Amazon workers who have been pushing their employer to take stronger action on climate change fear that a new set of rules proposed by the Securities and Exchange Commission will suppress shareholder activism.
If approved, the proposed rules would lift the threshold on the amount of stock an employee is required to own in order to submit resolutions for a vote by fellow shareholders. Currently, shareholders who own up to $2,000 worth of stock are allowed to propose changes to how companies operate, from corporate governance issues to gender equity, to corporate boards.
Under the new rules, shareholders who wish to submit a resolution must hold at least $25,000 worth of shares or else hold $2,000 stock continuously for at least three years.
In comments submitted to the SEC on Monday, members of the employee-led group Amazon Employees for Climate Justice argued this would discriminate against smaller investors, including employees at tech companies awarded stock as part of their compensation who wish to have a say in how a company is run and kept accountable.
The group of workers have been pushing Amazon to create a plan to completely transition to renewable energy, stop donating to legislators that deny climate change and to cease working with oil and gas companies.
“We believe that the proposed rule changes will greatly hinder our ability to bring forth future successful resolutions that serve to benefit and inform the public market,” said the Amazon workers in the submitted comments.
Amazon declined to comment for this article.
The proposed changes at the SEC come as shareholder activism is on the rise. In 2017 and 2018, shareholder resolutions proposed to address social and environmental concerns surpassed resolutions relating to corporate governance issues.
In 2018, a group of more than a dozen Amazon employees used the stock that they receive as a form of compensation to present their fellow Amazon shareholders with a proposal for the company to commit to reducing fossil fuel emissions. It was the first time workers in the technology industry had used their position as shareholders to urge their employer to change its business practices.
The resolution received 31 percent of votes from shareholders. It wasn’t enough to pass, but it was enough to garner the attention of the media and even more Amazon workers. The following year, more than 8,300 Amazon workers signed their names to a letter urging CEO Jeff Bezos to reduce the company’s carbon footprint.
While the workers were still collecting signatures, Bezos announced plans to reduce 50 percent of Amazon’s shipping operations to have no carbon footprint by 2030. This didn’t satisfy employees, who also wanted Bezos to drop contracts with oil and gas companies, among other measures.
The comments Amazon workers are sending to the SEC come one week after more than 350 Amazon employees collectively violated the company’s communications policy in support of colleagues who were told they could be fired for speaking out about Amazon’s environmental practices.
That workers are now organizing to maintain their rights as shareholders to propose resolutions signals that workers are preparing to maintain pressure on the company to be more active on addressing climate change.
Shareholder resolutions are not binding. Even if a majority of shareholders vote to make the proposed change, companies are generally not required to adopt the proposal. Still, resolutions provide important ways of signaling shareholder concern and have in the past been used to advocate for greater corporate accountability. Shareholder proposals have successfully sparked firms to take action on gender equity, like at Citigroup, and to end the sale of assault rifles at Walmart, for example.
The ability to submit proposals is “one of the only vehicles for smaller shareholders to have their voice heard,” said Virginia Harper Ho, the associate dean for international and comparative law at the University of Kansas, whose research focuses on corporate governance and finance.
“It is also a unique information channel for management to learn about the views of shareholders, besides those of the larger investors that they probably are more likely to pay attention to anyway,” she added.
Activism within rank-and-file Amazon employees is happening amid a surge of employee organizing within the technology industry. At the end of 2018, Google workers organized a walkout across more than 40 offices to protest how the company handled allegations of sexual assault and harassment.
Workers have also organized petitions in protest of Google’s plans to build a censored search engine in China, as well as its cloud contract with the Department of Defense to build artificial intelligence for drones. Workers at Microsoft and Amazon have also organized to protest their employer’s contracts with Immigration and Customs Enforcement.