NLPC argued that these goals steer the company in a politicized direction, deprioritize merit in its talent pool, and increase legal risk. The company’s board of directors opposed our proposal, as explained on pages 86-87 of its proxy statement. NLPC’s response to the board’s opposition statement was filed with the Securities and Exchange Commission last month. Presenting the proposal at the meeting was Luke Perlot, associate director of NLPC’s Corporate Integrity Project. An audio recording of his presentation can be found here, and a transcript of his three-minute remarks follows:
Good morning.
Following the Supreme Court’s landmark decision in Students for Fair Admissions v. Harvard College, corporate DEI programs have come under intense scrutiny.
Many companies – including Disney, Amazon, and Goldman Sachs – are changing or dropping their DEI programs to avoid legal, financial and reputational liability.
However, American Express continues to embed DEI metrics within its executive compensation incentives, exposing shareholders to unnecessary risks.
Amex has pledged billions towards DEI programs, and has set an explicit goal to increase spending with suppliers owned by minorities, LBGT, women, veterans, and other “underrepresented” groups.
While these DEI goals are hidden within qualitative assessment criteria, they nonetheless influence executive pay.
Legal experts warn that race or gender-focused DEI incentives risk violating Title VII of the Civil Rights Act.
Starbucks’ $28.3 million judgment in 2023 due to discriminatory firing practices underscores the significant legal dangers of continuing to implement DEI programs.
Moreover, aggressive DEI policies don’t deliver the promised benefits; instead, they often exacerbate workplace tensions and discrimination.
Research conducted by Harvard Business Review shows compulsory diversity programs can lead to defensiveness and animosity among employees, undermining team cohesion and productivity.
Additionally, Amex’s multibillion dollar DEI spending risks diverting critical resources from areas genuinely linked to shareholder value.
We advocate for merit-based policies focused on measurable business performance.
Removing DEI-related metrics from executive compensation protects shareholders and promotes an effective workforce.
Thus, we urge you to vote FOR Item 4 to eliminate discriminatory DEI goals from executive pay incentives. Thank you.
Read NLPC’s shareholder proposal for the American Express annual meeting here.
Listen to Luke Perlot’s presentation of the proposal at the meeting here.
Read NLPC’s response, filed with the SEC, to the company’s opposition to our shareholder proposal, here.
