PROPOSAL IV |
POLITICAL CONTRIBUTION DISCLOSURE |
Resolved, that the shareholders of Flowers Foods Inc., (Flowers Foods or Company) hereby request that the Company provides a report,
updated semiannually, disclosing the Companys:
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1. |
Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect)
to: (a) participate or intervene in any 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.
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2. |
Monetary and non-monetary contributions and expenditures (direct and indirect)
used in the manner described in section 1 above, including: |
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a. |
The identity of the recipient as well as the amount paid to each; and, |
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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 Companys website within 12 months from the date of the annual
meeting. This proposal does not encompass lobbying spending.
Supporting Statement
As long-term shareholders of Flowers Foods, we support transparency and accountability in corporate electoral spending.
This includes any activity considered intervention in a political campaign under the Internal Revenue Code, such as direct and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering
communications on behalf of federal, state, or local candidates.
A companys reputation, value, and bottom line can be adversely impacted by spending that is
conducted blindly. The risk is especially serious when giving to trade associations, Super PACs, 527 committees, and social welfare organizations groups that routinely pass money to or spend on behalf of candidates and political
causes that a company might not otherwise wish to support.
The Conference Boards 2021 Under a Microscope report details these risks,
recommends the process suggested in this proposal, and warns a new era of stakeholder scrutiny, social media, and political polarization has propelled corporate political activityand the risks that come with itinto the spotlight.
Political activity can pose increasingly significant risks for companies, including the perception that political contributionsand other forms of activityare at odds with core company values.
Public records show Flowers Foods has contributed over $1.3 million in corporate funds since the 2010 election cycle.
(CQMoneyLine: http://moneyline.cq.com; National Institute on Money in State Politics: http://www.followthemoney.org).
This proposal asks Flowers Foods to disclose
all of its electoral spending, including payments to trade associations and other tax-exempt organizations, which may be used for electoral purposesand are otherwise undisclosed. This would bring our
Company in line with a growing number of leading companies, including Coca-Cola, General Mills, and Mondelez International, which present this information on their websites.
Without knowing the recipients of our Companys political dollars, we cannot sufficiently assess whether our Companys election-related spending aligns or
conflicts with its policies on climate change and sustainability.
We urge your support for this critical governance reform.
Board of Directors
Statement in Opposition of Proposal IV
The board of directors has thoughtfully considered this proposal and has concluded that its adoption is not in the best
interest of the company or its shareholders. Accordingly, the board of directors unanimously recommends a vote AGAINST this proposal for the following reasons.
We are committed to complying with our values, our internal practices and all applicable laws when engaging in any type of lobbying or political activity. We understand
that corporate political contributions disclosure is a topic of interest to some shareholders and a topic about which perspectives vary. Notwithstanding, the board of directors believes that the companys existing practices produce appropriate
oversight and accountability, and this proposals adoption would impose undue costs and administrative burdens on the company without corresponding benefits to our shareholders.
The board of directors believes this proposal relates to expenditures that are not significant and the extensive disclosure requested in this proposal could place the
company at a competitive disadvantage.
In fiscal 2021, the companys political contributions amounted to $1.6 million in comparison to sales of
approximately $4.3 billion. Political contributions represent an insignificant amount of our total annual expenses (less than 0.04% in fiscal 2021). The extensive disclosures mandated by this proposal are unduly burdensome when compared to the
insignificant amount spent on political contributions. Additionally, the
disclosures required by this proposal could harm the company by revealing the companys business plans and objectives. Many of the companys competitors also make political
contributions and are required to adhere to the same legally imposed disclosure requirements as we are. If the company unilaterally decides to disclose more than what is required under the law and our competitors do not follow suit, we could
potentially reveal sensitive information that would advantage our competitors and harm our business interests. The board of directors believes any disclosure requirements that go beyond those imposed by current laws should be applied to all parties
in the process, rather than the company alone.
Responsible participation in the political process is important for the company.
As a company in the highly regulated food industry, our operations are significantly impacted by the decisions of elected officials. While the company does not make
direct contributions to federal elections, it provides an opportunity for our employees to participate in the political process by joining the Flowers Foods, Inc. Political Action Committee (FloPAC). The political contributions made by
FloPAC are solely funded by the voluntary contributions of our employees. FloPAC is registered with the Federal Election Commission (FEC) and files monthly reports with the FEC. These reports are publicly available and provide an
itemization of
FLOWERS FOODS, INC. - 2022 Proxy Statement 55