Shareholders are increasingly showing signs of DEI fatigue as political heat around the issue intensifies across corporate America.
Both champions and critics of diversity, equity, and inclusion policies are again pushing companies this annual meeting season to either bolster or diminish their DEI policies via shareholder proposals. But so far, none of these proposals have garnered support from investors at Apple (APPL), Costco (COST), and John Deere (DE).
And that’s not expected to change as more votes are tabulated at more company shareholder meetings in the coming weeks and months, according to experts who follow these votes.
“I don’t expect this year that we will see many, if any, get majority support,” said Elizabeth Bieber, head counsel for shareholder engagement and activism defense at Freshfields.
“And I would expect that, when we look at the numbers, year over year, that we actually see waning support, regardless of which ideological side the proposal tends to fall on.”
As of the end of February, a total of 21 “anti-DEI” proposals and 16 “pro-DEI” proposals were set for a vote this year among publicly traded companies included in the Russell 3000, according to the voting recommendation firm ISS-Corporate.
ISS-Corporate expects the total number of DEI proposals to grow before the end of the voting season in April, although it’s too early to know for sure. Last year, Russell 3000 company investors forced votes on 34 total proposals opposed to DEI initiatives and 77 in favor of them.
This year’s early surge in anti-DEI measures could be a signal that opposition proposals are on the rise, Bieber said.
It could also lead to a rise in dueling DEI proposals going to a vote within the same company, as happened in February at John Deere (DE). Deere shareholders voted down both pro-DEI and anti-DEI measures.
“DEI, as of last year, is certainly one issue where companies were receiving [proposals] on both ends of the ideological spectrum,” Bieber said
So far, neither pro- nor anti-oriented measures have gained much majority support. In fact, Bieber said, support levels among S&P 500 companies dropped for both pro- and anti-DEI proposals over the last couple of proxy seasons.
Fordham University School of Law professor Atinuke Adediran said that in the last three years anti-DEI proposals surpassed those considered pro-DEI but “it’s coming from all sides.”
Adediran — who researches reputation, financial, and social risks related to corporate race policies — expects that “most anti-DEI proposals are likely to be turned down, as they were before.”
