Glenn Spencer Glenn Spencer
Senior Vice President, Employment Policy Division, U.S. Chamber of Commerce
Bill Hulse Bill Hulse
Senior Vice President, Center for Capital Markets Competitiveness, U.S. Chamber of Commerce


March 04, 2024


On March 13, Starbucks will hold its annual shareholder meeting. But not everyone involved will be enjoying the coffee. An outfit called the Strategic Organizing Center (SOC), which is backed by the Service Employees International Union (SEIU), will attempt to elect three “independent” board of directors candidates.

The SEIU campaign against Starbucks highlights a larger problem of how the Securities and Exchange Commission (SEC) has changed the rules to allow gadfly investors like the SOC to take an outsize role in serious issues facing businesses and their investors. In November 2021, the SEC finalized rules requiring that each proxy card — regardless of whether it is submitted by management or an activist investor — include the names of both the company and activist nominees. The Chamber has warned for years that universal proxy cards would “ultimately disadvantage Main Street investors by encouraging special-interest groups to conduct highly disruptive proxy fights.” 

The SOC cites what it calls “flagrant human capital mismanagement” as justification for supporting its preferred candidates. But there’s a handful of problems with the SOC’s plan that illustrate that if there’s mismanagement going on here, it’s with the SOC’s motivations. 

What the SOC calls “mismanagement” refers to the fact that Starbucks has decided not to bow down to the SEIU’s efforts to organize the company’s employees. Starbucks has determined that unionization would not be beneficial to the company, its shareholders, or its workers. As such, it has exercised its rights to contest these efforts.

This has made the SEIU and the SOC quite unhappy. So, as part of the SEIU’s multiprong pressure campaign against the coffee retailer, the SOC has decided to use the proxy system to advance its three candidates, who seem to have forced a union on Starbucks as their chief priority, regardless of the impact on the business, its workers, or its shareholders. 

Shareholders can have their own points of view, and as such can try to influence a shareholder meeting. But what makes this case particularly egregious is that the SOC holds just $16,000 worth of Starbucks stock. Even if one accepts the dubious proposition that unionizing would make the company more profitable, $16,000 is only 0.000015% of the company’s $100+ billion total market capitalization. In the meantime, the SOC admits in its proxy statement that it is spending $300,000 to run the proxy campaign. It doesn’t take a math major to calculate that their $300,000 expense is nearly 20x their $16,000 investment. As the kids say, the math isn’t mathing. 

The SEIU is also helping with the board of directors’ fight, and it cites its investments in Starbucks through its various pension funds as justification. It admits that it expects to spend a whopping $3 million on the campaign. But who is the SEIU fighting for: pensioner participants interested in Starbucks profitability so they can comfortably retire, or the policy views of organized labor? 

The proxy process should be reserved for investors interested in strengthening a public company, not extracting self-interested concessions. The SEC’s 2021 universal proxy rules are becoming a weapon for social activists to wield against public companies. It’s no wonder the number of such companies has dropped by 50% in the last 30 years. That isn’t good for the economy, investors, or workers. 

About the authors

Glenn Spencer

Glenn Spencer

Spencer oversees the Chamber’s work on immigration, retirement security, traditional labor relations, human trafficking, wage hour and worker safety issues, EEOC matters, and state labor and employment law.

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Bill Hulse

Bill Hulse

Hulse oversees the day-to-day efforts of CCMC including policy development, advocacy, and communications.

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