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Individual employees often hold stock in the company they work for through grants, stock purchase plans, 401k/Roth investments, HSA accounts, etc. either directly in the stock or indirectly through index funds.

Now it is unlikely that any individual employee would have enough to impact boards, elections, or votes. But if you were to aggregate enough employees to give their vote to a specific proxy could they select an employee friendly board member?

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But if you were to aggregate enough employees to give their vote to a specific proxy could they select an employee friendly board member?

Of course. If they end up with enough votes to nominate and approve a board candidate then yes, they could. The likelihood of that is extremely low given that regular employees very rarely have enough shares to provide any significant impact at the shareholder's meetings/votes. Those employees who do, on the other hand, are rarely interested in what you call "employee friendly" actions. Consider Elon Musk, who's an employee of Tesla.

employees often hold stock in the company they work for through ... 401k/Roth investments

That's a no-no, and AFAIK it is expressly forbidden for 401k plans to divert investments into the sponsoring company. If there's a self-directed brokerage account through 401k plan, then maybe employees can choose to buy their own employers' company shares - but even that would probably not be the best idea.

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  • I was thinking more through index funds where some portion of the funds go to purchase company stock along with the other companies on the index.
    – mtmind
    Feb 17 at 21:59
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    @mtmind in these cases the employees are not the shareholders and do not vote. The fund is the shareholder and votes in the best interests of the fund.
    – littleadv
    Feb 17 at 22:01
  • I know that pre-Enron many companies forced company matching funds in the 401(k) to be invested in company stock. As late as 2015, the last time I worked for a publicly traded company, we were able to invest either the employee or the employer funds in company stock, but we couldn't be forced to. Feb 18 at 20:50
  • Right, that change was because of Enron. You can choose your own investments, but the company can't force you invest in its own shares.
    – littleadv
    Feb 18 at 20:54
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It would require that the employees collectively held a significant proportion of the issued shares.

I am a shareholder in my employer, as are many of the other employees, through a company share save scheme. I looked at the share profile of the company and discovered that if every small shareholder got together and decided to vote the same way, it would make no difference. Any one of the large shareholders could out-vote all the employees combined.

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  • This seems to be the consensus. So maybe at the retail investor level with many more investors, but more difficult to align. Or maybe at the fund level like ESG funds work for environmental issues.
    – mtmind
    Feb 19 at 0:27
  • I'm guessing some of the large shareholders are institutions. They vote as a block for the institution, but it may not truly be in the best interest of the people with money in those funds through various HSAs, retirement accounts, pensions, etc.
    – mtmind
    Feb 19 at 0:48

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