Amazon Shareholders Rejected Employees' Call to Respond to Climate Change
buzzfeednews.comThis headline is misleading.
The vast majority of shareholder resolutions fail to achieve a majority (>50%) support. In fact, most shareholder resolutions are considered a 'success' anytime they garner any substantial amount of vote (>10%), and the company will usually take preemptive actions to address the issue when resolutions reach that level[0].
One thing most people don't realize is these votes are all non-binding. Companies have no legal obligation to do anything based on shareholder resolutions. Essentially they're a big survey.
Companies want to serve their shareholders -- that's the whole point. If the past is any indication, this effort will drive Amazon to substantially improve its sustainability practices.
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[0] From one of my working papers:
Proposals that do not achieve majority vote can still have impact by opening up a dialogue. Glac (2010) presents an example of a proposal asking Amoco to adopt the Valdez environmental principles which only got 8.6% approval, but Amoco began to shift environmental policies. A similar proposal the next year was withdrawn because of Amoco’s policy shift. Sometimes, the media impact of a failed vote can lead to future progress. For example, Guay et al. (2004) argue that the media impact of a resolution filed with Talisman on operations in Sudan led the company to withdraw a year later.
If you own amazon stock and want to build support for when they re-file next year, you can add your shares to support of this online petition: https://www.yourstake.org/ask/amazoncom-inc-amazon-reduce-fo...
> In an emailed statement, Amazon outlined its sustainability initiatives and said, "Amazon’s sustainability team is using a science-based approach to develop data and strategies to ensure a rigorous approach to our sustainability work." The company also said, "We have a long term commitment to powering our global infrastructure using 100% renewable energy."
In my experience, "using a science-based approach" translates to "maximizing shareholder value" with plausible deniability.
Is that supposed to be a problem?
Large data centers are strong candidates for renewable energy conversions because they need backup power regardless. If the "backup power" is supplied by renewables then that becomes the primary generation source and the power grid becomes the backup. Doing it that way is sustainable and profitable.
I would be very leery of a datacenter that didn't have their own on-site generation plants that can be guaranteed to supply power in the event of a grid failure. If a substation goes down on a cloudy day, I would hope that they have a big diesel generator or gas plant on standby regardless.
The solution to that is to have enough solar to generate the power you need even on cloudy days, then sell the excess to the power company on normal days.
I'm not sure what you mean.
It's arguably a problem when short-term profit seeking causes long-term damage.
Yes, but it doesn’t take long for people to start arguing that coal is clean and that diesel is green.
Corporations don't really care about clean and green outside of PR and legal requirements. If solar that generates real power all day without fuel is more profitable than an expensive diesel generator that sits there depreciating unused just waiting for the grid connection to crap out, they pick solar.
And if it isn't but you want them to use it anyway, that's easy too -- put a carbon tax on that coal fired grid power so that the solar is cheaper and they're back to doing what you want them to.
But don't expect them to choose to lose money while their competitors burn coal, undercut them and put them out of business because you decided that them doing that should be perfectly legal.
OK, I get it.
> But don't expect them to choose to lose money while their competitors burn coal, undercut them and put them out of business because you decided that them doing that should be perfectly legal.
The problem is that entrenched corporations more or less own governments, so they get the laws that work for them.
> The problem is that entrenched corporations more or less own governments, so they get the laws that work for them.
So what are you proposing to do about it?
Notice also that the corporations in this case are the fossil fuel companies, not the data center companies. To Amazon a marginal increase (if that) in energy costs to use solar is just something they get to mark up and pass on to the customer, as long as their competitors have to do the same thing. To oil and coal companies an effective carbon tax is ultimately the end of their business and they'll use every dirty trick in the book to try to prevent that.
So how do you get a much-needed carbon tax when it would cost oil and coal companies literally trillions of dollars and they'll fight that hard to prevent it? What's your proposal?
First thing's first: stop pretending that "we the people" made the laws. If you can't recognize the problem, you certainly can't fix it.
https://scholar.princeton.edu/sites/default/files/mgilens/fi...
I don't think mirimir was putting forth a fully-formed plan to upend global corporate takeover, and I don't think they're required to. All they were pointing out was the falseness of your implication that mirimir themselves (meaning, the people collectively) are somehow responsible for these broken laws. That blame was cast in exactly the wrong direction.
These broken laws are in fact operating as designed. As Warren Buffett observed, "there's class warfare all right, but it's my class — the rich class — that's making war, and we're winning."
> What's your proposal?
I don't have one. As you say, they'll do whatever it takes to prevent that. Maybe they'll eventually give up, once climate change has destroyed civilization, but then it'll be moot.
Bottom line, it's hopeless.
Upon reflection, maybe strong AI will emerge before human civilization collapses. Then it'll carry on after humans more or less become extinct. As Spielberg "predicts" in "A.I. Artificial Intelligence".
A call which was made by bcc spamming all the internal amazon mailing lists asking people to sign the petition.
Source: I know a guy who got spammed.
I’ve been surprised by Amazon’s commitment to and progress in this area. I only recently learned that half of AWS was powered by renewable energy in 2018. That might not be good enough for these people, but I was pleasantly surprised.
