The Fennel Newsletter
Happy early Thanksgiving to everyone who is celebrating with their friends or family. At Fennel, we’re thankful for all our lovely clients, as well as all of you who are reading this newsletter.
This month, we’re going to bring back an old section from our June 2023 newsletter entitled…
This graph was shared during a recent webinar put on by ShareAction and The Shareholder Commons, two stakeholder capitalism advocacy groups.
The webinar focused on how income inequality can pose a risk to investments and economic systems (read their research here). The graph above specifically shows the relationship between union membership, and the share of total income in the economy going to the wealthiest 10% of people.
As you can see, there’s a pretty clear inverse relationship between the two. As union membership goes down, income going to the top 10% goes up, and vice versa.
Now, correlation doesn’t always imply causation (I’m sure your high school statistics teacher wants you to remember that), but the direct relationship between the two shouldn’t be too surprising. According to this data, unions may be an effective way to redistribute wealth from the wealthiest demographics to the working class (or at least a byproduct).
Even though the graph cuts off at 2017, this data may provide extra context as to why we’re seeing so many unionization movements and strikes in 2023. And, importantly, it may provide context as to what happens next.
With each successful strike and negotiation, more are likely to follow, which in turn encourages higher union membership. If the trend shown in the graph continues, we may see income inequality start to decrease too.
Shareholder Votes
Should Microsoft report on whether there are inequalities in its employee benefits? (Dec. 7) — If you’re a Microsoft shareholder reading through items to vote on for the company’s upcoming shareholder meeting, Proposal 5 might not immediately catch your attention.
The proposal appears as “Proposal 5: Report on Gender-Based Compensation and Benefit Gaps (Shareholder Proposal)” in Microsoft’s recently distributed proxy materials.
You may read that and think, “Oh maybe the party putting forward this proposal wants to ensure that there are no pay gaps between men and women working at Microsoft, and that all employees get equal access to benefits.” But that’s not exactly what this proposal asks for.
Instead, it uses shareholder voting as a platform to advocate for anti-abortion and anti-trans talking points.
For example, it uses ideologically-charged language and claims such as:
- “Women who choose not to abort their pre-born children, and instead decide to raise them, suffer a pay/benefits inequity compared to their company colleagues who do choose to abort their children … There is significant expense both in aborting and in raising children, yet Microsoft Corporation incentivizes the former with a subsidy and discourages the latter with no subsidy.”
- “The Company has staked out a position on gender dysphoria/confusion which affirms that sufferers can transition to a different sex, both psychologically and physically. Yet an increasing body of scientific evidence shows distinct harms actually result from medical and surgical ‘transition’ treatments.”
In response, this is what Microsoft says:
“The proponent requests Microsoft report on median compensation and benefits gaps across gender ‘as they address reproductive and gender dysphoria care.’ Microsoft already provides pay equity and median gender and racial pay gap reporting. Based on the language of the proposal, the request for additional reporting appears to stem from animosity towards certain reproductive and gender-related health benefits.”
Microsoft believes that this proposal is more interested in spouting personal beliefs than it is about enacting change at the company.
But regardless where you stand on abortion and trans rights, what is important to note with this specific proposal is it comes across as a wolf in sheep’s clothing. The title of the proposal makes it seem like this will be a shareholder proposal about promoting gender equality and employee benefits. Instead, it takes a hard right stance on abortion and trans issues. This may confuse (or even trick) shareholders voting on this proposal — especially progressive-leaning shareholders who want to promote gender equality.
All this is to say, shareholders should pay attention to every proposal they decide to vote on. If you don’t read closely, you may miss the hidden agenda in each proposal.
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