As prime season for annual shareholder meetings draws to a close, the results of recent shareholder proposal votes suggest that investors are increasingly willing to challenge management on workplace, racial equity, and climate causes. The shift breathes life into a progressive-minded movement that dovetails with the current environmental, social, and governance campaign spreading across industries of all types—and increasingly drawing the ire of Republican critics.

This year alone, these activist investors won rare victories for several proposals designed to prod large tech companies into action:

• Twitter shareholders on Wednesday supported proposals aimed at forcing the company to produce information about its election-related spending and use of “concealment clauses,” such as nondisclosure and non-disparagement agreements. Nearly two-thirds of voting IBM shareholders approved a similar proposal on concealment clauses at the company’s annual meeting in late April.

• Uber, Apple, and Amazon all agreed in the past two months to conduct civil rights audits of their companies. Uber made the move as part of a compromise with activist shareholders ahead of voting on a proposal seeking an audit. Apple initially opposed an assessment but later changed course after shareholders supported a nonbinding resolution seeking an audit in March. Amazon ordered its audit after 44% of voters sought one last year.

• Microsoft committed in January to reviewing the company’s sexual harassment and gender discrimination policies, and to publishing information about past investigations into executive misconduct. Nearly 80% of voting shareholders backed action on workplace sexual harassment policies at the company’s annual meeting last November.

• In March, shareholders of Disney—increasingly pushing into tech via digital streaming—approved a nonbinding proposal calling for more transparency on employee compensation, including data that might show disparities across gender and race. Disney officials told Deadline that they will work toward “addressing interest in greater transparency” around pay equity.

Before we get too far, let’s be clear: Top tech executives remain firmly in command of their companies, easily beating back the vast majority of proposals in recent months.

Amazon shareholders rejected all 15 shareholder proposals this week, which the company urged voters to do. Meta voters shot down all 13 proposals this week, as well, primarily because CEO Mark Zuckerberg controls a majority of company shares. Apple and Microsoft combined to win seven of 10 votes on social policy proposals during their most recent meetings. (Alphabet has 17 proposals on the docket at next week’s annual meeting, though none are expected to pass given that three former company executives own more than half of all voting shares.)

Despite their low batting average, activist investors have plenty to celebrate this season.

To start, they’re getting more proposals onto the shareholder ballot. 

According to data from the Manhattan Institute’s Proxy Monitor, eight of the nation’s largest tech companies under the most shareholder pressure—Alphabet, Amazon, Apple, Disney, Intel, IBM, Meta, and Microsoft—combined to face an annual average of 47 proposals between 2018 and 2021. This year, investors have already brought forward 66 proposals, with Microsoft still several months away from holding its annual meeting.

The mere fact that activist investors won any votes this year also marks progress for them. 

During that same stretch from 2018 to 2021, those eight companies defeated 69 out of 71 proposals addressing social policy, per Proxy Monitor data. (About one-quarter of those 71 votes reached 30% support, a threshold that generally gets the attention of corporate boards.)

The ascendent left-leaning movement will face a fierce fight in the coming years, as conservatives increasingly deride their efforts as corporate wokeness run amok. Example A: Former vice president and potential 2024 White House candidate Mike Pence calling this week for legislation to stop “the ESG craze.”

For the moment, though, the modern activist shareholder has never been more powerful.

Want to send thoughts or suggestions for Data Sheet? Drop me a line here.

Jacob Carpenter

NEWSWORTHY

A quieter Office? Microsoft confirmed Thursday that it will slow its rate of hiring across three of its software divisions, the latest staffing pullback in a tech industry looking to lower costs amid economic uncertainty, Bloomberg reported. Company officials said they will reduce hiring in their Windows, Office, and Teams divisions, though the retreat will not be implemented companywide. The move follows an announcement earlier this month that Microsoft will increase its budget for raises and offer more stock grants as part of an employee retention push.

Elon gets served again. Twitter shareholders filed a proposed class-action lawsuit this week alleging that Elon Musk acted illegally while trying to drive down the price of his pending acquisition of the company, the Associated Press reported Thursday. The plaintiffs claim that Musk violated securities laws in recent weeks, during which the Tesla CEO said his $44 billion purchase was “on hold” due to questions about the prevalence of spam bots on the platform. The shareholders argue Musk used the bots issue as a pretext for backing out of the deal or renegotiating the sale price.

