A “books and records” action brought by New York’s comptroller to determine how Qualcomm Incorporated “is spending corporate funds in the political arena” may create a precedent for shareholders seeking to force corporate disclosure of political contributions.
The suit was brought last week in Delaware Chancery Court by Comptroller Thomas DiNapoli as trustee of the New York State Common Retirement Fund, a shareholder of Qualcomm. The complaint cites to recent studies concluding that “corporate political spending is negatively correlated with enterprise value” and may indicate “more widespread control and governance deficiencies.”
Continue reading New York Comptroller Seeks Qualcomm’s Records on Political Giving; SEC Contemplating Political Contribution Disclosure Rules
Perhaps not surprising in an election year, the hottest trend in stockholder proposals this proxy season has been submission of resolutions focused on political spending. As reported in this Washington Post article, the Sustainable Investments Institute, a Washington nonprofit that tracks stockholder resolutions, found that approximately one-third of stockholder resolutions this proxy season related to political spending disclosure. In general, these resolutions focus on disclosure of all political spending using corporate funds, including payments made to 501(c)(4) trade organizations that engage in lobbying or political campaigning.
Continue reading Political Spending Stockholder Resolution Early Returns – Low Vote/High Settlement
As a follow-up to our post of February 7th regarding increased stockholder interest in the disclosure by public companies of their political expenditures and activities, we note that in a speech to securities law practitioners on February 24, 2012, SEC Commissioner Luis A. Aguilar called for the SEC to adopt rules requiring public companies to provide uniform and consistent disclosure of their corporate political expenditures. “Requiring transparency for corporate political expenditures cannot wait,” Commissioner Aguilar stated, citing the SEC’s responsibility to “ensure that investors are not left in the dark while their money is used without their knowledge or consent.”
Continue reading SEC Commissioners Comment on Political Expense Disclosure
Investors and shareholder activists have become increasingly focused on the oversight and disclosure of political expenditures by public companies since the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission, which invalidated restrictions on certain corporate political spending. Because the 2012 presidential election is expected to be a hotly contested race funded by record levels of political spending, the public’s interest in political and lobbying expenditures by public companies is intensifying and merits a careful review of recent trends in the policies and disclosure practices of public companies with respect to their political spending.
Continue reading Shareholder Pressure Increases for Disclosure of Lobbying Activities and Other Political Expenditures