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Proxy Impact

Website:

www.proxyimpact.com/
Type:

Left-of-Center Consulting Firm
Activity:

Proxy Vote Activism
President:

Michael Passoff

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Proxy Impact is a private firm that consults with left-leaning organizations on how to conduct shareholder proxy vote campaigns. 1 These campaigns seek to use the equity nonprofits have in corporations to force them to implement left-leaning corporate policies including racial quotas in hiring, 2 gender-based quotas in hiring, 3 preventing corporations from setting different rates of pay, 4 and influencing corporate data transparency and security policies. 5

History and Background

Proxy Impact claims to be inspired by and seek inspiration from religious shareholders and public pension funds that sought to pressure corporations to divest from apartheid South Africa in the 1980s. 6 Proxy Impact actively pressures corporations to increase quota-based hiring policies based on race and gender. 7

Proxy Impact guides left-of-center shareholders on how to organize “proxy votes,” which refers to a shareholder-devised proposal put to a vote at a corporation’s annual shareholder meeting. 8

Organizing a proxy vote requires expertise and conformity with Securities and Exchange Commission regulations and corporate by-laws. Proxy Impact’s core function is to guide left-of-center organizational shareholders on how to submit compliant proxy proposals. 9

Activities

Race-Focused Proxies

Proxy Impact has submitted proxy proposals in various annual corporate meetings that would require corporations to disclose any pay and benefits gaps that exist between employees from different racial groups and to put in place policies that close differences in pay for similarly situated employees, regardless of potential business-related and justifiable reasons for differences in salary. 10

Gender Focused Proxies

Proxy Impact has submitted proxies in various annual corporate meetings that seek quota-based hiring policies for filling board of directors’ seats of corporations. 11  Proxy Impact’s gender-based quotas would require a minimum 30 percent of a corporation’s board of directors be female. 12

In 2021, Proxy Impact filed proxies for its clients, or guided clients in filing proxies related to standardizing pay schedules and preventing corporations from providing different rates of pay based on race or gender in meetings of the following corporations: Alphabet, Biogen, Cigna, Microsoft, and Pfizer. 13

Settlements

In some instances, the board of directors of corporations have settled with Proxy Impact to avoid placing its proposed proxy up to a vote. Under these arrangements, the corporation meets some but not all the demands set forth in Proxy Impact’s proposals, and in return Proxy Impact withdraws their proxy. 14

Corporations that have entered gender issue settlements with Proxy Impact include Bristol Meyers-Squibb, Citrix, Humana, and Praxair. 15

Corporations that have entered into race and employment focused settlements with Proxy Impact include Microsoft, Starbucks, Visa, and Walgreens. 16

Data Policies

Proxy Impact guides its clients on how to file proxies related to corporate data management policies. 17 Through these proxies, Proxy Impact seeks to increase corporate removal of child exploitation content, report such incidents to law enforcement, and—more controversially 18 —to refrain from putting in place enhanced user privacy protocols such as end-to-end encryption until the corporation can ensure that there is no child exploitation content on its platform. 19

In 2020, Proxy Impact was able to obtain a settlement where it agreed to withdraw a proxy it planned to submit to a Verizon annual corporate meeting in exchange for the company agreeing to conduct a child exploitation risk assessment across all its business operations. 20

Annual Report

Proxy Impact, in conjunction with As You Sow and Sustainable Investments Institute, two left-of-center organizations that are active in the proxy activism, publish an annual report titled “proxypreview” surveying proxy activism across the United States. 21

The annual report is funded by private donations and through support from labor unions, organizations involved in left-of-center proxy activism, left-leaning state pension funds, and left-of-center aligned religious organizations. 22

Beyond providing a broad survey of left-of-center activism in 2022, proxypreview also provides a survey of right-of-center proxy activity. 23 Proxy Impact’s survey criticizes efforts by right-of-center groups, including proxies seeking corporate transparency with respect to diversity training and company policies targeting white employees for special work relating training. 24 The report named the National Center for Public Policy Research and National Legal and Policy Center as the two primary right-of-center organizations that lead such proxy efforts. 25

Unions and Union Retirement Funds

In 2022, the following unions provided funding or other support to publish proxypreview:  American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), American Federation of Federal, State, County and Municipal Employees (AFSCME), Service Employees International Union Master Trust, International Brotherhood of Teamsters, United Auto Workers’ Retiree Medical Benefits Trust,  United Steelworkers, and the SOC Investment Group. 26

Activist Investment Organizations

In 2022 a number of organizations activist investment organizations and organizations that guide left-of-center investors on how to align their investments with their political viewpoints provided funding or other support to proxypreview. 27 These include Arjuna Capital, Azzad Asset Management, As You Sow, BNP Paribas Asset Management, Boston Common Asset Management, Boston Trust Walden, Calvert Investment Management, Christian Brothers Investment Services, Clean Yield Asset Management, Domini Impact Investments, First Affirmative Financial Network, Follow This, Legal & General Investment Management America, Green Century Capital Management, NorthStar Asset Management, Harrington Investments, Hermes Investment Management, Newground Social Investment, Nia Impact Capital, ClearBridge Investments, Parnassus Investments, Rhia Ventures, The Shareholder Commons,  Trillium Asset Management, Wespath Investment Management, Whistle Stop Capital, Prentiss Smith & Co.,  SumofUs, Sustainvest Asset Management, Tara Health Foundation, Tulipshare, and Zevin Asset Management. 28

