Tech employees open wallets to beat Trump even as stocks, profits soar

Tech employees open wallets to beat Trump even as stocks, profits soar

US President Donald Trump (r) and Apple CEO Tim Cook speak to the press during a tour of the Flextronics computer manufacturing facility where Apple’s Mac Pros are assembled in Austin, Texas, on November 20, 2019.

Mandel Ngan | AFP | Getty Images

Their stock prices are near record levels. So are their profits. Their founders are among the wealthiest people on the planet.

But while the world’s most valuable tech companies have expanded their dominance in the 3 1/2 years of Donald Trump’s presidency, with an assist from corporate tax breaks, employees at those same companies are more adamant than ever about unseating him.  

“A lot of people have been making a lot of money in Silicon Valley while watching the world fall apart,” said Misha Chellam, a former start-up founder who last year started the non-partisan Council on Technology and Society to engage tech executives on political issues. “They’ve seen their fortunes rise and seen much of the rest of the country’s fortunes fall.”

For decades, the tech industry has leaned left, particularly in the hotbeds of Silicon Valley and Seattle. Heading into this November’s contest, the partisan disparity has never been so lopsided.

Employees at the big five tech companies — Apple, Microsoft, Amazon, Alphabet and Facebook have thus far contributed a total of almost $15 million to Democratic candidates, compared to just under $3 million to Republicans, according to data from the Center for Responsive Politics‘ OpenSecrets website.

That means Democrats have received 84% of employee donations, an increase from 68% in 2016 and 79% in the 2018 mid-term elections, when the Democrats won the House back from Republicans. Campaign finance laws restrict the amount an individual can contribute in an election to $2,800, or $5,600 between the primary and general election.

The gap could narrow as the general election nears. A good chunk of tech spending to date went towards a competitive Democratic presidential primary, while Trump effectively ran unopposed. But since Joe Biden became the presumptive Democratic nominee, the imbalance has actually expanded. Between the two candidates, Biden has collected more than 92% of the donated money from the top tech companies, according to OpenSecrets.

Tech workers aren’t just eyeing the White House. They’re also sinking money into tight Senate races, aiming to help Democrats pick up the four seats necessary to reclaim a majority. Amy McGrath, who’s running to unseat Senate Majority Leader Mitch McConnell in Kentucky, is getting a big boost from tech money, along with Jaime Harrison, the Democrat taking on Lindsey Graham in South Carolina, and Mark Kelly, who’s running against Martha McSally in Arizona. 

Travel ban and trade war

Trump’s tumultuous relationship with the tech industry dates back to his anti-immigrant campaign rhetoric and efforts to impose a Muslim travel ban shortly after he took office in 2017. That year, Trump also refused to call out white nationalism after the violent Charlottesville rally and pulled out of the Paris climate agreement. His inconsistent and often incoherent trade war with China has won him few fans in tech, which benefits from healthy trade relations with the world’s second-biggest economy.

That was all before the calendar turned to 2020, a year that started just after Trump’s impeachment in the House and brought with it wide criticism for his handling of the coronavirus pandemic and nationwide protests against police violence. 

But Trump’s presidency has also coincided with record business success for Big Tech.

Apple, Microsoft and Amazon (despite Trump’s vendetta against CEO Jeff Bezos) have soared past $1 trillion in market cap, with Alphabet closing just above that mark on Thursday, and Facebook in fifth place at over $600 billion. No other public U.S. company is close in value. Shares have gained between 79% (Alphabet) and 257% (Amazon) in value since Trump’s inauguration.

Tech executives lauded the Trump administration in 2018 for lowering the tax on repatriated cash, allowing them to bring hundreds of billions of dollars back from overseas, paving the way for heftier buybacks. He also reduced the corporate tax rate, giving a boost to earnings.

Regulations haven’t posed much of a problem either. Threats of regulating Big Tech have circulated since last July, when the Department of Justice said it was opening a broad antitrust review. But the loudest voices demanding that tech giants be broken up have been on the left from Sen. Elizabeth Warren and Sen. Bernie Sanders.

I’m just exasperated at the fact that Adobe stock hits all-time highs at the same time that the economy has been hit so hard.

Jonathan Brown

Mobile apps developer at Adobe

Not even an economic crisis has impeded tech’s growth. The travel and hospitality industries have been decimated by Covid-19, but the Nasdaq, powered by programmers working from home, is trading at an all-time high. While Apple, Amazon and Google are expected to take an earnings hit this year related to Covid-19, analysts expect them to all be back at record profits in 2021. 

‘I’m just exasperated’

Silicon Valley veterans are quick to recall a tech industry that was historically liberal on social issues but conservative on fiscal matters, in favor of small government and fearful of higher taxes and more regulation. You don’t have to go far to find people who voted for Mitt Romney, John McCain and George W. Bush.

