine, senior program director at the Interfaith Center on Corporate Responsibility, which helped coordinate the proxy campaign against Amazon.

Institutional Shareholder Services Inc., which owns CIO, backed several of the outside shareholder resolutions.