Outcome: The proposal was withdrawn by Trillium for technical reasons
Resolved: That the shareholders of Marathon Petroleum Corporation (“Company”) hereby request that the Company provide a report, updated semiannually, disclosing the Company’s:
1. Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum.
2. Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including:
a. The identity of the recipient as well as the amount paid to each; and
b. The title(s) of the person(s) in the Company responsible for decision-making.
The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website.
As long-term shareholders of Marathon, we support transparency and accountability in corporate spending on political activities. These include any activity considered intervention in a political campaign under the Internal Revenue Code, such as direct and indirect political contributions to candidates, political parties, or political organizations; independent expenditures; or electioneering communications on behalf of federal, state or local candidates.
Disclosure is in the best interest of the Company and its shareholders and critical for compliance with federal ethics laws. Moreover, the Supreme Court’s Citizens United decision recognized the importance of political spending disclosure for shareholders when it said, “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.” Gaps in transparency and accountability may expose the Company to reputational and business risks that could threaten long-term shareholder value. This is particularly true as state and federal policy on energy and climate change are actively debated.
We note that while Marathon provides a list of trade associations and the aggregate amount that is attributable to federal, state and grassroots lobbying, it does not break out payments which are non-deductible under Section 162(e) of the Internal Revenue Code by trade association. Peers Valero and Tesoro do provide this information.
Marathon received 62 out of 100 in the 2015 CPA-Zicklin Index of Corporate Political Accountability and Disclosure lagging behind peers Valero (70), Tesoro (84) and Phillips 66 (73). According to OpenSecrets.org, Marathon made $1,424,050 in contributions in 2014, with peers spending less: Valero $873,600; Phillips 66 $363,615; and Tesoro $332,690. But without full disclosure these numbers are incomplete.
We ask the Company to disclose all of its political spending, including more detailed information about payments to trade associations and other tax exempt organizations used for political purposes. This would bring our Company in line with a growing number of leading energy companies that support transparency and present this information on their websites, including Schulmberger, Noble Energy and ConocoPhillips.