THE CHARLES SCHWAB CORPORATION | Ascertain Client Voting Preferences at Charles Schwab Corporation (The)

AGM date
Previous AGM date
Resolution details
Company ticker
Resolution ask
Report on or disclose
ESG theme
  • Environment
  • Social
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Company sector
Company HQ country
United States
Resolved clause
RESOLVED:  Charles Schwab (“SCHWAB,” or “Company”) shareholders request our Company prepare a report on the reputational and financial risks to the Company of misalignment between proxy votes it casts on behalf of clients and its client’s values and preferences, as well as strategies for addressing such misalignments on important issues. The requested report shall be available to stockholders and investors by October 1, 2024, prepared at reasonable cost and omitting proprietary information.
Supporting statement
Controversy over proxy voting - especially over environmental, social, and governance (“ESG”) proposals - is regularly reported on, debated, and enshrined in state law.1
Much debate centers on intermediaries, such as SCHWAB, and their role in casting votes for clients and beneficial owners. Every vote opens SCHWAB to controversy, either for failing to adhere to ESG principles or being too “woke.”
The divergence between the interests of asset managers like SCHWAB and their investors and clients is an issue that has been taken up at the highest levels of government. A proposed bill would require asset managers like SCHWAB to pass votes through to investors under certain conditions.2 President Biden’s first veto was about consideration of ESG factors in retirement plans.3
The landscape has shifted: SCHWAB can only execute votes in clients' best interests (and avoid controversy) by first soliciting their preferences4 on ESG topics.
Votes are now filed in machine-readable format, which makes it easier for clients to identify votes misaligned with their preferences.5 Reliance on traditional proxy advisors invites further criticism, as their conflicts of interest are scrutinized.6
SCHWAB offers extensive portfolio customization through Schwab Intelligent Portfolios7 and Personalized Indexing,8 but not for proxy voting, a core advisor responsibility subject to fiduciary duties.9 In its commingled funds, SCHWAB does not offer voting choices.
Criticism of BlackRock, Vanguard, and State Street10 led them to provide voting choices. However, these programs are denounced as limited false choices, over-relying on traditional proxy advisors.11 In October 2022, SCHWAB announced piloting a proxy polling solution for three funds.12 However, prospectus materials omit mention of using investor preferences,13 instead describing general policies deferring to management’s recommendations and utilizing traditional proxy advisors ISS and Glass Lewis. New technologies can tailor proxy voting on important issues such as climate change, diversity, executive pay, and political expenditures to the unique preferences of each investor.14
Investors want a voice. Approximately 83% of investors, irrespective of age, life stage, or ideological bent, want managers to consider their preferences when voting on environmental issues.15
Financial services companies that fail to engage clients on important voting preferences will be subject to ever-increasing legal and reputational jeopardy.
Vote FOR Ascertain Client Voting Preferences - Proposal [4*]
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9 See 14 CFR 275.206(4)-6 and accompanying staff bulletins. 
12 The poll asked investors, for example, if they’d rather support independent directors or reduction of “fur production,” a difficult comparison. 
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DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.