INTERNATIONAL BUSINESS MACHINES (IBM) CORPORATION | Report on lobbying activities at International Business Machines Corp. (IBM)

Status
37.73% votes in favour
AGM date
Previous AGM date
Proposal number
4
Resolution details
Company ticker
IBM
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
Technology
Company HQ country
United States
Resolved clause
Resolved: IBM stockholders 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 IBM 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. Description of managementÕs decision-making process and the BoardÕs oversight for making payments described above.
For purposes of this proposal, a Ògrassroots lobbying communicationÓ 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. ÒIndirect lobbyingÓ is lobbying engaged in by a
trade association or other organization of which IBM is a member.
Both Òdirect and indirect lobbyingÓ and Ògrassroots lobbying communicationsÓ include efforts at the local, state and federal
levels.
The report shall be presented to the Audit Committee and posted on IBMÕs website.
Whereas clause
Whereas: full disclosure of IBMÕs lobbying activities and expenditures is needed to assess whether IBMÕs lobbying is consistent
with IBMÕs expressed goals and stockholder interests.
Supporting statement
Supporting Statement
IBM spent $67 million from 2010-2022 on federal lobbying. This does not include state lobbying, where IBM lobbied in at least
27 states in 2022 and spent over $935,000 on lobbying in California from 2010-2022. IBM also lobbies abroad, spending between
Û1,750,000-1,999,999 on lobbying in Europe for 2021.
IBM deserves credit for refraining from making political contributions. But companies can give unlimited amounts to third party
groups that spend millions on lobbying and undisclosed grassroots activity. These groups may be spending Òat least double whatÕs
publicly reported.Ó1 Unlike many of its peers, IBM fails to disclose its payments to trade associations and social welfare
organizations, or the amounts used for lobbying, to stockholders. IBM belongs to the Business Roundtable and US Chamber
Commerce, which together have spent over $2.2 billion on federal lobbying since 1998.
IBMÕs lack of disclosure presents reputational risk when its lobbying contradicts company public positions. For example, IBM
believes in addressing climate change, yet the Business Roundtable lobbied against the Inflation Reduction Act2 and the Chamber
reportedly has been a Òcentral actorÓ in dissuading climate legislation over a two-decade period.3 IBM has attracted scrutiny for
avoiding federal income taxes,4 as the Business Roundtable has lobbied against a new minimum corporate tax.5 And while IBM
does not belong to the controversial American Legislative Exchange Council, which is attacking ÒwokeÓ investing,6 it is
represented by its trade association, with the Chamber sitting on its Private Enterprise Advisory Council. Reputational damage
stemming from these misalignments could harm stockholder value.
Last year, this proposal exceeded 48% support at IBM. Thus, I urge IBM to expand its lobbying disclosure.
1 https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/.
2 https://www.theguardian.com/environment/2022/aug/19/top-us-business-lobby-group-climate-action-business-roundtable.
3 https://www.washingtonpost.com/politics/2023/08/02/climate-group-pushes-big-tech-exit-nations-largest-business-lobby/.
4 https://www.axios.com/2019/12/16/fortune-500-companies-corporate-income-tax.
5 https://www.washingtonpost.com/business/2023/08/14/biden-corporate-tax/.
6 https://www.wbur.org/hereandnow/2023/03/22/esg-investing-fossil-fuels.

Filed by John Chevedden

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