Shareholder Revolution - Power to the Shareholders

Kenza Bryan of Financial Time’s Moral Money covers a story on retail shareholder activism, specifically the London-based ethical activist investor platform Tulipshare. The platform works by channelling activist retail investors towards hot-button issues it is working on. It draws up campaigns for better governance, environment and social action, and buys enough shares to submit a proposal. Customers are then encouraged to buy the stock and vote through its platform, and can suggest issues for Tulipshare to bring forward at annual meetings.

Tulipshare won big in a battle with Johnson & Johnson last year when it pressured the company to stop selling allegedly toxic talcum powder that customers said was linked to cancer cases, and, last month convinced Apple to disclose its relationships with foreign entities more transparently. In 2023 it wants to use its own shares and those held by its customers to convince Coca-Cola to cut its plastic usage, JPMorgan to stop investing in fossil fuels and Tesla to link Elon Musk’s pay to ESG issues.

In parallel with these campaigning organisations, institutional investors like BlackRock have brought in “voting choice” measures that make it easier for end investors to vote on routine issues. This is leading to a slow but globalised “trickle down of voting power to the end investor”, Ali Saribas, a corporate governance specialist at shareholder consultancy SquareWell.

But the culmination this week of activist investor Nelson Peltz’s fight against Disney following the company’s decision to cut 7,000 jobs was a reminder that most activism by shareholders who wield the majority of power is still aimed at “value first”, not “values”, Saribas added. “These campaigns are generally ignorant to the prevailing opinion of shareholders as they try to win the court of public opinion, not a shareholder vote,” Saribas concluded.

The full article can be accessed here (subscription required).