Cadence Design Systems | Avoid Brand Damage due to Corporate Political Spending at Cadence Design Systems

Status
Omitted
Previous AGM date
Resolution details
Company ticker
CDNS
Lead filer
John Chevedden
Resolution ask
Report on or disclose
ESG theme
  • Governance
ESG sub-theme
  • Lobbying / political engagement
Type of vote
Shareholder proposal
Filer type
Shareholder
Company HQ country
United States
Resolved clause
Shareholders request that Cadence Design Systems prepare and annually update a report, which shall be presented to the pertinent board of directors committee and posted on the Company’s website, disclosing the Company’s: (a) Policies and procedures for making electoral contributions and expenditures (direct and indirect) with corporate funds, including the board’s role (if any) in that process; and (b) Monetary and non monetary contributions or expenditures that could not be deducted as an “ordinary and necessary” business expense under section 162(e)(1)(B) of the Internal Revenue Code, including (but not limited to) contributions or expenditures on behalf of candidates, parties, and committees and entities organized and operating under section 501(c)(4) of the Internal Revenue Code, as well as the portion of any dues or payments made to any tax exempt organization (such as a trade association) used for an expenditure or contribution that, if made directly by the Company, would not be deductible under section 162(e)(1)(B) of the Internal Revenue Code. The report shall identify all recipients and the amount paid to each recipient from Company funds. This proposal does not encompass lobbying spending.
Supporting statement
Supporting Statement Cadence long term shareholders support transparency and accountability in corporate electoral spending. The Conference Board’s 2021 “Under a Microscope” report warns “Political activity can pose increasingly significant risks for companies, including the perception that political contributions—and other forms of activity—are at odds with core company values.” A recent poll of retail shareholders by Mason Dixon Polling & Research found that 83% of respondents said they would have more confidence investing in corporations that have adopted reforms that provide for transparency and accountability in political spending. Cadence discloses a brief policy regarding corporate political spending to candidates, parties, and committees, and 527 groups. This political spending is described on its website and identifies related corporate, foundation oriented spending, particularly payments to trade associations, 501(c)(4) social welfare organizations, and other related beneficiary groups. Cadence scored only 24% on a 100% scale in the 2025 CPA Zicklin Index of Corporate Political Disclosure and Accountability <https://www.politicalaccountability.net/wp-content/uploads/2021/12/2025-CPA-Zicklin-Index.pdf>. This proposal received 44% support at the 2025 Cadence annual meeting without any special effort by the proponent. This likely means more than 50% support from the Cadence shareholders who have access to independent proxy voting advice and who are thus more informed Cadence shareholders on the merits of this proposal. This proposal asks Cadence to disclose all of its electoral spending, including payments to Trade Associations and 501(c)(4) social welfare organizations, which may be used for electoral purposes—and are otherwise undisclosed. Without this information, investors cannot know whether the Company’s political donations align with or conflict with its core values on climate change and sustainability which are of concern.

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