RTX Corporation | Lobbying Expenditures Disclosure at RTX Corporation

Status
30.74% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
RTX
Lead filer
Individual
Resolution ask
Report on or disclose
ESG theme
  • Governance
ESG sub-theme
  • Lobbying / political engagement
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Industrials
Company HQ country
United States
Resolved clause
RESOLVED, shareowners of RTX request the preparation of a report, updated annually, disclosing:
1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.
2. Payments by RTX used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.
3. RTX’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.
4. Description of management’s and the Board’s decision-making process and oversight for making payments described in sections 2 and 3 above.
For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which RTX is a member.
Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.
The report shall be presented to the Committee on Governance and Public Policy and posted on RTX’s website.
Supporting statement
SUPPORTING STATEMENT
Full disclosure of RTX’s lobbying activities and expenditures is needed to assess whether RTX’s lobbying is consistent with its expressed goals and in shareowners’ best interests. RTX spent $37,680,000 from 2020 – 2022 on federal lobbying. This does not include state lobbying, where RTX also lobbies but disclosure is uneven or absent. RTX also lobbies abroad, spending between €200,000–299,000 on lobbying in Europe for 2022. RTX has drawn scrutiny for reportedly overbilling the government for employee time spent on lobbying and corporate activities.1
Companies can give unlimited amounts to third party groups that spend millions on lobbying and undisclosed grassroots activity.2 RTX fails to disclose its payments to trade associations and social welfare groups, or the amounts used for lobbying, to shareholders. RTX belongs to the Business Roundtable, National Association of Manufacturers (NAM) and US Chamber Commerce, which together have spent over $2.4 billion on federal lobbying since 1998.
RTX’s lack of disclosure presents reputational risks when its lobbying contradicts company public positions. For example, RTX supports addressing climate change, yet the Business Roundtable lobbied against the Inflation Reduction Act3 and the Chamber reportedly has been a “central actor” in dissuading climate legislation over a two-decade period.4 As RTX has drawn attention for paying lower taxes than most Americans,5 NAM has attracted attention for opposing a new corporate minimum tax.6 And while RTX does not belong to the controversial American Legislative Exchange Council, which is attacking “woke” investing,7 it is represented by the Chamber, which sits on its Private Enterprise Advisory Council.8
Reputational damage stemming from these misalignments could harm shareowner value. RTX should expand its lobbying disclosure.
1 https://tucson.com/news/local/business/tucson-mainstay-raytheon-loses-appeal-over-lobbying-costs/article_bb11ce30-8d44-11ed-a39c-a3a42ef0cd90.html.
2 https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/.
3 https://www.theguardian.com/environment/2022/aug/19/top-us-business-lobby-group-climate-action-business-roundtable.
4 https://www.washingtonpost.com/politics/2023/08/02/climate-group-pushes-big-tech-exit-nations-largest-business-lobby/.
5 https://www.kiplinger.com/slideshow/investing/t052-s001-10-companies-lower-tax-rates-than-most-americans/index.html.
6 https://www.nytimes.com/2023/09/07/business/corporate-minimum-tax-impact.html.
7 https://www.wbur.org/hereandnow/2023/03/22/esg-investing-fossil-fuels.
8 https://ohiocapitaljournal.com/2023/09/06/coming-soon-in-ohio-alec-releases-new-raft-of-model-legislation/.

Filed by John Chevedden

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