Most shareholder resolutions are total jokes that get rubber-stamped by the large fund managers/executives and large individual shareholders who actually vote their shares. Despite increased access, due to ubiquitous internet access, only 27% of retail investors even bother to vote.[0] Plus, with an increasing concentration of assets managed by a small group of giant fund companies, this continues to become a bigger problem where the retail investors have little to no say.
Check out the AFL-CIO Executive Paywatch [1], can you imagine retail investors approving executive compensation to the rate of 200x or even 5900x (in the case of Weight Watchers) median employee pay? Those executive compensation votes usually pass without much more than a squeak from a couple of small investors or activist fund managers who typically get trounced when it comes time to vote.
Even if it's seemingly pointless, I always read the proposals and vote. It's also a great way to learn and get a sense of what's going on at the companies you are invested in.
[0] http://buzz.money.cnn.com/2014/06/12/shareholders-dont-vote/
Time to change the shareholders
Majority Shareholders are practically our Modern Feudal Lords. The only difference is that there is a government which was paid in blood as result from past revolutions and uprisings. A government that is also being taken over by Modern Aristocrats.
Amazon doesn't have a majority shareholder. Most of these huge companies don't. Gates doesn't own a majority of Microsoft, Page and Brin even together don't own a majority of Google, etc. These companies are owned by everybody's retirement fund.
It's actually becoming rather a problem because you have these gigantic containers of wealth but there is no one captaining the ship who can do anything bold with it, because that requires shareholder approval but the underlying shareholders don't even know what companies they own much less have any idea what comes up for a vote. Meanwhile the fund managers are the most conservative people imaginable and are far more interested in stable returns than making the world a better place, so the entities that have the resources for moonshots don't have the stones to actually attempt them.
Your comment is incorrect. There are numerous types of stock. The biggest division being preferred and common. Common entails voting rights, preferred does not. There are also share classes. For instance Google has class A, B, C shares. Class A are what people buy and do entail minimal voting rights. Class B are voting shares owned primarily by the founders and carry 10x the voting rights per share of class A. And class C are voteless shares generally distributed to employees for compensation. Sergey Brin and Larry Page own a minority of all outstanding Google shares (about 13%) but have majority control of the voting power in the company. The same is true of companies such as Facebook and Zuckerberg.
This leads to the rather interesting insight that the current direction and actions of of Alpha/Google/YouTube etc have been ultimately under the exclusive control of Brin and Page; similarly for Zuckerberg/Facebook. These companies' actions give the most honest insight possible into their owners' worldviews. Not the most comforting thought.
Recent tech companies notoriously have voting rights concentrated among founder-executives; that is very much against the norm for the majority of public companies, where CEOs can actually be fired / replaced by the board.
Zuck/Brin/Page's argument was that their tech visionary abilities deserved special protection to take risks others don't see. You're seeing a lot of investors dispute that increasingly. And that argument has no traction at all in more mature industries where senior management is more of an actual management role, serving as employees of the board.
While you're broadly right about the legal authority, keep in mind that the founders can't do most things themselves and at a large corporation, can't even monitor most of what's going on themselves. Getting a large bureaucracy to do something complicated is not as easy as sending out an email. (The most obvious case of this is stopping leaks, which is not as easy as the CEO saying "don't leak stuff".) They can set OKR's but whether they get done or not isn't guaranteed.
Matt Levine occasionally writes about amusing corner cases where corporate governance gets metaphysical [1].
I would guess that Google and Facebook might not have turned out quite like the founders had hoped, though of course they have more power than anyone to turn things around.
[1] https://www.bloomberg.com/opinion/articles/2018-05-24/compan...
Is there a price difference? Can shares be converted between classes or between preferred and common?
I'm not much of a stock person, but I think in such cases, the voting shares tend to be tightly controlled. Especially for companies like Alphabet & Facebook, they are essentially trying to get the funding of a public company, while still maintaining the function of a private one.
Yes! We built this site to try and educate retail shareowners and encourage them to take action with their shareowner rights.
Fundamentally, we believe it's unrealistic to expect them to pay attention, so we're trying to build an experience where they sync their accounts, demonstrate what they care about, and then we pay attention for them via push notifications. Would love to hear your feedback! www.yourstake.org.
> Meanwhile the fund managers are the most conservative people imaginable and are far more interested in stable returns than making the world a better place, so the entities that have the resources for moonshots don't have the stones to actually attempt them.
You have actually given another premise to my argument. The world's resources (represented in paper money) is not being used to benefit the world, if fact, it's being used to lobby gov't to remove subsidies on renewable energy.
Feudal lords own the land just like today's capitalists (especially the whales) own capital.
Cascading corporatization (companies owned by companies owned by funds, owned by shareholders owned by other entities) breaks all sorts of things. Governance is a big one. The idea of "shareholder ownership" is fairly theoretical, in most cases.. both the concept of "shareholder" and "ownership" need a lot of qualification.
"6 people own a share of a bookshop" isn't really an analogy.