A little bit of background that might be helpful--
Shareholders that meet pretty minimal criteria are eligible to include a proposal on the proxy statement and to be voted on at a company's annual meeting. As part of this, the shareholder or a representative must be present at the annual meeting and gets a few minutes to stand up and present their proposal.
In order to avoid this becoming a platform for every special interest group to gain an audience for their pet cause, the SEC has a list of criteria that proposals must meet. If the company believes that the proposal does not meet these criteria, they can petition the SEC for an exclusion, which if granted, lets the company ignore the proposal: https://www.law.cornell.edu/cfr/text/17/240.14a-8
Most shareholder proposals have no hope of passing and are a tool to raise awareness and get publicity for an issue. My guess is that this proposal has zero chance of passing, but that Amazon both wanted to exclude the proposal 1) because they want to exclude all shareholder proposals as a matter of course and 2) that they do not want to give this issue publicity.
That does make it feel like they want the benefits of being a publicly traded company without being held accountable by the public. And hey, I get it - I hate being held accountable for things. But I hope Amazon loses and it at least goes to vote. Surveillance is a serious public concern and we should have an actual debate about it, not stifle discussion.
> 2) that they do not want to give this issue publicity.
Well, that worked quite well.
I'd think that, as a rule, you can't rely on rejection as a mechanism for preventing something from getting publicity. Someone savvy can use that as a fuel for publicity. You'd have to destroy both the message and the messenger.. and also any onlookers.
According to correspondence posted on the SEC website, Amazon had sought the regulator’s permission to skip the proposals as being insignificant to its business, among other things, but was turned down on March 28.
Amazon then took the unusual step of asking for a reconsideration of that decision, but was again rebuffed in a April 3 letter from the agency.
I think if you feel the need to ask again, because you really don't want to let them vote on it, that works against the idea that it's insignificant to your business...
To me, it is a perfectly coherent argument that the topic is insignificant to your business, but that the associated politicking at your meeting might be disruptive (particularly if you expect it to be based on inaccurate information).
We don’t know if Amazon is honestly arguing from that position, or being dishonest as you imply.
It doesn't take a rocket scientist to figure out that a business who's biggest customers are the general public (amazon.com) and techies (AWS) stands to lose a heck of a lot if it develops a brand image as big brother's right hand. Then there's the whole politics/regulation situation, do you really want to risk becoming the poster child for why the tech giants should be broken up? Amazon's facial recognition business is minuscule, why wouldn't they kill it to save face?
That would ignore the potential it represents. Miniscule today. Amazon already dogfoods this product to handle verification of employee badges so you know the person swiping in is actually the person the badge belongs to. It's a real-time two factor authentication. Security is the foot in the door. On the surface that is not a terrible application.
>>do you really want to risk becoming the poster child for why the tech giants should be broken up?
Having a national government recognize you as a market-dominating behemoth? As the de facto market leader? If you believe that breakup isn't possible, that government recognition could be a marketing plus.
This is as good a time as ever to point out that it’s a misconception that companies are somehow legally bound to maximize shareholder value at all costs.
Only some juridiction actually have any law to (broadly) that effect. In practice, corporate officers have extremely wide latitude to decide what’s in the long-term interest of the company. That’s why companies can support charities, or not engage in warfare, or innovate in recycling, or taking the lead in privacy, or leave China due to censorship without any legal risk. One can argue that such efforts are in the shareholders‘ interest for PR reasons, but then one has essentially given up the argument, because anything can be framed as an excersize in PR. I have also witnessed countless acts of charity that never became public, such as donating leftover goods or keeping employees in personal crises on the payroll.
The only successful challenge along this line of argumentation I am aware of is Craigslist, and that required the founder to explicitly state their intentions to harm the company for rather esthetic considerations.
