Shareholders to Target and Best Buy: Shape Up!

According to the Los Angeles Times, The Associated Press and Business Ethics Magazine, Target’s shareholders are fed up. Three shareholder investment institutions that control stock in both Target and Best Buy: Calvert Asset Management, Trillium Asset Management, and Walden Asset Management, filed shareholder resolutions demanding the companies overhaul their process for making future political contributions. The resolution demands a “comprehensive review of Target’s political contributions and spending processes including the criteria used for such contributions,” and “oversight processes by management and the Board.”

The three named shareholder investment institutions collectively control 1.1 million Target shares (worth $57.5 million dollars, US,) and 44,000 Best Buy shares (worth $11.3 million dollars, US.) While those institutions’ shares are relatively small, what’s really encouraging is that due to their filing the shareholder resolutions with Target and Best Buy, other investment institutions have begun paying attention. One such investment institution, the New York state pension fund and union investment managers, is now also considering signing the resolution initiated by Calvert, Trillium and Walden.

In a statement released by New York Comptroller Thomas DiNapoli’s office, DiNapoli spokesman Ola Fadahunsi stated, “Target should have carefully considered the implications that direct political contributions can have toward shareholder value. It’s troubling to think that they can fund controversial candidates without properly assessing the risks and rewards involved.” Thomas DiNapoli is the New York state pension fund’s sole trustee, so if anyone can speak for the fund it’s him.

In stark contrast to the $57.5 million dollars of Target shares that Calvert, Trillium and Walden hold, the New York state pension fund holds 3.8 million shares in Target, with a whopping current market value of $283 million dollars, US.

Another large investment institution, New York City Employee Retirement System, is also stepping up. Board member Bill de Blasio said that he would ask other members of his board to support the resolution. The New York City Employee Retirement System holds nearly 1 million Target shares.

The shareholder investment institutions of Calvert, Trillium and Walden each issued public statements about the shareholder resolutions.

Trillium vice president Shelley Alpern said, “A good corporate political contribution policy should prevent the kind of debacle Target and Best Buy walked into. We expect companies to evaluate candidates based upon the range of their positions – not simply one area – and assess whether they are in alignment with their core values. But these companies’ policies are clearly lacking that.”

Walden spoke through their senior vice president Tim Smith. Smith said, “imprudent donations can potentially have a major negative impact on company reputations and business if they don’t carefully and fully assess a candidate’s positions.”

The Director of Shareholder Advocacy at Calvert Asset Management, Stu Dalheim, said, “We continue to call for increased transparency and disclosure of corporate political spending. The absolutely wrong conclusion for companies to draw from this controversy is that everything will be all right as long as they conceal their political contributions.”

Shelley Alpern from Trillium went on to add, “Tom Emmer has made it no secret that as governor he would deny members of the LGBT their full civil rights. No company can credibly claim that it continues to support the LGBT community if at the same time it is financing a deliberate effort to keep it in second-class citizenship.”

Here’s hoping the two New York funds, as well as other shareholder investment institutions sign those resolutions and let Target see that there are immense financial ramifications for supporting and therefore endorsing an anti-gay candidate.