AT&T has come under fire from four public pension funds in New York City, accused of unfairly blocking a shareholder vote aimed at requiring the company to clarify its employee demographics, specifically regarding race, ethnicity, and gender among its 133,000 personnel.
The complaint, filed in federal court in Manhattan, suggests that AT&T pointed to a policy change from the U.S. Securities and Exchange Commission (SEC) in November. This change supposedly permits companies to exclude certain shareholder proposals if they claim to have a “reasonable basis” for doing so.
The pension funds argued that the SEC’s regulations do not shield AT&T from being required to address the proposal at its upcoming annual meeting in 2026. Furthermore, they claim that failing to include it could result in “irreparable” harm. The funds are seeking to ensure that AT&T cannot solicit shareholder proxies aimed at sidestepping their proposal.
According to the complaint, AT&T typically submits an annual diversity report to the U.S. Equal Employment Opportunity Commission. While the company shared a diversity breakdown from 2021 to 2023, it unexpectedly canceled the 2024 report without providing any reasons.
As of now, AT&T has not commented on the matter, and a representative for New York City Comptroller Mark Levine did not respond promptly to similar inquiries.
The plaintiffs include entities such as the New York City Employees Retirement System along with funds that represent police, education workers, and teachers.
Each year, numerous companies seek assurances from the SEC’s Division of Corporate Finance to avoid enforcement actions when they decide to exclude shareholder proposals from voting. Historically, regulators have granted such permission about half the time.
SEC Chairman Paul Atkins noted that many shareholder proposals may not hold validity under Delaware law, which is where AT&T and roughly two-thirds of Fortune 500 firms are based.
In light of a crackdown initiated by former President Donald Trump aimed at diversity, equity, and inclusion efforts, many corporations have since shifted their focus away from these initiatives.