A shareholder-above-anything philosophy is also just not good policy. While capitalism has been a stellar success in harnessing selfishness for the common good, that is not evidence to suggest attempts to go beyond-and-above what’s legally required are actively harmful. Capitalism works well because bottom-up decision-making works best. Centrally (top-down) enforcing selfishness is bound to be just as detrimental as Moscow deciding what to plant this spring.
>The only successful challenge along this line of argumentation I am aware of is Craigslist, and that required the founder to explicitly state their intentions to harm the company for rather esthetic considerations.
The original case that is usually cited about this "maximize shareholder value at all costs" concept was Dodge v. Ford Motor Co, in which the argument was that Ford was trying to turn the company, at least temporarily, into a non-profit, and avoid giving any profits to shareholders, arguably in order to make the positions of significant minority shareholders (eg, the Dodges) worthless and deprive them of capital to start a competing company. There's a significant difference between maximizing shareholder value at all costs, and intentionally trying to obliterate shareholder value in order to harm the shareholders.
Yes, we would be better off if this misconception went away! I’d also add that the courts would generally be a bad mechanism for deciding all but the most egregious breaches of shareholder trust -- embezzlement and such -- due to the subjective nature. If shareholders merely believe that firm leadership’s decisions are bad for the company, they can reflect that in their annual votes.
While I agree with much of what you said, I don't think we can drop the notion that PR related activity is in shareholders' best interest and use of that ambiguity of motive as a basis that corporations aren't typically acting in their shareholder's best interests. We can look at historical evidence to see how PR activity is typically used in cases we have evidence (the tobacco industry comes to mind, there's many more).
While as an exercise, measuring intention is nearly impossible since determining motive is highly subjective, unless we can read minds (or internal emails/paper trials which are often guarded or intentionally avoided), we can at least look at public evidence and trends that we're aware of.
In today's economy, perceived value reigns supreme over functional and monetary value, and utility takes a back seat. Manipulating perception is highly impactful on most fronts of increasing revenue. Advertising, marketing, branding, the amount of psychology utilized, data mining and tracking (for targeted marketing), etc.--most all of this effort is about manipulating perceived value to consumers by painting an idealized image of a product/service (propaganda)--and it works.
Part of that perceived value manipulation is also painting a picture to the public that your company is "great." I've taken quite a few marketing surveys and you'll find quite a few questions about if you think a company is "good" or "bad." What your opinions are about the company (your perception), very emotionally tied questions.
If you look at historical evidence, you'll see misinformation campaigns everywhere: from the tobacco industry to bottling industries to fossil fuel industries to the lead industries.... all these sort of campaigns have been about shifting public perception in the interest of the business, and therefore, the shareholders. It's not in societies interest (unless you support social darwinism) that we have rampant lung cancer or other cancers caused by lead contact. It's not in the world or societies interest that we pretend global warming isn't an issue when the scientific consensus, the method leading to humanities greatest leaps and discoveries, tells us otherwise.
PR activity exists almost for the sole purpose of keeping the general public and your consumers happy (they also provide product/service information, when it's in their business interest). While not all PR activites are as calculated, most all efforts are to protect and foster growth of a business, and therefore most activity is for the shareholders. If a PR group's activity or business marketing campaign does the opposite and harms revenue, you'll find a lot of those people will lose their jobs. That's quite telling of the motive, at least for me.
>Civil liberties groups have raised concerns including findings by researchers that Amazon’s technology struggles more than some peers’ to identify the gender of individuals with darker skin, prompting fears of unjust arrests. Amazon has defended its work and said all users must follow the law.
am i missing something or is that last line really weirdly phrased?
I cannot see this product being more than a rounding error in Amazon‘s revenue, ever. In such a light, I am surprised they keep at it despite the bad PR it has already caused.
Maybe they have dug in for purely emotional reasons now, and need some shareholders to set them straight. Or maybe there even are enough shareholders that value behaving ethically more than money. There’s no law of either governments, physics, or human behavior that prohibits that.
