A year after forcing an independent review of Microsoft’s sexual harassment policies, a majority of investors followed the board’s recommendations to reject all six shareholder proposals at the company’s annual meeting this week, according to results released Friday morning.
Tax transparency: The shareholder proposal that received the most votes, about 23%, called on the company board to disclose details about its finances and tax payments in international markets, to ensure that the company is engaged in “responsible tax practices.”
AkademikerPension, one of Denmark’s largest pension funds, submitted the proposal.
“Microsoft’s approach to taxation has been repeatedly challenged by tax authorities globally,” the proposal asserted, citing reports by Pro Publica and the Guardian.
The board opposed the measure, calling it unnecessary due to what it considers “abundant disclosure” of Microsoft’s foreign tax practices.
Climate change and retirement funds: About 11% of shareholders supported a proposal led by As You Sow, seeking a report examining Microsoft’s 401(k) retirement funds to determine the extent to which they invest in companies “contributing significantly to climate change.”
The proposal cited Microsoft’s use of BlackRock LifePath funds as the default option for participants, saying that the funds make “significant investments in fossil fuel companies and companies that cause deforestation risk.”
It added, “While Microsoft allows employees to use a ‘self-directed’ investment option to choose other funds, only 6 percent of employee retirement funds are invested outside the Plan.”
The proposal acknowledged Microsoft’s own efforts to reverse its impact on the climate with the goal of becoming carbon negative by 2030.
Microsoft’s board said the proposal “over-simplifies or disregards the strict fiduciary framework to which the plan is subject under applicable law, and minimizes the efforts made to offer plan participants a broad range of investment options, including those that account for Environmental, Social, and Governance (“ESG”) factors, within that framework.”
Military technology: Proposals seeking to scrutinize Microsoft’s sale of technology to U.S. military agencies received 20% and 11% of the shareholder vote, respectively.
The proposals sought independent reviews to determine if the practices “contribute to violations of privacy, civil and human rights,” or create risks to Microsoft’s reputation or finances.
The first proposal was led by Boston Common Asset Management and Impact Investors, and the second was led by Harrington Investments, Inc.
Microsoft’s board opposed both resolutions, saying the company’s leaders have “made a principled decision that we’re not going to withhold technology from institutions that we have elected in democracies to protect the freedoms we enjoy.”
The company is one of four cloud providers picked to split a $9 billion contract to upgrade the U.S. military’s cloud capabilities. Microsoft was exclusively awarded a prior incarnation of the contract, known as JEDI, but that agreement was withdrawn amid a legal challenge from Amazon.
Shareholders also turned down proposals seeking to analyze Microsoft’s hiring practices to ensure fair treatment of applicants with arrest or incarceration records (11% approval); and to conduct a cost-benefit analysis of the company’s diversity and inclusion programs (1% approval).
See Microsoft’s proxy statement for more on each proposal.
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