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Tech workers got paid in company stock. They used it to agitate for change – San Francisco Chronicle


Silicon Valley technology firms are known for giving stock to their workers, a form of compensation that often helps employees feel invested in their companies.

But tech workers are now starting to use those shares to turn the tables on their employers. As many tech employees take a more activist approach to how their innovations are being deployed and increasingly speak out on a range of issues, some are using the stock as a way to demand changes at their companies.

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.

Their filing appears to be the first time that tech employees have led their own shareholder proposal, according to activist investors. In the proposal, which will be voted on at Amazon’s annual shareholder meeting next spring, employees asked the company’s board to say how it would respond to climate change and reduce its dependence on fossil fuels.

“We realized we could use our position as employees and our power and our rights as shareholders to bring visibility of this issue to the board and the top leaders of this company,” said Eliza Pan, a program manager who has worked at Amazon for five years and is one of the employees who signed on to the proposal.

Pan, who earned Amazon shares as part of her compensation package, said workers must own at least $2,000 in stock for a year to file a shareholder proposal. “We had this power, and we wanted to leverage that power,” she said.

The move by Amazon’s employees builds upon similar activism at Google this year. In March, its workers were part of a shareholder petition by Zevin Asset Management that sought to link executive compensation to diversity and inclusion goals. Google’s employees did not directly file the proposal, but joined Zevin and presented it at the annual shareholder meeting of Alphabet, Google’s parent company.

The proposal was ultimately voted down, but Pat Miguel Tomaino, director of socially responsible investing at Zevin, said the firm planned to work with Google employees to resubmit it for the 2019 shareholder meeting.

“Workers are looking at who holds power and where changes can be made,” said Yana Calou, an engagement manager at Coworker.org, an organization that allows colleagues to start campaigns together. “Workers are shareholders themselves, and risks to workers and users are often risks to shareholders, so there is a natural alliance of shared interests.”

Amazon declined to comment on its employees’ advocacy, but it said it was taking steps to address climate change.

“We have set a goal to power our global infrastructure with 100 percent renewable energy and are investing in renewable energy and energy efficiency innovations,” said Kara Hurst, director of worldwide sustainability at Amazon. The company, based in Seattle, has installed solar energy systems at 25 of its fulfillment centers and has streamlined its packing process to reduce its use of packing materials, she added.

Google declined to comment on its employees’ participation in shareholder proposals.

The moves are part of a broad activist stirring by tech workers this year. Employees at Amazon, Microsoft, Salesforce and Google have publicly objected to who was buying their products and to how certain technologies — such as facial recognition and artificial intelligence — would be used. Last month, about 20,000 Google employees staged a walkout because the company had richly paid executives who had been credibly accused of sexual harassment, leading the company to apologize and end forced arbitration in such cases.

Shareholder proposals have in the past been used largely by activist investment firms and others to advocate for changes.

“It’s fairly unusual to see this, where employees are taking a stand in regard to the company they’re working for,” said Natasha Lamb, a managing partner at Arjuna Capital, a wealth-management fund that focuses on climate issues.

Tech employees, more than in many other industries, have a ready-made way to become activist shareholders because of how they are paid. Google, Facebook, Apple and tech startups such as Airbnb have all made stock a component of compensation. At privately held companies, tech workers often get stock options, which give them the option to buy shares at a set price. Publicly traded companies tend to grant restricted stock options that automatically transfer shares to employees over a period of time.

“Because so much value is being created, or we hope is going to be created, it’s appealing to employees to receive some potential part of that pop or growth in value,” said Mary Russell, a lawyer and founder of Stock Option Counsel, a legal firm in Palo Alto that advises tech employees on their compensation. “The culture of the companies is that we need to do this to incentivize people to build the value of the company.”

But by paying employees this way, tech companies open themselves up to this kind of shareholder advocacy, she said. “They are setting themselves up to have quite a large group of stockholders who would of course, like any other stockholder, have the right to bring forward a shareholder proposal,” Russell said.

Employee shareholder proposals may ultimately not be effective since shareholder-led proposals are often shot down. And because tech founders often possess a large chunk of the shares in their companies — Jeff Bezos, Amazon’s founder and its largest shareholder, owns 16 percent of the company; Google founders Larry Page and Sergey Brin have about 51 percent of voting shares in Alphabet — the proposals have little chance of passing without founder support.

Tech employees said it was worth taking that risk. Shareholder proposals often gain attention because they are distributed to stockholders and are included in annual proxy statements, the employees say, and they give workers a way to raise their grievances directly to the board, rather than just to managers.

“Banding together with other shareholders amplifies my voice and makes all of our voices more powerful,” said Pan of Amazon.

At Amazon, white-collar employees previously brought up issues by speaking at companywide meetings or using internal petitions, while its warehouse workers have pursued labor organizing. In June, for example, employees petitioned the company to stop selling facial-recognition software to law enforcement agencies because they believed the technology should not be used for surveillance. The company has not stopped the practice.

The climate change shareholder proposal grew out of discussions among employees who had noticed other tech companies unveiling plans to address it. Since 2016, for instance, Google has issued environmental reports about its response to climate change.

“It’s important to make change and work for change wherever you happen to be, and I happen to be an employee at Amazon,” said Emily Cunningham, a user experience designer who is backing the climate change proposal and who has received Amazon shares as part of her compensation.

She said it was important for employees to publicly demand a plan. “It’s affecting the public, it’s affecting business,” she said.

Kate Conger is a New York Times writer.



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