PC business keeps humming. Dell shares jumped 12% in midday trading Friday after the computer company topped Wall Street predictions for quarterly profit and revenue, Reuters reported. Strong commercial demand for personal computers amid the shift to hybrid work settings helped propel Dell’s quarterly profit to $1.84 per share, well above analyst estimates of $1.39 per share. Dell executives warned, however, that supply-chain issues would weigh on the company’s bottom line in the current quarter.

Getting cold feet. Senate Democrats in contentious midterm elections could derail bipartisan legislation aimed at reducing the power of the nation’s largest tech companies, Politico reported Thursday, citing 10 sources familiar with ongoing negotiations. The bill, which would stop Amazon, Google, and other companies from pushing their products over competitors’ on digital platforms, boasts strong support from the Senate’s Democratic leadership and legislative sponsors on both sides of the aisle. However, several senators have grown increasingly wary of a vote on the proposal, fearful that legislation opposed by top tech companies could become a distraction on the campaign trail.

FOOD FOR THOUGHT

Cooped up only so long. Some of China’s “closed loops” are in danger of breaking open. Bloomberg reported Thursday that employees at one of Apple’s top suppliers in the country, Quanta Computer, are actively revolting against government and corporate lockdowns designed to keep factories active amid the country’s zero-COVID push. The mounting frustration follows several weeks of isolation at large plants serving the tech industry, where employees must work and live to comply with the autocratic nation’s COVID protocols. While the full scale of any rebellion in China isn’t known, the Quanta Computer backlash in Shanghai suggests that many workers have hit a boiling point.

From the article:

Hundreds of workers have clashed with guards. A large contingent, worried that their supplies would run out should the lockdown persist, flooded past guarded isolation barriers earlier this month in search of daily necessities, according to several employees. 

Over the past weekend, media reports went viral of a large group storming a dormitory housing Quanta’s Taiwanese managers after a dispute over the prolonged lockdown and pay—triggering an hours-long standoff confirmed by several workers within the compound.

The incidents underscore how sentiment is souring on a lockdown that’s upended the lives of 25 million Shanghainese since March.

IN CASE YOU MISSED IT

The good times in Silicon Valley come crashing to a halt, by Jessica Mathews

Ethereum sinks as its Beacon chain suffers a ‘reorg’ issue, other altcoins see red, and Bitcoin struggles to hold $30,000, by Taylor Locke

Mark Cuban says he’ll pass on Do Kwon’s resurrected Terra 2.0. ‘No’, by Taylor Locke

Twitter defies shareholders by keeping Elon Musk ally on the board, by Chloe Taylor

What is StepN? The new craze that lets you earn crypto for running and walking is now blocking China users, by Christiaan Hetzner

How AI brought Val Kilmer’s ‘Iceman’ back into Top Gun: Maverick, Chloe Taylor

Elon Musk spars with AOC as he polls his Twitter followers whether they trust billionaires or politicians more, by Victoria Batchelor and Bloomberg

BEFORE YOU GO

An expensive cable guy. Altice USA has suffered through a rough three years, losing thousands of broadband customers as the cable company’s stock price dropped an annual average of 27%. But you’d never know it based on CEO Dexter Goei’s compensation, which totaled about $48 million during that stretch. The disconnect made Goei into the most overpaid CEO on this year’s Fortune 500 list, according to our analysis of executive compensation and company performance. Goei beat out Warner Bros. Discovery head honcho David Zaslav, whose pay package was valued at $188 million over the past three years, and Biogen’s soon-to-be-replaced leader Michel Vounatsos. On the flip side, Moderna CEO Stéphane Bancel earned the title of “most underpaid” following the blockbuster success of his pharmaceutical company’s COVID-19 vaccine. Though don’t feel too sorry for Bancel. He’s got a net worth of more than $4 billion, per Bloomberg.

Data Sheet will be off Monday for the Memorial Day holiday. We will return Tuesday.