<p>In 2022, ShareAction, a well-known British activist responsible investment NGO, tabled a resolution at Sainsbury's one of the UK's largest supermarket chains, demanding that they become an accredited Living Wage employer. I wrote up the case in this journal a year ago in an article titled: “Lessons for ESG Activists: The Case of Sainsbury's and the Living Wage.” 1 That proposal was rejected by around five out of every six shareholders at the 2022 Sainsbury's AGM.</p><p>So, I was interested to see the investor response to a similar proposal making a similar demand filed by John Chevedden at the 2024 AGM of Walgreens Boots Alliance (WBA).2 The filing was supported by The Shareholder Commons and ShareAction. Were any of my lessons for ESG activists learned? And what should we make of the case made by the proposers?</p><p>On the face of it, this resolution turned out to be even less persuasive than the ShareAction proposal at Sainsbury's: fewer than one in ten of WBA's investors supported it.3 Set against this is the fact that ESG proposals have always tended to receive less support at US than European companies, and over the last 2 years even more so. So perhaps the support can be considered comparable, all things considered.</p><p>Did the proposal reflect any of the lessons that I proposed we learn from the Sainsbury's proposal? Were shareholders right to reject it? I will argue that the answers are “yes, at least in part,” to the first question—and “yes, though with regrets,” to the second.</p><p>How did the WBA proposal stack up against these?</p><p><b>The Business Case Needs to be Compelling and Made with Precision and Care</b>. Two years ago, I was quite critical of the business case put forward by ShareAction to support their proposal. It was very much framed in terms of the benefits to Sainsbury's of paying a living wage, but without compelling evidence to support the case. Indeed, most of the evidence ShareAction cited either was not applicable to the situation or even undermined its own case.4 They failed to demonstrate that paying higher wages than necessary in a competitive low margin business would help Sainsbury's be more successful.</p><p>There are <i>theoretical reasons</i> why higher wages can be more than offset by increased productivity, but it is not an automatic result, and the win-win scenario can be quite difficult to pull off. It is not clear that shareholders are better placed than company management to decide whether this can be done in the specific circumstances faced by the company. Indeed, if improving shareholder value was as easy as increasing wages, we would expect more management teams in the retail sector to follow this path, whereas only a small minority do.5</p><p>This line of argument is notably different from that set out in the Sainsbury's proposal. The proposers are explicitly acknowledging and accepting the possibility that paying living wages might damage WBA's financial returns. Their innovation is to con
{"title":"Living wages revisited: The case of Walgreens Boots Alliance","authors":"Tom Gosling","doi":"10.1111/jacf.12611","DOIUrl":"10.1111/jacf.12611","url":null,"abstract":"<p>In 2022, ShareAction, a well-known British activist responsible investment NGO, tabled a resolution at Sainsbury's one of the UK's largest supermarket chains, demanding that they become an accredited Living Wage employer. I wrote up the case in this journal a year ago in an article titled: “Lessons for ESG Activists: The Case of Sainsbury's and the Living Wage.” 1 That proposal was rejected by around five out of every six shareholders at the 2022 Sainsbury's AGM.</p><p>So, I was interested to see the investor response to a similar proposal making a similar demand filed by John Chevedden at the 2024 AGM of Walgreens Boots Alliance (WBA).2 The filing was supported by The Shareholder Commons and ShareAction. Were any of my lessons for ESG activists learned? And what should we make of the case made by the proposers?</p><p>On the face of it, this resolution turned out to be even less persuasive than the ShareAction proposal at Sainsbury's: fewer than one in ten of WBA's investors supported it.3 Set against this is the fact that ESG proposals have always tended to receive less support at US than European companies, and over the last 2 years even more so. So perhaps the support can be considered comparable, all things considered.</p><p>Did the proposal reflect any of the lessons that I proposed we learn from the Sainsbury's proposal? Were shareholders right to reject it? I will argue that the answers are “yes, at least in part,” to the first question—and “yes, though with regrets,” to the second.</p><p>How did the WBA proposal stack up against these?