Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
Indianapolis-based health Elevance Health’s board is recommending its investors reject a shareholder proposal that asks the health insurance company to provide a report and metrics on the effectiveness of its diversity, equity and inclusion efforts.
John Chevedden, a leading activist-investor, and the Seattle-based Laird Norton Family Foundation informed Elevance that they plan to introduce the proposal for a shareholder vote at the company’s annual meeting on May 14, according to Elevance’s proxy statement.
In recommending a vote against the proposal, the Elevance board of directors said, “we already provide transparent and regular disclosures necessary to assess our workforce composition, practices and policies,” according to the proxy filing.
In its response to the proposal, Elevance also touted that its “workforce embodies a multitude of dimensions.”
The company cited that 77% of its U.S. workforce is female and 50% is racially or ethnically diverse. Elevance also said 70% of its directors are diverse, based on gender, race and/or ethnicity.
But the shareholder proposal stated that, “Elevance has not yet shared sufficient hiring, promotion, or retention data to assess whether it will be able to build, utilize, and maintain successful, diverse management teams.”
In the Elevance proxy, Chevedden and the Laird Norton Family Foundation cited studies that show that companies with strong diversity have outperformed peers in profitability or financial performance. The proposal then listed companies that the activist-shareholders said have committed to release more diversity data than Elevance, including American Express, Bank of America, Baxter International and CVS Health.
“Companies need to protect their workplace against discrimination; and investors must have meaningful data to monitor their effectiveness in doing so,” the proposal stated. “Unfortunately, studies have also shown that diverse employees face barriers in recruitment, hiring, and promotion.”
In its proxy filing, Elevance said the additional DEI report was unnecessary because “our existing transparent and regular disclosures of our workforce composition, practices and policies already provide meaningful information to investors.”
The Trump administration has targeted diversity, equity and inclusion, or DEI, programs at government agencies, universities and other organizations through executive orders, sparking national debate and controversy. Likewise, DEI is a hot topic in corporate governance.
While the Elevance proposal appears to be pro-DEI, a recent report from the Harvard Law School Forum on Corporate Governance analysis found that anti-DEI shareholder proposals have surpassed pro-DEI measures early this proxy season.
Pro-DEI proposals for 2025 appear to be on pace to finish below the 2024 proxy season totals, according to Harvard, while anti-DEI proposals for 2025 have already surpassed the 2024 proxy season totals. The report is based on proxy data through March 5.
Elevance faces a high-profile activist-investor in Chevedden.
A 2021 article in the South California Law Review labeled him an effective corporate gadfly—not a highly connected executive, but a “former Hughes Aircraft employee (who) now walks or takes public transportation to shareholder meetings to save money.”
According to the article by Kobi Kastiel and Yaron Nili, Chevedden became an activist-shareholder after being laid off from an aerospace company, then a part of General Motors. He filed his first shareholder proposal in 1994 asking GM to reveal more information about its employment practices.
Please enable JavaScript to view this content.
nothing more hilarious than asking companies to provide data to back up their claims.
DEI is so awesome it must be imposed by activists and certainly cannot be expected to produce concrete results.
Research contradicts your assertion, 21 R. But don’t let facts get in the way of your racism and misogyny.