I guess there is a tradition of deference to corporate leadership, especially among institutional investors. But there have been cracks in that consensus, with for example Blackrock (the largest of them) making more noises wrt such issues (trade in weapons, climate change, etc).
As a matter of principle, most public companies object against all shareholder ballot initiatives, and then recommend against them in the proxy statement. It’s just generally believed to be poor practice to let annual meetings turn into a general election on how to run the company.
So much noise for a dog of a product. Amazon's FR is nowhere in the hierarchy of respected facial recognition providers, and their expense it one of the highest. They are a non-player in the industry, and really only exist in the industry in the general consumers eyes only. If a potential client mentions Amazon's FR, we know we're dealing with a complete outsider. (FR lead developer here of a real product in this space.)
[+] [-] k2enemy|7 years ago|reply
Shareholders that meet pretty minimal criteria are eligible to include a proposal on the proxy statement and to be voted on at a company's annual meeting. As part of this, the shareholder or a representative must be present at the annual meeting and gets a few minutes to stand up and present their proposal.
In order to avoid this becoming a platform for every special interest group to gain an audience for their pet cause, the SEC has a list of criteria that proposals must meet. If the company believes that the proposal does not meet these criteria, they can petition the SEC for an exclusion, which if granted, lets the company ignore the proposal: https://www.law.cornell.edu/cfr/text/17/240.14a-8
Most shareholder proposals have no hope of passing and are a tool to raise awareness and get publicity for an issue. My guess is that this proposal has zero chance of passing, but that Amazon both wanted to exclude the proposal 1) because they want to exclude all shareholder proposals as a matter of course and 2) that they do not want to give this issue publicity.
[+] [-] TaylorAlexander|7 years ago|reply
[+] [-] mushufasa|7 years ago|reply
Even though this amazon resolution may make the proxy ballot, most shareholders don't vote. Check out this online petition that makes it easier: https://www.yourstake.org/ask/amazoncom-inc-facial-recogniti...
[+] [-] mygo|7 years ago|reply
Well, that worked quite well.
I'd think that, as a rule, you can't rely on rejection as a mechanism for preventing something from getting publicity. Someone savvy can use that as a fuel for publicity. You'd have to destroy both the message and the messenger.. and also any onlookers.
[+] [-] kbenson|7 years ago|reply
Amazon then took the unusual step of asking for a reconsideration of that decision, but was again rebuffed in a April 3 letter from the agency.
I think if you feel the need to ask again, because you really don't want to let them vote on it, that works against the idea that it's insignificant to your business...
[+] [-] FakeComments|7 years ago|reply
We don’t know if Amazon is honestly arguing from that position, or being dishonest as you imply.
[+] [-] dsfyu404ed|7 years ago|reply
[+] [-] angstrom|7 years ago|reply
[+] [-] sandworm101|7 years ago|reply
Having a national government recognize you as a market-dominating behemoth? As the de facto market leader? If you believe that breakup isn't possible, that government recognition could be a marketing plus.
[+] [-] chrisweekly|7 years ago|reply
[+] [-] matt4077|7 years ago|reply
Only some juridiction actually have any law to (broadly) that effect. In practice, corporate officers have extremely wide latitude to decide what’s in the long-term interest of the company. That’s why companies can support charities, or not engage in warfare, or innovate in recycling, or taking the lead in privacy, or leave China due to censorship without any legal risk. One can argue that such efforts are in the shareholders‘ interest for PR reasons, but then one has essentially given up the argument, because anything can be framed as an excersize in PR. I have also witnessed countless acts of charity that never became public, such as donating leftover goods or keeping employees in personal crises on the payroll.
The only successful challenge along this line of argumentation I am aware of is Craigslist, and that required the founder to explicitly state their intentions to harm the company for rather esthetic considerations.
A shareholder-above-anything philosophy is also just not good policy. While capitalism has been a stellar success in harnessing selfishness for the common good, that is not evidence to suggest attempts to go beyond-and-above what’s legally required are actively harmful. Capitalism works well because bottom-up decision-making works best. Centrally (top-down) enforcing selfishness is bound to be just as detrimental as Moscow deciding what to plant this spring.
