Resolution expresses concern about ‘systemic risks stemming from growing income inequality’
Amazon.com has asked the SEC for the green light to omit a shareholder proposal asking the company to produce a ‘living wage report’, arguing that it deals with ordinary business operations and seeks to micromanage the online retailer.
The resolution, filed by Zevin Asset Management, requests Amazon’s board oversee the preparation of a ‘living wage report to provide investors with information needed to assess the extent to which the company is complying with international human rights standards and assessing systemic risks stemming from growing income inequality.’
The proposal asks that this report be updated and published annually and include:
- ‘[The] [n]umber of Amazon workers paid less than a living wage, broken down by full-time employees, part-time employees and contingent workers
- ‘By how much aggregate compensation paid to workers in each category falls short of the aggregate amount they would be paid if they received a living wage
- ‘The living wage benchmark/methodology used for these disclosures. Amazon is not required to use a particular living wage calculator or methodology.’
In its supporting statement, Zevin Asset Management writes that income inequality threatens investors’ diversified portfolios by ‘slowing economic growth, limiting upward mobility and exacerbating political polarization.’ It cites a definition of a living wage as a level of compensation that is ‘sufficient to afford a decent standard of living for the worker and her or his family’ in their location, including ‘food, water, housing, education, healthcare, transportation, clothing and other essential needs.’
The proponent states: ‘Beyond its supplier policy, investors lack data on Amazon’s contracted worker wage practices, posing blind spots to decision-useful information. Amazon does not disclose the gaps between prevailing and living wages across its workforce. Shareholders are therefore unable to assess the company’s contribution to systemic risks created by income inequality… Data shows that across counties where Amazon operates the cost of living exceeds the income required to cover basic needs.
‘As one of the country’s largest employers, Amazon would benefit from a living wage-gap exercise to strengthen long-term human capital management.’
No-action request
In its request for no-action relief, Amazon argues that it can exclude the proposal under Rule 14a-8(i)(7). ‘The proposal addresses the compensation of the company’s general workforce, prescribing an unusual and complex standard for reporting, and therefore relates to ordinary business and seeks to micromanage the topic, while failing to focus on a significant social policy issue,’ the company writes.
‘[Amazon] is committed to offering competitive pay, and its high wages have had a positive impact on other wages in local labor markets where the company operates and have helped boost local economies across the country. The company’s lowest starting pay range for customer fulfillment and transportation employees in the US is more than double the federal minimum wage and matches the highest state-set minimum wage.
‘In 2023, the company increased average hourly pay for customer fulfillment and transportation employees from $19 per hour to more than $20.50 per hour, reflecting a more than 50 percent increase over the last five years, with some locations offering as much as $28 per hour. In addition to competitive pay, the company provides numerous benefits to its employees.’
Amazon filed its 2023 proxy statement on April 13 and held its AGM on May24, 2023. A request for comment from the company was not returned immediately.
A number of ESG-related shareholder proposals filed at Amazon’s 2023 AGM, including some addressing issues affecting employees, gained levels of support generally regarded as significant, though none secured a majority. For example, a proposal on working conditions at Amazon’s warehouses received 35.4 percent of the votes cast, though that figure was down from 44 percent at the previous year’s AGM.
Another resolution sought more disclosure around general and racial pay and received 29.2 percent of the votes cast at the meeting. The proposal, filed by Arjuna Capital, asked that Amazon report on median pay gaps across race and gender, ‘including associated policy, reputational, competitive and operational risks and risks related to recruiting and retaining diverse talent.’
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