In mid-June, 2015, Time Warner (Warner Bros.) will become the first major movie studio to hold a shareholder vote on a Smokefree Movies proposal. At Time Warner’s annual meeting of shareholders in mid-June, there will be a presentation about the proposal, and the company will announce preliminary vote totals. This historic vote comes in the wake of Disney’s announcement that it will become the first movie studio to eliminate smoking in youth-rated films.
The full proposal is available here. The operative language:
Stockholders request that the Board amend the Nominating and Governance Committee Charter (or add an equivalent provision to another Board Committee Charter) to include:
Providing oversight and public reporting concerning the formulation and implementation of policies and standards to determine transparent criteria on which company products continue to be distributed that:
1) especially endanger young people’s well-being;
2) have the substantial potential to impair the reputation of the Company; and/or
3) would reasonably be considered by many offensive to the family and community values integral to the Company's promotion of its brands
Note that the vast majority of shareholder proposals are non-binding, meaning the company is not required by law to comply regardless of the level of support. But these proposals, even the “low” votes, are important: when 15 percent of the total dollars invested a multi-billion dollar company vote for a shareholder proposal, shareholders have demonstrated a lack of confidence in the company’s management.
Shareholder campaigns lead to huge changes every year among publicly-traded companies.
Background: Last September, shareholder advocates As You Sow and several faith-based investors filed shareholder proposals with Disney and Viacom. The proposals called for the companies to address the public health impacts of their tobacco impressions, in response to the Surgeon General’s report and CDC publications.
Both Disney and Viacom challenged the proposals at the Securities and Exchange Commission (SEC). The proponents wrote briefs defending their right to raise this issue before shareholders, but the SEC rejected the resolutions, finding that smoking in films did not constitute a significant policy issue (despite the million deaths it will cause among today’s children).
In March, Disney CEO Robert Iger announced a new policy making all youth-rated Disney Corporation films smokefree.
In December 2014, As You Sow and the other investors filed revised resolutions with Comcast (Universal) and Time Warner (Warner Bros). Comcast challenged the resolution, which was omitted by the Securities and Exchange Commission in late March.