[+] [-] cge|7 years ago|reply
The original case that is usually cited about this "maximize shareholder value at all costs" concept was Dodge v. Ford Motor Co, in which the argument was that Ford was trying to turn the company, at least temporarily, into a non-profit, and avoid giving any profits to shareholders, arguably in order to make the positions of significant minority shareholders (eg, the Dodges) worthless and deprive them of capital to start a competing company. There's a significant difference between maximizing shareholder value at all costs, and intentionally trying to obliterate shareholder value in order to harm the shareholders.
[+] [-] paulgb|7 years ago|reply
[+] [-] craftyguy|7 years ago|reply
[+] [-] Frost1x|7 years ago|reply
While as an exercise, measuring intention is nearly impossible since determining motive is highly subjective, unless we can read minds (or internal emails/paper trials which are often guarded or intentionally avoided), we can at least look at public evidence and trends that we're aware of.
In today's economy, perceived value reigns supreme over functional and monetary value, and utility takes a back seat. Manipulating perception is highly impactful on most fronts of increasing revenue. Advertising, marketing, branding, the amount of psychology utilized, data mining and tracking (for targeted marketing), etc.--most all of this effort is about manipulating perceived value to consumers by painting an idealized image of a product/service (propaganda)--and it works.
Part of that perceived value manipulation is also painting a picture to the public that your company is "great." I've taken quite a few marketing surveys and you'll find quite a few questions about if you think a company is "good" or "bad." What your opinions are about the company (your perception), very emotionally tied questions.
If you look at historical evidence, you'll see misinformation campaigns everywhere: from the tobacco industry to bottling industries to fossil fuel industries to the lead industries.... all these sort of campaigns have been about shifting public perception in the interest of the business, and therefore, the shareholders. It's not in societies interest (unless you support social darwinism) that we have rampant lung cancer or other cancers caused by lead contact. It's not in the world or societies interest that we pretend global warming isn't an issue when the scientific consensus, the method leading to humanities greatest leaps and discoveries, tells us otherwise.
PR activity exists almost for the sole purpose of keeping the general public and your consumers happy (they also provide product/service information, when it's in their business interest). While not all PR activites are as calculated, most all efforts are to protect and foster growth of a business, and therefore most activity is for the shareholders. If a PR group's activity or business marketing campaign does the opposite and harms revenue, you'll find a lot of those people will lose their jobs. That's quite telling of the motive, at least for me.
[+] [-] kkarakk|7 years ago|reply
am i missing something or is that last line really weirdly phrased?
[+] [-] JulianMorrison|7 years ago|reply
[+] [-] eropple|7 years ago|reply
[+] [-] tjpnz|7 years ago|reply
[+] [-] matt4077|7 years ago|reply
Maybe they have dug in for purely emotional reasons now, and need some shareholders to set them straight. Or maybe there even are enough shareholders that value behaving ethically more than money. There’s no law of either governments, physics, or human behavior that prohibits that.
I guess there is a tradition of deference to corporate leadership, especially among institutional investors. But there have been cracks in that consensus, with for example Blackrock (the largest of them) making more noises wrt such issues (trade in weapons, climate change, etc).
[+] [-] ryacko|7 years ago|reply
www.guardian.co.uk/commentisfree/cifamerica/2012/mar/01/shareholder-crusade-prison-rape
https://www.sec.gov/Archives/edgar/data/1070985/000089968112...
[+] [-] URSpider94|7 years ago|reply
[+] [-] disiplus|7 years ago|reply
[+] [-] bsenftner|7 years ago|reply
[+] [-] ojilles|7 years ago|reply
"FR lead developer here of a real product in this space, likely to be acquired over the next few years, possibly by Amazon."
There's no telling what small thing today will look like in a few years down the road.