Shareholders are using their influence to force companies like PepsiCo to abandon the politicized stances they took during the 2020 moral panic.
At the height of the Covid pandemic and America’s so-called racial reckoning, activist groups infiltrated major corporations and pressured executives to promote niche, left-wing social causes. But in the years since, consumers and shareholders sick of having progressive dogma forced on them have begun to exert pressure of their own.
Enter David Bahnsen, a financial adviser and NR regular who has worked to reel companies back in from the brink of madness on a host of topics, from diversity quotas in hiring to discriminatory advertising.
Bahnsen, in his capacity as an adviser and a shareholder himself, has leaned into the authority that shareholders have to help keep major companies focused on what they’re supposed to be focused on: financial returns, as opposed to social justice issues that are not core to their business, says Jerry Bowyer, who leads Bowyer Research.
Bowyer Research is a macroeconomic consulting firm that has increasingly taken on the role of helping shareholders “try to push companies back to politically and culturally neutral” through corporate engagement, proxy voting, and corporate ballots.
“The thing we’re countering was a crazy social mania which came up very quickly and formed a bubble,” Bowyer said, pointing to the way corporations “fell all over themselves” to embrace unpopular policies promoted by activists.
After a few years of corporate backlash (think: Bud Light, Disney, Target), coupled with the Supreme Court ruling on affirmative action that made clear that reverse discrimination is discrimination, companies have begun to wise up.
“It’s become obvious to companies that they probably shouldn’t have made these commitments and these political gestures and this pandering in the first place,” he said. “So they were ready to get back to sanity because they saw what they had done was not in their interest or shareholders’ interest.”
That’s where Bahnsen comes in to give companies a shove in the right direction.
One of his biggest wins, undertaken with support from Alliance Defending Freedom and Bowyer Research, was a victory three years in the making with PepsiCo.
Bahnsen filed a shareholder resolution calling on the company to account for its “discriminatory” ad buying under the Global Alliance for Responsible Media (GARM), a left-wing group formed in 2019 to promote “digital safety” that blacklisted several mainstream conservative outlets.
The group was purportedly committed to fighting “disinformation,” “misinformation,” and “hateful speech” by trying to put media outlets out of business if they refused to toe the party line. GARM’s censors relied on partisan watchdogs like the Global Disinformation Index and NewsGuard to identify guilty media outlets, typically of the conservative variety, and then pressured advertisers not to do business with those outlets.
Bowyer Research described GARM as a “cartel-like organization that operated to direct advertising dollars away from conservative media in the name of curbing ‘hate speech.’” And a House Judiciary Report on the group claimed the extent to which GARM organized its trade association and coordinated “actions that rob consumers of choices is likely illegal under antitrust laws.”
PepsiCo ultimately agreed to adopt a policy of viewpoint neutrality in choosing where to place its ads in exchange for Bahnsen withdrawing his resolution from the ballot.
“PepsiCo’s media-buying and content policies are audience-centric, aiming to reach all consumers authentically, and are viewpoint neutral with respect to political or religious status or views,” said the statement on the company’s website.
Bahnsen celebrated the company’s decision at the time as a “huge win with a great team working for the common good.”
Meanwhile, GARM shuttered last year after Elon Musk filed a federal antitrust lawsuit against the group accusing it of illegally conspiring to demonetize X.
Before PepsiCo committed to adopting a neutral viewpoint in advertising, Bahnsen had spent years pressuring the company to roll back corporate politicization.
In 2022, he spearheaded a proposal urging the company to consider the risks of opining on non-core political issues and refocus on fiduciary responsibility. That proposal was blocked from the ballot.
Still, Bahnsen and Bowyer Research were encouraged when they held a meeting with investor relations that year where they mentioned the risks of politicizing the brand, and representatives for PepsiCo agreed, saying they’d “been watching what’s been going on with Disney.”
At the company’s 2023 annual meeting, Bowyer Research asked PepsiCo whether “the board and managers of the company [are] aware of the downsides, the risk of backlash and brand damage which can come from politicization?” Their question went unanswered.
“Yet, this new development from PepsiCo is a welcome result of engagement that began three years ago — meeting, placing proposals, reinforcing concerns, more proposals, and now a stated commitment to political neutrality,” Bowyer Research consultants said at the time.
Alliance Defending Freedom has a viewpoint diversity business index that rates companies based upon their respect for free speech and religious freedom. ADF relies upon the index to choose which companies to engage through the shareholder proxy process on issues that are scored on the index, ranging from censorship issues to debanking, DEI to ESG.
This year, ADF has helped shareholders submit 73 resolutions to some of the biggest companies in the world addressing all of these different issues, says ADF Senior Vice President of Corporate Engagement and Senior Counsel Jeremy Tedesco.
