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A year after Microsoft forced an independent review of its sexual-harassment policies, a majority of investors rejected all six proposals at the company’s annual meeting this week following the board’s recommendations, results showed Friday morning.
Tax transparency: The overwhelmingly 23% shareholder proposal calls for the company’s board to disclose details of its finances and tax payments in international markets and to ensure the company engages in “responsible tax practices.”
AkademikerPension, one of Denmark’s largest pension funds, proposed the idea.
“Microsoft’s approach to taxation has been repeatedly challenged by tax authorities worldwide,” ProPublica and The Guardian reported.
The board criticized the move as unnecessary because of what it said was “excessive disclosure” of Microsoft’s foreign tax practices.
Climate Change and Pension Funds; About 11% of shareholders supported the Sow Like You proposal, seeking a report that examines Microsoft’s 401(k) pension funds to determine how much they invest in companies that are “significant contributors to climate change.”
The proposal cited Microsoft’s BlackRock Life Path Fund as a default option for participants.
He added, “While Microsoft allows employees to use a ‘self-directed’ investment option to choose other funds, only 6 percent of the employee pension fund is invested outside of the plan.”
The proposal acknowledges Microsoft’s efforts to reverse its impact on the climate by aiming to become carbon negative by 2030.
Microsoft’s board said the proposal “oversimplifies or ignores the strict fiduciary framework under which the plan is governed by applicable law and undermines efforts to provide plan participants with a broad range of investment options, including environmental, social and societal concerns.” and governance (“ESG”) factors, within that framework.
military technology; Proposals to investigate Microsoft’s technology sales to US military agencies received 20% and 11% of shareholder votes, respectively.
They requested independent reviews to determine whether the proposals “contribute to privacy, civil and human rights violations” or pose risks to Microsoft’s reputation or finances.
The first proposal was led by Boston Mutual Asset Management and Impact Investors, and the second by Harrington Investments, Inc.
Microsoft’s board opposed both proposals, saying company leaders “made a principled decision not to withhold technology from the institutions we elect in a democracy to protect the freedoms we enjoy.”
The company is one of four cloud providers selected to split a $9 billion contract to upgrade the U.S. military’s cloud capabilities. Microsoft was awarded a contract known as JEDI just prior to signing, but that agreement was overturned amid a legal challenge from Amazon.
The shareholders also rejected the proposals seeking to analyze Microsoft’s hiring practices to ensure fair treatment of applicants who are incarcerated or incarcerated (11% agree); and to conduct a cost-benefit analysis of the company’s diversity and inclusion programs (1% approval).
For more information on each proposal, see Microsoft’s proxy statement.
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