Lobbying Expenditures Disclosure

2019 American Water Works Company, Inc.



WHEREAS, we believe in full disclosure of our company's direct and indirect lobbying activities and expenditures to assess whether American Water's lobbying is consistent with its expressed goals and in the best interests of shareholders.


RESOLVED, the shareholders of American Water ("AWK") 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 AWK 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. AWK's membership in and payments to any tax-exempt organization that writes and endorses model legislation.

4. Description of the decision making process and oversight by management and the Board 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 AWK is a member.


Both "direct and indirect lobbying" and "grassroots lobbying communications" include efforts at the local, state and federal levels. Neither "lobbying" nor "grassroots lobbying communications" include efforts to participate or intervene in any political campaign or to influence the general public or any segment thereof with respect to an election or referendum.


The report shall be presented to the Audit Committee or other relevant oversight committees and posted on AWK's website.


Supporting Statement: We encourage transparency in AWK's use of corporate funds to lobby. Since 2011, AWK has spent at least $1.4 million on federal lobbying. And AWK also lobbies extensively at the state level, where disclosure is uneven or absent. For example, AWK spent $1,195,414 lobbying in New Jersey for 2010-2017 and $1,099,875 lobbying in California in 2017.


AWK serves on the board of the National Association of Water Companies (NAWC), which spent $3.85 million on lobbying from 2010 - 2017, and also belongs to the American Water Works Association and the Marcellus Shale Coalition. AWK does not disclose its trade association memberships, nor payments and amounts used for lobbying. And AWK does not disclose its payments to tax-exempt organizations that write and endorse model legislation, such as its support for the American Legislative Exchange Council (ALEC).


We are concerned that AWK's lack of disclosure presents reputational risks. AWK's membership in NAWC has drawn scrutiny ("FERC Commissioner to Become Head of Water Privatization & Fracking Wastewater Lobby," Eyes on the Ties, July 2, 2018), as has its ALEC involvement ("Private Water Industry Defends ALEC Membership," American Independent, May 3, 2012). At least 110 companies have publicly left ALEC.


This proposal received over 40 percent support in 2018 out of votes cast for and against.