Pepsi was one of ADF’s major wins, particularly because it led four other companies to follow suit and adopt similar neutral viewpoint policies: Johnson & Johnson, IBM, MasterCard, and Comcast. On DEI specifically, ADF has been involved in submitting resolutions to 20 different companies over the last several years; in 14 of those cases the companies responded in some way favorably to ADF’s efforts.
“There’s a lot of other pressures on DEI right now that are really helping,” Tedesco said, pointing to President Trump’s executive orders and the work of others on the issue, including conservative activist Robby Starbuck.
One of the biggest shareholder-led victories this year, in which both the Bahnsen Group and ADF were involved, was a policy change at JPMorgan Chase, which adopted into its code of conduct protections against religious and political viewpoint discrimination in relation to customers, employees, and business partners.
JPMorgan Chase had long been accused of debanking customers for religious or political reasons.
“That’s the kind of real change . . . that we’re trying to drive through the work we’re doing,” he said.
Bahnsen and Bowyer Research have notched big wins with several companies by running this strategy of shareholder engagement.
The groups asked Lockheed Martin to discontinue its DEI restrictions for suppliers, to great success.
The Bahnsen Group filed a shareholder proposal with the company regarding its use of DEI practices in hiring and recruitment. Bahnsen pulled his shareholder resolution after Lockheed Martin agreed to his requests without having to go to a vote.
Lockheed CEO James Taiclet had signed on to the “Catalyst’s Champions for Change” pledge, which included the use of reported race and gender demographic targets in its leadership makeup.
Bowyer Research asked Lockheed about whether the company’s use of diversity metrics involves the use of quotas and whether it’ still a member of the Catalyst group. Lockheed Martin representatives agreed to look into it.
The consultants also asked about Lockheed’s lack of faith-based employee resource groups, leading the company to pause its use of employee resource groups altogether.
Lockheed Martin representatives also told Bowyer Research they appreciated a notice it filed with the SEC one year earlier defending the company’s partnership with the Israel Defense Forces as activist investors demanded that the company drop its long-standing partnership with the Jewish state.
As for the involvement of outside groups in pressuring companies to adopt liberal policies, Tedesco said it’s “kind of ubiquitous.”
He pointed to social media platforms and tech companies that have adopted the Southern Poverty Law Center’s recommended terms of service, which prohibit so-called hate speech or hateful conduct.
SPLC and other left-wing groups then use those terms to “weaponize their own blacklists of people right-of-center who they don’t like and disagree with to get them kicked off of platforms or get them deprived of services.”
“We’re doing the work we’re doing to try to fortify businesses against these external pressures because of those external pressures,” Tedesco said.
By contrast, conservative shareholders have stepped in to say the obvious: that companies should provide services to everybody, even people they disagree with, on equal terms.
Facing pressure from the Bahnsen group, IBM recently agreed to end its participation in the Human Rights Campaign survey, which, by Bahnsen’s description “demands self-destructive brand decisions (see Bud Light) and paying for puberty blockers for kids.”
IBM has also agreed to stop pressuring employees to use pronoun declarations and shuttered its DEI department.
But with IBM, there’s still work to be done, says Bahnsen, particularly on its employee affinity group program and employee match program in charitable giving, both of which suffer from religious discrimination issues.
And in March, Bahnsen submitted a shareholder proposal with Gilead Sciences, a biotech/pharmaceutical company that has done groundbreaking work in HIV treatment and oncology, asking the company to conduct an evaluation assessing how the company’s DEI requirements for contractors impact its risks related to discrimination against individuals based on race, color, religion, sex, national origin, or political views.
Bahnsen then addressed the company’s annual shareholder meeting earlier this month.
“The inherently political nature of Gilead’s commitments to diversity, equity, and inclusion is clear,” Bahnsen said in his speech. “The question is: Does Gilead’s focus on supplier diversity muddle its fiduciary duty? Gilead’s corporate partnerships require it to incorporate diversity programs into its supply chains, and Gilead’s own policy answer is that a broad and inclusive supplier network supports socioeconomic inclusion across our society, but that doesn’t answer the question — it begs the question around those very diversity commitments we are asking about,” he said.
“Gilead’s current policy suggests it prioritizes the diversity of its supplies over a meritocratic approach that enhances shareholder return. If this is not the case then the proposal is an excellent opportunity to correct the record,” he said. “If it is the case, we want that transparently stated so that we can aggressively make the argument that any ethos that minimizes achievement, productivity, and true value creation is deeply out of bounds for a company like Gilead.”
Looking toward the future, Bowyer urges conservatives to realize that the battle is “not over, not even close.”
“We just have a reversal of momentum,” he said. “This is not the end. This is not the beginning of the end. This is the end of the beginning.”