For the second year in a row, resolutions related to companies’ political spending were the most common shareholder proposals put forth during the 2012 proxy season. Many of these proposals, particularly those seeking reports on political contributions and expenditures, received record levels of shareholder support. Given the highly dynamic regulatory environment that surrounds issues related to corporate political spending, and the associated reputational implications, investors are becoming increasingly interested in disclosure of these contributions. As a result of this heightened scrutiny, companies engaged in the political process may be exposed to more pronounced risks that could potentially damage shareholder value.

According to researchers from the Sustainable Investments Institute, nearly 60% of S&P 500 companies use funds from their corporate treasuries on political campaigns and as many as 80% of S&P 500 companies appear to have spent some money on political campaigns, either from the corporate treasury or through political action committees (“PACs”). In addition, corporations may be engaging in political spending through other means. Political organizations, many of which receive funding from corporations, have been empowered by the Supreme Court to spend more than ever before for elections and lobbying. The 2012 elections were the most expensive in U.S. history, with total spending of $6 billion exceeding that of previous elections by more than $700 million. Spending in the presidential election alone totaled an estimated $2.6 billion, with more than $528 million coming from outside organizations, many of which are funded through corporate contributions.

Given the dramatic increase in spending and the variety of ways in which companies may assert their political voice, it should come as little surprise that investors are growing more concerned with how companies are ensuring that political donations and related activities are aligned with maximizing long-term shareholder value. Many investors have realized that increased political activity brings increased risk. This realization has intensified as the avenues through which companies can spend corporate funds to influence elections and legislation have expanded, primarily as a result of the 2010 Citizens United Supreme Court case.

Political Contributions: A Glass Lewis Issue Report discusses the emerging issue of corporate political spending in the context of shareholder engagement. Beginning with a brief history of relevant regulation and how corporate political spending has evolved in recent years, we also discuss related academic research and outline the various initiatives that investors and legislative bodies have undertaken with respect to this issue. Finally, Glass Lewis discusses the various shareholder proposals put forth on this topic in the past several years and our analysis of these proposals. The goal of this report is to provide detailed information about corporate political spending so that shareholders can make more informed proxy voting decisions.

Clients of Glass Lewis can access the report one of two ways: Those with access to, first log in using your credentials, and then download Political Contributions: A Glass Lewis Issue Report here, or for those who exclusively use our ViewPoint voting platform, please email your Client Services Manager to request the reports. Non clients can request the report through