Dive Brief:

• American Express shareholders will be asked to vote on an abortion-related shareholder proposal in May after the company's effort to ditch the recommendation failed.
• The proposal, put forward by Change Finance, asked the company’s board to issue a report outlining the risks and costs of complying with law enforcement requests for data regarding the company’s customers and “state laws criminalizing abortion access.” The New York-based company’s board has urged shareholders to vote against the proposal, according to Amex’s Friday proxy filing with the Securities and Exchange Commission.
• Amex sought to prevent the proposal from facing a shareholder vote by petitioning the SEC to scrap it, calling it an attempt to micromanage the company. The SEC, however, said earlier this month that investors must have a chance to vote on it. That will occur at Amex’s annual meeting May 2.

Dive Insight:

Change Finance, an asset manager with a focus on corporate environmental, social and governance issues, noted in the proposal that companies such as Amex collect sensitive consumer data that law enforcement in states criminalizing abortion may seek to obtain from the company.

The shareholder’s full proposal stated: “Shareholders request that our Board issue a public report detailing any known and potential risks and costs to the Company of fulfilling information requests regarding American Express customers for the enforcement of state laws criminalizing abortion access and setting forth any strategies beyond legal compliance that the Company may deploy to minimize or mitigate these risks.” It called for the report to be published by Sept. 1, 2024.

Those data requests “may create significant reputational, financial, and legal risks,” and “there is a strong market benefit to upholding and increasing longstanding consumer privacy expectations,” the proposal said. It cited “geolocation data, browsing history and financial activity” as sensitive consumer information.

In the proxy, Amex said its board opposes the measure because its website and SEC filings offer information on the company’s data management practices, and Amex must comply with requests for information from law enforcement and regulators.

In recommending shareholders nix the proposal, Amex’s board also said limitations on available data through global payment processing networks mean the card company doesn’t have access to transaction details that the shareholder suggested the company can access. 

“In the context of health care, the Company's spending data does not include information about specific medical products, services or procedures provided at healthcare facilities, and the Company would not be able to identify any products. services or procedures a customer obtained while utilizing their card at any such healthcare facility,” the Amex board said in its statement of opposition to the proposal.

This means the company would be unable to provide the requested report, even if the proposal had sufficient shareholder backing, the board said in the proxy filing. 

Abortion-related proposals at other companies

Amex isn’t the only U.S. company whose shareholders are set to weigh in on an abortion-related proposal this year after last year’s Supreme Court ruling that overturned the landmark Roe v. Wade decision. Shareholders of the pharmaceutical company Eli Lilly and the hospital chain HCA Healthcare also filed proposals seeking abortion-related information, the Financial Times reported. 

In the case of Eli Lilly, a proposal similarly asked for a report on the “risks and costs to the Company caused by opposing or otherwise altering Company policy in response to enacted or proposed state policies regulating abortion, and detailing any strategies beyond litigation and legal compliance that the Company may deploy to minimize or mitigate these risks.” And the drug-maker similarly sought SEC clearance to nix the proposal. The SEC also said this month that Eli Lilly must hold the vote, according to Bloomberg Law.

The HCA Healthcare shareholder proposal pressed the healthcare provider to disclose more information about the situations in which it provides abortions. Shareholders withdrew that proposal last month after they said HCA “clarified publicly that its member hospitals are prepared to provide emergency abortions.

Change Finance also filed other proposals, similar to the one it put forward at Amex, at two other financial firms. It has since withdrawn them, co-CEO Dorrit Lowsen said Monday. She declined to name those companies. Change Finance “seeks sufficient information from American Express to allow shareholders to assess for themselves the degree of risk exposure American Express may face with respect to this issue,” she said in an email. 

An Amex spokesperson declined to comment beyond the board’s opposition statements in the filing. 

The shareholder proposal suggested the report also consider “the implementation of a data privacy policy wherein consumers nationwide would have ‘deletion rights,’ and would be notified by the Company about any law enforcement information requests regarding their data prior to complying with any such request.” 

Additionally, the shareholder requested that the report gather input from reproductive rights and civil liberties groups, according to the proxy filing.

Proposal on executive pay

Executive pay is also set to be voted on at the company’s May meeting. A shareholder proposal recommended that the company get shareholder approval for any senior manager pay package that provides severance or termination pay with a value exceeding 2.99 times the sum of that executive's base salary and targeted short-term bonus. The Amex board also provided a statement of opposition with regard to that proposal.

The proxy also disclosed executive pay for last year. Total compensation for Amex CEO Steve Squeri jumped 88% for 2022, to $48 million, largely due to a special stock options grant valued at $15 million that he received last October. The company said that award was designed to ensure leadership continuity and recognize Squeri’s contributions to the company’s financial performance. 

He also received a $10.3 million bonus – about 29% larger than his 2021 bonus. His “other” compensation, a catch-all category for income and benefits, rose 6% to $579,000, due to perquisite increases for local and other travel benefits and security during personal trips. 

Squeri’s base salary remained unchanged last year at $1.5 million, and represented 5% of his total compensation. The remaining share of his compensation was performance based, with 65% tied to the company’s future performance, the proxy filing noted. 

Squeri has been Amex’s CEO since 2018. His 2021 pay package was worth $28.5 million, which was 39% higher than the company’s target for that year. 

Amex did receive SEC backing to block a shareholder proposal related to the use of its cards and payments services for gun purchases. The National Center for Public Policy Research had submitted a proposal that requested Amex board evaluate and report on how the company could reduce risks associated with processing payments for firearms. Amex sought SEC approval to omit the proposal on the grounds that it was an attempt to micromanage the company.