Lobbying Expenditures Disclosure

Resolution Text

WHEREAS, full disclosure of Applied Materials’ lobbying activities and expenditures to assess whether our company’s lobbying is consistent with its expressed goals and shareholder interests.

RESOLVED, the shareholders of Applied Materials request the preparation of a report, updated annually, disclosing:

1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.

2. Payments by Applied Materials used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.

3. Applied Materials’ membership in and payments to any tax-exempt organization that writes and endorses model legislation.

4. Description of management’s decision-making process and the Board’s oversight for making payments described in sections 2 and 3 above.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Applied Materials is a member.

Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.

The report shall be presented to the Audit Committee and posted on Applied Materials’ website.

SUPPORTING STATEMENT

Applied Materials spent $15,120,000 from 2010 – 2022 on federal lobbying. This does not include state lobbying, where Applied Materials also lobbies but disclosure is uneven or absent. For example, Applied Materials spent over $1.5 million on lobbying in California from 2010 – 2022. Applied Materials also lobbies abroad, spending between €200,000 – 299,999 on lobbying in Europe for 2022. And chip makers’ lobbying over curbs on sales to China has drawn media attention.1

Companies can give unlimited amounts to third party groups that spend millions on lobbying and undisclosed grassroots activity, and these groups may be spending “at least double what’s publicly reported.”2 Applied Materials lists memberships in the Chamber of Commerce and National Association of Manufacturers, which together have spent over $2.0 billion on federal lobbying since 1998. Applied Materials does not disclose its payments to trade associations and social welfare organizations, or the individual amounts used for lobbying. And Applied Materials does not disclose its contributions to groups which write and endorse model legislation, such as sponsoring the American Legislative Exchange Council.3

Applied Materials’ lack of disclosure presents reputational risk when its lobbying contradicts company public positions. For example, Applied Materials publicly supports addressing climate change, yet the Chamber opposed the Paris climate accord. And while our company does not disclose if it belongs to the American Legislative Exchange Council, which is attacking “woke capitalism,”4 Applied Materials is represented by its trade association, as the Chamber sits on its Private Enterprise Advisory Council. I urge Applied Materials to expand its lobbying disclosure.

1 https://www.bloomberg.com/news/articles/2023-07-15/chip-leaders-head-to-washington-to-lobby-for-china-rules-relief#xj4y7vzkg. 

2 https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/. 

3 https://documented.net/reporting/southwest-airlines-chevron-1-800-contacts-and-other-corporations-amongst-sponsors-of-alec-annual-meeting.

4 https://www.exposedbycmd.org/2022/07/27/abandoning-free-market-and-liberty-principles-alec-takes-on-woke-capitalism-bodily-autonomy-and-more-at-its-annual-meeting/.