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Employee Shareholders Become Activists

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May 30, 2019 | Jennifer Namazi

Employee Shareholders Become Activists

One of the primary goals commonly cited in equity programs is that of aligning employee and shareholder interests. Another is just simply turning employees into shareholders. Yet it’s not often that we hear of employee equity participants actually behaving like full shareholders. Some of Amazon’s employees are taking their role as shareholders as just that – making proposals of their own that will be voted upon in an upcoming shareholder’s meeting.

A New York Times article late last year (“Tech Workers Got Paid in Company Stock. They Used it to Agitate for Change.” – Kate Conger, December 16, 2018) described how “At Amazon, more than a dozen employees who had received stock grants recently exercised their rights as shareholders. In late November and early December, they filed identical shareholder petitions asking the e-commerce giant to release a comprehensive plan addressing climate change.” Amazon held their annual meeting earlier this month and the proposals didn’t pass, but there certainly was a considerable amount of buzz around the mere existence of employee shareholder submitted proposals.

Will this begin a trend of employees taking on more of an activist role in bringing their own ideas about the company to the shareholder table? This scenario further accentuates the observation that employees want to be heard, and in many cases are taking active steps to achieve that goal. Another article by Activist Insight (“In Depth: Employee Feedback,” April 4, 2019) digs further into employee activism and suggests that “management teams will soon be forced to be more transparent and responsible after employees fight for a change in policy - either through shareholder proposals or other actions.”

Companies with equity programs should take note of this wave of employee shareholder activism and determine if current internal communication and practices are sufficient to address employee concerns. Ideally employee voices are heard and valued internally, and participation in the equity plan remains a strong reward/motivation vehicle rather than the avenue in which employees find the best option to bring their ideas to the table.

-Jennifer
 

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