This proposal asks IBM to require outside directors to personally own actual shares of IBM stock (not just deferred stock units) in some meaningful amount. While the underlying concern about director skin-in-the-game alignment is legitimate in principle, IBM's existing policy already requires directors to hold IBM stock-based holdings worth eight times the equity portion of their annual retainer within five years — one of the strongest requirements among large U.S. companies. The deferred stock units (Promised Fee Shares) that count toward this requirement are economically identical to owning IBM shares — they rise and fall with the stock price, earn dividend equivalents, and cannot be sold until the director leaves the board, which actually creates stronger alignment than freely tradable shares. There is no prior-year vote history to suggest sustained shareholder concern, the filer is an individual retail investor without a track record of governance activism, and IBM's response credibly addresses the core issue.

This proposal comes from John Chevedden, a well-known individual governance activist with a strong track record of filing legitimate shareholder rights proposals, and it received 43% support at the 2024 annual meeting — a very strong signal that a substantial portion of IBM's shareholders, including major institutional investors with access to independent proxy advice, view this as a real governance concern. Under our policy, 40-50% prior-year support creates a lean-FOR default, and the company has not made any structural changes in response. The ask — allowing shareholders who together own a majority of shares to take action between annual meetings without waiting for a special meeting — is a mainstream governance right that more than half of S&P 500 companies already provide, and IBM's 25% special meeting threshold (which the proponent credibly argues is functionally unreachable at a $232 billion company) does not adequately substitute for this right.

The National Center for Public Policy Research (NCPPR) is a well-documented conservative ideological advocacy organization, not a neutral fiduciary investor — under our policy, proposals from ideological filers on either side of the political spectrum are voted against regardless of how the proposal is framed, because they serve political goals rather than shareholder interests. The framing of this proposal — invoking a White House executive order on 'woke AI' and citing concerns about 'left-leaning slant' in AI models — makes clear this is political advocacy dressed as a shareholder request, not a genuine fiduciary risk assessment. IBM also credibly demonstrates that the information sought already exists in publicly available form, including a top 95% transparency score from Stanford's Foundation Model Transparency Index.

The Heritage Foundation is a prominent conservative political advocacy organization — its proposal, submitted through Bowyer Research (a known vehicle for ideologically motivated corporate governance campaigns), is directed at IBM's LGBTQ+ healthcare and charitable policies and uses explicitly political framing referencing 'transgender activism,' the Human Rights Campaign, and the 'Good for Business Coalition.' Under our policy, proposals from ideological filers on either side of the political spectrum are voted against because they serve political advocacy goals, not the financial interests of shareholders. IBM's charitable initiatives (skills training, environmental community support, employee giving) are not financially material to IBM's business, are already disclosed in detail, and are not the kind of ordinary business decisions that shareholders should micromanage through annual meeting proposals.