On Wednesday morning, Amazon’s shareholders — or at least avatars of their proxies — will gather for the commerce giant’s first online-only annual meeting to consider 13 governance proposals and conduct the required business of a public company.
The meeting comes amid a pandemic, record high share prices and “the hardest time we’ve ever faced,” as founder, chairman and CEO Jeff Bezos put it. The company’s response to the pandemic has further intensified scrutiny from lawmakers, regulators, employees and investors, some of whom want to press the board for answers at the meeting.
Even before the pandemic and its restrictions on large gatherings, a growing number of companies, including Microsoft, had cast off the tethers of the in-person shareholder meeting, conducting them by web or audio conference, on the grounds that they provide greater access to far-flung shareholders. Amazon pointed to better access, the reduced climate impact of a virtual meeting (because no one has to fly or drive to attend) and health and safety imperatives for its decision.
The format may seem more familiar than it might have been after nearly three months of digital work and communication for many people. But some investors fear losing something when shareholders and management do not gather in person for the annual corporate ritual, including the opportunity for direct questioning.
Wednesday’s meeting will be a test of the virtual format — particularly the question-and-answer portion — in light of the heightened scrutiny on Amazon.
So how will it unfold?
Beginning 15 minutes before the 9 a.m. start, Amazon shareholders can log in to the virtual meeting site, operated by Broadridge Financial Solutions, using a personalized control number sent along with proxy materials. (If the meeting is delayed or disrupted, the company plans to adjourn until 2 p.m.)
In addition to the usual business of electing directors, ratifying auditors and advisory voting on compensation, shareholders will hear from activist investors behind 12 shareholder proposals, each given two minutes to present.
At last year’s annual meeting, these presentations and a question-and-answer session that followed produced moments of high drama, in particular when Emily Cunningham, a leader of the Amazon Employees for Climate Justice (AECJ) group, pressed Bezos to disclose Amazon’s greenhouse gas emissions and commit the company to science-based reductions, which he did later that year.
Cunningham and another AECJ leader, Maren Costa, were fired in April for multiple violations of company policy. They say they were retaliated against after advocating for the company’s hourly workers. AECJ forwarded another climate-focused shareholder proposal this year, asking Amazon to report on disproportionate impacts of pollution from its operations on communities of color.
Other proposals seek reports on Amazon’s handling of food waste; gender and racial pay and promotion data; customer use (and potential misuse) of surveillance, computer vision and cloud computing services; efforts to restrict the sale of offensive products; risks related to “viewpoint discrimination” — the idea that Amazon favors certain social, political and religious viewpoints in content and charitable giving programs; actual and potential human rights impacts in its supply chain; and detailed lobbying spending. Another proposal would require the board be chaired by an independent director who has not previously been an executive officer at Amazon. A proposal by Amazon’s board would reduce the threshold for calling a special meeting of shareholders from 30% of the company’s ownership to 25%; another shareholder proposal calls for it to be reduced to 20%.
The board recommends votes against all the proposals, save its own.
The firings of Costa, Cunningham and several hourly workers engaged in protests and organizing — all of whom Amazon says were terminated for rules violations, some involving safety — has ratcheted up the criticism Amazon was already under, and provided labor unions with a potent message, fueling organizing efforts.
A union-affiliated investment fund and the institutional investor group Principles for Responsible Investment (PRI) last week gathered public pension-fund managers on a web conference with Amazon employees and former employees, including Costa.
They urged other investors to question Amazon’s board at the annual meeting on its oversight of the company’s pandemic response; coronavirus infection rates among its workforce; protections for whistle-blowers; and employee compensation during the pandemic. Amazon has called its employees heroes for their work during the pandemic and provided a $2-an-hour pay boost, scheduled to be rescinded at the end of the month.
PRI has urged investors to ask a similar set of questions of other companies during their annual meetings, as part of a campaign to help “institutional investors build a collective response to the crisis by setting expectations for portfolio companies around sustainability,” the group said in a statement.
It remains to be seen how Amazon will handle such questions. In its proxy statement, Amazon said it has “worked to offer the same participation opportunities as were provided at the in-person portion of our past meeting,” noting that shareholders can submit questions during the virtual meeting. Answers, along with a replay of the entire meeting, will be posted on the company’s investor-relations website.
In its rules of procedure for the meeting, Amazon says it will not answer questions unrelated to matters at hand or the company’s business; deemed derogatory or otherwise in bad taste; in furtherance of a personal grievance; that request nonpublic information; that are related to threatened or pending litigation; or are repetitious. A corporate spokesperson declined to comment on whether shareholder questions will be taken live during the meeting, or how questions will be selected for answering.
Amazon has given more attention to the environmental, social and governance concerns underlying many of the shareholder proposals in its investor and public communications. As one example, its 2020 annual meeting notice and proxy statement begins with four pages of “global impact highlights,” including a recitation of the company’s major climate announcements and its own analysis that “a single delivery van trip can take approximately 100 round-trip car journeys off the road on average” — a point Bezos made in response to the AECJ proposal at the 2019 meeting.