Amazon, Facebook, other top companies face pressure from this conservative activist

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Justin Danhof showed up at Amazon’s annual shareholder meeting in June with a mission: to push the e-commerce giant to consider political ideology when evaluating potential new board members.

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When it came time to present his proposal, other attendees began to hurl comments like “Klansman” at him. One individual chased Danhof down afterward, telling him to get out because he “must be late for my next book burning.”

“We’re sparking a nerve,” he told FOX Business after recounting the episode.

An Amazon spokesperson declined to comment. The Seattle-based company does not provide recordings of the event.

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Danhof and his group, the National Center for Public Policy Research, have helped turn the traditionally drama-free annual meetings into headline-grabbing affairs. Underscoring his efforts is a broader push among advocates to use the arcane proxy process for political reasons.

For just $2,000 worth of a company’s stock, investors can file a shareholder proposal that urges management to take a certain action. While the measures are nonbinding, most are adopted if they obtain majority support.

Increasingly, both progressive and conservative activists use the process to push corporations to adopt more aggressive stances on climate change, gun control and other hot-button political issues.

“Politics is downstream from culture. You don’t need to change a law to change the culture,” Danhof said. “I try to change policy, not politics.”

Danhof traversed the country this year to attend meetings for top firms like Apple, Disney, Starbucks, Pfizer, AT&T, Netflix and Facebook, hawking, among other things, his ideological board diversity proposal.

TickerSecurityLastChange%Chg
APPLn.a.n.a.n.a.n.a.
DISWALT DISNEY COMPANY142.51-1.79-1.24%
SBUXSTARBUCKS CORPORATION89.86-0.21-0.24%
PFEPFIZER INC.42.97+0.12+0.28%
FBFACEBOOK INC.202.28-1.56-0.77%
NFLXNETFLIX INC.363.53-2.46-0.67%
TAT&T INC.33.42-0.16-0.48%

The push is in direct response to liberally-aligned groups, who have had success in advocating for measures to require firms to interview women and unrepresented minority candidates for open board seats, ones that Amazon, Facebook and others adopted.

While Danhof says he supports the ultimate goal of eliminating “group think,” he sees the lack of differences in ideology among firm leadership as particularly troubling given how active corporate America is becoming in the national political discourse.

“They are refusing any even concept of adding a conservative to their board, adding someone that thinks differently from them from a political perspective,” he said.

Critics of Danhof’s approach say he is taking the advocacy effort to a new, more extreme level. And as the number of politically-charged shareholder proposals grows every year, some experts are warning that the trend will ultimately have a negative impact on the firms.

“Companies are economic vehicles and because they are made up of such a diverse collection of political interests in their employee ranks and ownership ranks, its best just to avoid it,” said Charles Elson, a professor of corporate governance at the University of Delaware. “Politics, whether right or left, have no business in corporate life. That’s why we have legislatures.”

To determine what kind of proposals to push and which businesses to target, Danhof spends ample time on the Securities and Exchange Commission's website monitoring the submissions that draw legal challenges and tracking what measures competing groups are advocating for.

He also uses the agency’s guidelines to his advantage.

Under SEC rules, similar proposals are not allowed on one firm’s proxy statement. By submitting his own measures first, Danhof can effectively block competing proposals from consideration.

Progressive advocates, for example, have long-pushed recommendations to try to force companies to disclose their political donations to trade groups and other entities, a tactic that Danhof says is intended to shame those who fund Republican-leaning organizations, like the U.S. Chamber of Commerce. 

To beat the competition, Danhof instead called on the companies to tout their support for "pro-business" groups and educate investors on why those donations are important.

“I get most of my inspiration from the left,” Danhof said. “It’s a deliberative process that involves taking what the left did the prior year, doing a little bit of predictive modeling.”

With his increased activism, Danhof and his group are becoming more well-known among corporate America. At most meetings, even those for which he does not have a proposal under consideration, Danhof says he has a handler that shadows him the whole day.

TickerSecurityLastChange%Chg
WMTWALMART INC.114.49-0.27-0.23%
PEPPEPSICO INC.133.46-0.34-0.25%
GPSGAP18.64-0.59-3.07%
CVSCVS HEALTH CORPORATION56.39-0.99-1.73%

As shareholder activism becomes more commonplace, companies are increasingly trying to get ahead of any potentially news-making demonstrations. Walmart, Pepsi Co., Gap and CVS Health, for example, independently adopted Danhof’s ideological diversity proposal without a shareholder vote on it.

And while, by and large, the companies advocate for shareholders to vote against Danhof’s proposals, he says the effort still earns the respect of top executives. After the recent Salesforce shareholder meeting, the company’s general counsel and a board member approached Danhof and called his effort “really, really heartening.”

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“Political discourse is just so vile and we obviously disagree with you politically, but you were very agreeable in your presentation and very earnest and we appreciate that,” they told him, according to Danhof.

A Salesforce spokesperson did not respond to request for comment.