For Immediate Release April 20, 2011
Contact: Julie Goodridge, NorthStar Asset Management, Inc.
Boston, Massachusetts
617-522-2635
jgoodridge@northstarasset.com

Home Depot has released their annual proxy including a resolution calling for a shareholder vote requesting that political contributions reflect Home Depot’s stated corporate values. The resolution, filed by NorthStar Asset Management, Inc. of Boston, was filed in the aftermath of Citizens United v. Federal Election Commission, the controversial Supreme Court decision in January of 2010 that removed prohibitions on corporate electioneering contributions.

NorthStar CEO, Julie Goodridge, was concerned that the type of controversy surrounding political contributions made by another big box retailer, Target, could negatively impact her holdings in Home Depot as well. “Target received tremendous negative attention following their support of the political group Minnesota Forward, which was supporting a vocally anti-gay political candidate.” The release of this proxy comes one day after a court ruling that allows LGBT protesters to picket in front of Target stores to show their dissatisfaction with the company’s continued electioneering contributions.

“Having just hired 60,000 temporary employees for their high-traffic spring season, the last thing Home Depot needs is a boycott from the LGBT community. Such a boycott, or a continuance of incongruity between stated corporate values and political giving, would deeply diminish the company’s reputation and harm shareholder value,” said Goodridge. NorthStar contends that political contributions by Home Depot that are incongruent with stated values or policy create risk to the company’s brand, reputation, and ultimately shareholder value. In the proxy statement released today, Home Depot’s management rejected shareholders’ request for an annual proxy review of and a vote on the company’s political spending.

Home Depot has a non-discrimination policy which includes protection for employees regardless of sexual orientation and gender identity and expression. A review of their 2009 political giving exposed a significant contribution to the political campaign of Bob McDonnell, the governor of Virginia, who rolled back non-discrimination protections for LGBT state workers. Home Depot is the world’s largest home improvement specialty retailer with 49 stores located in Virginia.

Julie Goodridge, CEO of NorthStar, further explained that “in asking for a shareholder vote, NorthStar is asking Home Depot to recognize shareholders as owners of the corporation, because after all, it is shareholder money that is being allocated for political purposes.”

A shareholder vote on political donations would provide a measure of accountability that is lacking under the current system. The proposal created by NorthStar specifically asks the Home Depot board of directors to include the following items annually in their proxy statement: the company’s policies on political contributions, a report on political spending for the past year, and anticipated political spending for the next year. Shareholders would then vote on whether or not they support those policies and plans. In addition, NorthStar recommended in its proposal that the proxy report also analyze whether the spending is consistent with the company’s values and whether it poses risks to the company’s brand, reputation, or shareholder value.

Home Depot challenged NorthStar’s resolution with the Securities and Exchange Commission (SEC), claiming (among other things) infringement upon the Company’s ordinary business. The SEC ruled in favor of NorthStar, affirming that resolutions which present a “significant social policy issue” are not excludable even if they may otherwise intrude on ordinary business. According to legal expert Sanford Lewis, who represented NorthStar, “In ruling in favor of allowing the proposal, the staff has essentially determined that after Citizens United, corporate political spending is a significant social policy issue and shareholders can seek to have input on management’s decisions.”

NorthStar Asset Management, Inc., based in Boston, is a wealth management company with a focus on socially responsible investing.