Shareholders are increasingly showing signs of DEI fatigue as political heat around the issue intensifies across corporate America.

Both champions and critics of diversity, equity, and inclusion policies are again pushing companies this annual meeting season to either bolster or diminish their DEI policies via shareholder proposals. But so far, none of these proposals have garnered support from investors at Apple (APPL), Costco (COST), and John Deere (DE). 

And that's not expected to change as more votes are tabulated at more company shareholder meetings in the coming weeks and months, according to experts who follow these votes.

"I don't expect this year that we will see many, if any, get majority support," said Elizabeth Bieber, head counsel for shareholder engagement and activism defense at Freshfields.

"And I would expect that, when we look at the numbers, year over year, that we actually see waning support, regardless of which ideological side the proposal tends to fall on."

As of the end of February, a total of 21 "anti-DEI" proposals and 16 "pro-DEI" proposals were set for a vote this year among publicly traded companies included in the Russell 3000, according to the voting recommendation firm ISS-Corporate.

ISS-Corporate expects the total number of DEI proposals to grow before the end of the voting season in April, although it's too early to know for sure. Last year, Russell 3000 company investors forced votes on 34 total proposals opposed to DEI initiatives and 77 in favor of them.

This year’s early surge in anti-DEI measures could be a signal that opposition proposals are on the rise, Bieber said. 

It could also lead to a rise in dueling DEI proposals going to a vote within the same company, as happened in February at John Deere (DE). Deere shareholders voted down both pro-DEI and anti-DEI measures.

"DEI, as of last year, is certainly one issue where companies were receiving [proposals] on both ends of the ideological spectrum," Bieber said

So far, neither pro- nor anti-oriented measures have gained much majority support. In fact, Bieber said, support levels among S&P 500 companies dropped for both pro- and anti-DEI proposals over the last couple of proxy seasons.

Fordham University School of Law professor Atinuke Adediran said that in the last three years anti-DEI proposals surpassed those considered pro-DEI but "it’s coming from all sides.” 

REUTERS / Reuters

Adediran — who researches reputation, financial, and social risks related to corporate race policies — expects that “most anti-DEI proposals are likely to be turned down, as they were before."

Social proposals gained single-digit levels of shareholder support in 2024, and none of the measures passed — even though there was a larger volume of critical proposals.

Institutional investors may be driving the losing outcomes on all sides of DEI, according to Bieber and her colleague Pam Marcogliese, who oversees US transactions at Freshfields. Major investors, they said, tend to shy away from going on record supporting ideological causes of any stripe.

One recent company where this dynamic played out in plain sight was Deere, which is among the major US companies in the last year to roll back diversity, equity, and inclusion initiatives.

Even after that rollback was announced, shareholders were asked to vote on ideologically opposed proposals on the same ballot.

One, a pro-DEI proposal, didn’t fetch enough support but would have required the company's board to oversee a civil rights audit analyzing bias and discrimination risks across the company’s policies, practices, products, and services. The proposal received support from 29.2% of voting shareholders.

An anti-DEI proposal from the conservative think tank National Legal and Policy Center would have required the company to disclose race- and gender-based hiring trends for its global workforce, in addition to its existing workforce diversity tracking.

That initiative, which gained support from just 1.3% of voting shareholders, was based on the group’s concern over discrimination against white job applicants.

The company had urged shareholders to reject the proposal.

Deere is an "equal opportunity employer committed to providing a workplace free of harassment and discrimination" and already supplies workforce diversity data, the company said in a proxy statement.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.

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