Religious Organizations

In 2022, the following religious organizations provided funding or other support to publish proxypreview: American Baptist Church USA, Benedictine Sister of Mt. St. Scholastica, Bon Secours Mercy Health, CommonSpirit Health, Maryknoll Sisters, Mercy Investment Services, Midwest Capuchins, Missionary Oblates of Mary Immaculate, Presbyterian Church (USA), School Sisters of Notre Dame,  Sisters of St. Francis Charitable Trust, Sisters of St. Francis of Philadelphia, Sisters of St. Joseph of Brentwood, Sisters of the Presentation of the Blessed Virgin Mary, Unitarian Universalists, United Church Funds, and Trinity Health. 29

State Pension Funds

In 2022, the following state pension funds provided funding or other support to publish proxypreview:   California State Teachers Retirement System, Connecticut Retirement Plans and Trust Funds, Minnesota State Board of Investment, New Jersey Division of Investments, New York State Common Retirement Fund, Philadelphia Public Employees Retirement System, and the Employees’ Retirement System of Rhode Island. 30

Leadership

Michael Passoff is the founder and CEO of Proxy Impact. Prior to forming the organization, Passoff worked for more than a decade as senior program director for the As You Sow Foundation’s Corporate Responsibility Program. 31

References

  1. “Comments on File No. S7-23-19 from Michael Passoff.” Securities and Exchange Commission. February 3, 2020. Accessed August 24, 2022. https://www.sec.gov/comments/s7-22-19/s72219-207943.htm
  2. “Women’s Inclusion Project.” Proxy Impact. https://www.proxyimpact.com/womens-inclusion-project
  3. “Diversity.” Proxy Impact. https://www.proxyimpact.com/diversity
  4. “Diversity.” Proxy Impact. https://www.proxyimpact.com/diversity
  5. “Child Sexual Exploitation.” Proxy Impact. https://www.proxyimpact.com/child-sexual-exploitation
  6.  “Introduction to Shareholder Advocacy.” Proxy Impact. https://www.proxyimpact.com/shareholder-engagement
  7. “Diversity.” Proxy Impact. https://www.proxyimpact.com/diversity
  8. “Proxy Voting.” Proxy Impact. https://www.proxyimpact.com/proxy-voting
  9. “Proxy Voting.” Proxy Impact. https://www.proxyimpact.com/proxy-voting
  10. “Diversity.” Proxy Impact. https://www.proxyimpact.com/diversity
  11. “Diversity.” Proxy Impact. https://www.proxyimpact.com/diversity
  12. “Diversity.” Proxy Impact. https://www.proxyimpact.com/diversity
  13. “Women’s Inclusion Project.” Proxy Impact. https://www.proxyimpact.com/womens-inclusion-project
  14. “Diversity.” Proxy Impact. https://www.proxyimpact.com/diversity
  15. “Diversity.” Proxy Impact. https://www.proxyimpact.com/diversity
  16. “Women’s Inclusion Project.” Proxy Impact. https://www.proxyimpact.com/womens-inclusion-project
  17. “Child Sexual Exploitation.” Proxy Impact. https://www.proxyimpact.com/child-sexual-exploitation
  18. Milmo, Dan. “Campaign aims to stop Facebook encryption plans over child abuse fears” The Guardian. January 17, 2022. August 25, 2022. https://www.theguardian.com/technology/2022/jan/18/campaign-aims-to-stop-facebook-encryption-plans-over-child-abuse-fears
  19. “Child Sexual Exploitation.” Proxy Impact. https://www.proxyimpact.com/child-sexual-exploitation
  20. “Child Sexual Exploitation.” Proxy Impact. https://www.proxyimpact.com/child-sexual-exploitation
  21.  “proxypreview-2022.” Proxy Impact. https://www.proxyimpact.com/publication/proxy-preview-2022
  22.  “proxypreview-2022.” Proxy Impact. https://www.proxyimpact.com/publication/proxy-preview-2022
  23. “proxypreview-2022.” Proxy Impact. https://www.proxyimpact.com/publication/proxy-preview-2022
  24. “proxypreview-2022.” Proxy Impact. https://www.proxyimpact.com/publication/proxy-preview-2022
  25. “proxypreview-2022.” Proxy Impact. https://www.proxyimpact.com/publication/proxy-preview-2022
  26. “proxypreview-2022.” Proxy Impact. https://www.proxyimpact.com/publication/proxy-preview-2022
  27. “proxypreview-2022.” Proxy Impact. https://www.proxyimpact.com/publication/proxy-preview-2022
  28.  “proxypreview-2022.” Proxy Impact. https://www.proxyimpact.com/publication/proxy-preview-2022
  29. “proxypreview-2022.” Proxy Impact. https://www.proxyimpact.com/publication/proxy-preview-2022
  30. “proxypreview-2022.” Proxy Impact. https://www.proxyimpact.com/publication/proxy-preview-2022
  31. “Leadership – Michael Passoff.” Proxy Impact. https://www.proxyimpact.com/about
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