THE CHARLES SCHWAB CORPORATION | Lobbying Expenditures Disclosure at The Charles Schwab Corporation

AGM date
Proposal number
Resolution details
Company ticker
Resolution ask
Report on or disclose
ESG theme
  • Governance
ESG sub-theme
  • Lobbying / political donation
Company sector
Company HQ country
United States
Resolved clause
Resolved, the stockholders Schwab 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 Schwab 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 management's and the Board's decision-making process and oversight for making payments described in section 2 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 Schwab 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 Audit Committee or other relevant oversight committees and posted on Schwab's website.
Whereas clause
Whereas, we believe in full disclosure of The Charles Schwab Corporation's ("Schwab") direct and indirect lobbying activities and expenditures to assess whether its lobbying is consistent with its expressed goals and in the best interests of stockholders.
Supporting statement
We encourage transparency and accountability in Schwab's use of funds to lobby. Schwab spent USD26,763,000 from 2010 - 2019 on federal lobbying. These figures do not include state lobbying expenditures, where Schwab also lobbies but disclosure is uneven or absent. For example, Schwab spent USD700,960 on lobbying in California from 2010 - 2018. Schwab's lobbying on the Retirement Enhancement and Savings Act has drawn scrutiny.[1]

Schwab serves on the board of the Securities Industry and Financial Markets Association (SIFMA), which has spent USD65,350,000 on lobbying from 2010 - 2019. And Schwab previously served on the board of the Chamber of Commerce,[2] which has spent over USD1.5 billion on lobbying since 1998. Schwab does not disclose its memberships in, or payments to, trade associations, or the amounts used for lobbying.

We are concerned that Schwab's lack of lobbying and trade association disclosure presents reputational risks when its lobbying contradicts company public positions. For example, Schwab supports protecting the interests of investors by holding the financial industry to a high standard, yet Schwab, SIFMA and the Chamber reportedly lobbied "to quash various aspects" of the Department of Labor fiduciary rule to require investment advisers to put their clients' interests ahead of their own.[3]

We believe the reputational damage stemming from this misalignment between general policy positions and actual direct and indirect lobbying efforts harms long-term value creation by Schwab. Thus, we urge Schwab expand its lobbying disclosure.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Dana Investment Advisors For
Universities Superannuation Scheme - USS For USS believes the clear disclosure of political and lobbying expenditure is in the best interests of shareholders.
Boston Partners Global Investors, Inc. Against