PNC Financial Services – Political Spending (2017)
Outcome: Successfully withdrawn when company committed to significant improvements to political spending disclosure.
Resolved, that the shareholders of PNC Financial Services Group (“Company” or “PNC”) hereby request that the Company provide a report, updated semiannually, disclosing the Company’s:
1. Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum.
2. Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including:
a. The identity of the recipient as well as the amount paid to each; and
b. The title(s) of the person(s) in the Company responsible decision-making.
The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website.
Payments used for lobbying are not encompassed by this proposal.
Long-term shareholders of PNC support transparency and accountability in corporate spending on political activities. These activities include direct and indirect political contributions to candidates, parties, ballot measure committees, or organizations; independent expenditures; or electioneering communications on behalf of federal, state or local candidates.
Disclosure is in the best interest of the company and its shareholders, while gaps in transparency and accountability may expose the company to risks that could threaten long-term shareholder value. The Supreme Court’s Citizens United decision recognized the importance of political spending disclosure for shareholders when it said, “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”
PNC contributed almost $2 million in corporate funds since the 2004 election cycle. (CQ: http://moneyline.cq.com and National Institute on Money in State Politics: http://www.followthemoney.org – note: this may include some PAC spending) However, our Company ranked poorly in the 2016 CPA-Zicklin Index of Corporate Political Accountability and Disclosure, which rated the top 300 S&P 500 companies, scoring just 52.9 out of 100 points.
Relying on publicly available data does not provide a complete picture of the Company’s political spending. For example, the Company’s payments to trade associations and “social welfare organizations” – organized under the 501(c)(4) section of the IRS codes – used for political activities are undisclosed and unknown. At many companies, management does not know how third-party groups use corporate money politically. This proposal asks PNC to disclose all of its political expenditures, including payments to trade associations and other tax-exempt organizations.
This governance reform would bring PNC in line with peers like Fifth Third, BB&T, Regions, U.S. Bancorp, and KeyCorp.
PNC’s Board and its shareholders need comprehensive disclosure to be able to fully evaluate the political use of corporate assets.