But Trump made it hard in 2016 for many mainstream Republicans to suck it up and support their party’s candidate. Clinton won by a wider margin in Seattle and across most of the Bay Area than did Obama four years earlier, and employees at the five most valuable tech companies contributed 60 times more to Clinton than to Trump.

They’ve now had almost four years to see their concerns play out.

Jonathan Brown, a mobile apps developer at Adobe who started working there in 1995, is doing great financially. The software maker’s stock price is up 34% this year and has quadrupled since Trump took office, pushing its market value past $200 billion.

But like many of his colleagues, Brown is unhappy with where the country is headed. 

“I’m just exasperated at the fact that Adobe stock hits all-time highs at the same time that the economy has been hit so hard,” said Brown, who’s based in Seattle. “I feel responsible to leverage some of my wealth to move politics in the right direction.”

Brown contributed $500 to Jamaal Bowman, who just recently won his Democratic primary in New York over incumbent Congressman Eliot Engel, and $500 to Rep. Ilhan Omar of Minnesota, who was first elected to congress in 2018. Brown says he’s no fan of Biden, and actually contributed to Sen. Warren in the presidential primary.

Former middle school principal Jamaal Bowman poses outside a subway station on June 17, 2020 in the Bronx borough of New York City.

Jeenah Moon | Getty Images

He’s mostly focused on backing liberal Democrats in their primary elections and hasn’t yet decided what he’ll do during the general elections.

“This is the first year that I’ve really paid that much attention to political campaign giving,” Brown said, adding that he’s previously been more inclined to donate to nonprofits.

Adobe has always been a heavily pro-Democratic company, based on donations in past elections, but with four months still to go until the 2020 contest, employees have already contributed more to candidates than in any previous cycle, according to OpenSecrets.

But even some tech companies that were farther to the right on the political spectrum have swung dramatically toward the Democrats. Employees at Oracle, whose founder Larry Ellison and CEO Safra Catz are Trump supporters, have sent 67% of their cash to Democrats, up from 49% in 2016. The shift at Cisco is even more stark, with Democrats receiving 80% up from 36% four years ago.

An executive at one San Francisco financial technology company, who asked not to be named because of the sensitivity of the subject matter, said the overwhelming emotion among his peers is fear.

His company and the industry as a whole count on immigration for talent and sensible trade policies for conducting business. Within his circle of tech workers, the executive said, people are concerned that the U.S. is losing its appeal and becoming a frightening place.

Sen. Doug Jones (D-AL) speaks during a news conference on healthcare April 30, 2019 on Capitol Hill in Washington, DC.

Alex Wong | Getty Images

The executive has donated to Biden as well as Democratic Sen. Doug Jones of Alabama, who’s fighting to keep his seat. He also sent money to the Lincoln Project, a political action committee formed by anti-Trump Republicans to run a series of hard-hitting ads.

Margaret O’Mara, a history professor at the University of Washington, said that the tech industry is more politicized than ever. Even before 2020, employees at Google, Microsoft, Amazon and Salesforce had protested contracts their companies had with the government. There was also the role that Facebook, YouTube and Twitter played in enabling the spread of misinformation and foreign meddling in our Democratic process.

Employees have shown a willingness to jeopardize their jobs to demand transparency and accountability from their bosses. When it comes to political leaders, they’re voting with their wallets.

“This is a different historical moment,” O’Mara said. “It’s become harder to stay on the sidelines.”

Even top tech execs are getting more vocal.

Cisco CEO Chuck Robbins, who succeeded lifelong and vocal Republican John Chambers at the helm in 2015, joined the parade of tech executives in tweeting #BlackLivesMatter after the killing of George Floyd in late May by a police officer in Minneapolis set off a wave of nationwide protests.

Three days after Trump tweeted, “when the looting starts the shooting starts,” Robbins told his followers that Cisco was committing $5 million to groups including Equal Justice Initiative, Black Lives Matter and its own fund for fighting racism.

“Look, I think what’s happened here is that the issues that exist have just been highlighted, and I think the entire community of business leaders and society have said, ‘That’s it,'” Robbins told CNBC in a mid-June interview. without criticizing Trump directly.

Facebook’s billionaire CEO Mark Zuckerberg and his wife, Priscilla Chan, said last month in a letter to scientists who fund their philanthropic organization that they were “deeply shaken and disgusted” by Trump’s rhetoric. Zuckerberg was under pressure from donors for allowing hate speech to flourish on Facebook, an issue that’s become a major concern over the last couple weeks, with many global brands boycotting advertising on the site.

Jotaka Eaddy, founder and CEO of political consulting firm Full Circle Strategies, said CEOs are being forced into the action.

“You can’t say Black Lives Matter and I care about Black lives but then continue to allow the perpetuation of hate and violence on your platform,” said Eaddy, who splits her time between Washington, D.C., and the Bay Area. “They contradict each other.”

— CNBC’s Jordan Novet contributed to this report.

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