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Why, a shareholder asked at the annual Goldman Sachs meeting last month, did the bank support Marxists against the capitalist policies that had made it such a great power? Had his advice been taken over by “the awakened far-left mafia”?
David Solomon, chief executive of Goldman, responded equitably to the demand to explain why had joined hundreds of his colleagues in opposing legislation making it difficult for eligible voters to vote and the meeting continued.
But the exchange meant a shift in policy around corporate America, as general executives used to be insulted by the left, as taxpayers dodging taxes on inequality and environmental degradation were they saw attacked from the right as “awakening the capitalists.”
A conservative backlash against companies’ responses to the 2020 elections, voting battles, racial equity protests and other issues that divide Americans are increasingly visible at shareholder meetings and in Congress and the media.
A right-wing group called Consumers Research announced this week a multi-million dollar advertising campaign aimed at companies that, he said, “put the policy in suspense above the interests of consumers.”
Two of its targets, American Airlines and Coca Cola, had criticized Republican voting legislation in Texas and Georgia, while a third, Nike, had attracted conservative anger to support athletes protesting police violence.
“What we’re seeing is that every time companies try to distract themselves from their failures by welcoming politicians to wake up,” said Will Hild, the group’s chief executive, “You’ve seen them taking positions on legislation that has nothing to do with their business model “.
Other leaders led by conservative pressure groups are Larry Fink of BlackRock, Brian Moynihan of Bank of America and Marc Benioff of Salesforce.
The three men, who together earned more than $ 77 million last year, were described as “far-left CEOs” by the Free Enterprise Project, a shareholder activist group, which released a report this month. who advised conservative investors how to vote against the “corporate awakening.” ”.
The right had already lost schools, Hollywood and the mainstream media, but now it saw businesses “moving to the left,” said Justin Danhof, the project’s director.
Chief executives were responding to an encouraged subset of “awake employees” and their “incredibly left-center center” human resources teams, he argued, while “if you’re a traditional-minded American, shut up in the workplace.”
The Free Enterprise Project has gained few institutional shareholders, he admitted, but some conservative funds have reported increased demand, even when large fund managers accept more progressives. environmental, social and governance-thematic investment.
A group called 2ndVote Advisers he said the Wall Street Journal this week that its two stock exchanges exchanged funds for “non-awake investors” who had grown from $ 6 million to $ 25 million in one month. The US Conservative Values ETF said it tripled its assets under management this year.
Republican politicians who have long shared a fondness for low corporate taxes and deregulation with American business leaders are also turning to them.
As the Texas legislature threatened to block banks restricting government contracts to shipowners, Texas Sen. Ted Cruz complained last month: “For too long, awakened CEOs have been friends of the good times with the Republican party.”
“It’s time we planted them,” echoed Josh Hawley, the Missouri senator who, like Cruz, was shunned by business donors after feeding him. discredited claims of a stolen presidential election in 2020. “There is a massive reaction,” warned Florida Senator Rick Scott.
Even the U.S. Chamber of Commerce, traditionally aligned with Republicans in labor and trade matters, has been labeled a “front-line service for awakened businesses” by Arkansas Sen. Tom Cotton. aval Democrat record last year.
Surveys show conservative support for the fall of companies. Consultation in the morning found that the proportion of Republicans who say they trust U.S. companies had dropped from 53 percent last October to 39 percent last week, while Democrats are more likely to trust businesses.
This reaction poses challenges for executives who feel pushed by employees to study sensitive issues, but know that the cracks in the country run through their staff.
“On many issues such as gun control and abortion rights, businesses have historically been good at staying out of these, but the line has shifted due to pressure from employees because the company be an activist, “said Richard Edelman, chief executive of the company ‘s communications company.
An Edelman poll this week found that companies have increasing confidence in politicians and that 59% of Americans believe executives should criticize laws they consider discriminatory.
But companies had to avoid political “landmines,” said Edelman, who advised leaders to adhere to issues such as recycling where they have a clear mandate.
Chris Kempczinski, chief executive of McDonald’s, echoed that view at Thursday’s annual meeting. The burger group did not take sides, he said, but would speak “where our voice can be useful and where it corresponds to our business interest or the values we stand for.”
Despite growth investor consensus that it is in the interest of companies to promote their values, however, executives do not seem sure how far they should take their activism.
When Fortune magazine asked Fortune 500 bosses this month if they felt the responsibility to talk about social issues or thought they had become too involved in politics, their answers split at 50:50.
Only 30% said they were Republican, compared to 47% who said they were independent and 12% Democrat.
“I think corporate America broke with the Republican party a long time ago and the Republican party has realized that,” Danhof said.
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