</p><p><b>The Business Case Needs to be Compelling and Made with Precision and Care</b>. Two years ago, I was quite critical of the business case put forward by ShareAction to support their proposal. It was very much framed in terms of the benefits to Sainsbury's of paying a living wage, but without compelling evidence to support the case. Indeed, most of the evidence ShareAction cited either was not applicable to the situation or even undermined its own case.4 They failed to demonstrate that paying higher wages than necessary in a competitive low margin business would help Sainsbury's be more successful.</p><p>There are <i>theoretical reasons</i> why higher wages can be more than offset by increased productivity, but it is not an automatic result, and the win-win scenario can be quite difficult to pull off. It is not clear that shareholders are better placed than company management to decide whether this can be done in the specific circumstances faced by the company. Indeed, if improving shareholder value was as easy as increasing wages, we would expect more management teams in the retail sector to follow this path, whereas only a small minority do.5</p><p>This line of argument is notably different from that set out in the Sainsbury's proposal. The proposers are explicitly acknowledging and accepting the possibility that paying living wages might damage WBA's financial returns. Their innovation is to con","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"36 2","pages":"16-20"},"PeriodicalIF":0.7,"publicationDate":"2024-06-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/jacf.12611","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141273138","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Nationalism and capitalism","authors":"Jerry Z. Muller","doi":"10.1111/jacf.12610","DOIUrl":"10.1111/jacf.12610","url":null,"abstract":"","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"36 2","pages":"53-59"},"PeriodicalIF":0.7,"publicationDate":"2024-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141118756","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Capitalism and the Jews revisited","authors":"Jerry Z. Muller","doi":"10.1111/jacf.12602","DOIUrl":"10.1111/jacf.12602","url":null,"abstract":"","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"36 2","pages":"66-72"},"PeriodicalIF":0.7,"publicationDate":"2024-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141115700","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The American Dream Is Alive and Well (and the Problem of U.S. Inequality Greatly Exaggerated)*","authors":"Michael R. Strain","doi":"10.1111/jacf.12601","DOIUrl":"10.1111/jacf.12601","url":null,"abstract":"","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"36 2","pages":"36-39"},"PeriodicalIF":0.7,"publicationDate":"2024-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140929558","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Capitalism and inequality: What the right and the left get wrong","authors":"Jerry Z. Muller","doi":"10.1111/jacf.12600","DOIUrl":"10.1111/jacf.12600","url":null,"abstract":"","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"36 2","pages":"45-52"},"PeriodicalIF":0.7,"publicationDate":"2024-04-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140841354","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The threat of democracy to capitalism","authors":"Jerry Z. Muller","doi":"10.1111/jacf.12599","DOIUrl":"10.1111/jacf.12599","url":null,"abstract":"","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"36 2","pages":"60-65"},"PeriodicalIF":0.7,"publicationDate":"2024-04-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140657349","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The neglected moral effects of the market: Arguments from the last 300 years","authors":"Jerry Z. Muller","doi":"10.1111/jacf.12598","DOIUrl":"10.1111/jacf.12598","url":null,"abstract":"","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"36 2","pages":"41-44"},"PeriodicalIF":0.7,"publicationDate":"2024-04-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140802355","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Will fractional-reserve stablecoin banking replace bitcoin and some traditional banking payments?","authors":"Charles W. Calomiris","doi":"10.1111/jacf.12591","DOIUrl":"https://doi.org/10.1111/jacf.12591","url":null,"abstract":"","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"36 1","pages":"24-28"},"PeriodicalIF":0.9,"publicationDate":"2024-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140559861","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"New thinking about the effects of negative interest rates on banks and the economy","authors":"Charles W. Calomiris","doi":"10.1111/jacf.12588","DOIUrl":"10.1111/jacf.12588","url":null,"abstract":"","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"36 1","pages":"34-35"},"PeriodicalIF":0.9,"publicationDate":"2024-03-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140380327","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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