Exxon Faces Shareholder Rebellion Over Global Warming

May 19, 2008

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Four U.K.-based investors and a British proxy advisory firm joined a group of dissident shareholders calling for an independent chairman at Exxon Mobil, BusinessWeek reports.

“Exxon is facing a rebellion from its investors over its hardline approach to global warming,” The Guardian reports. “The firm has refused to follow rival oil companies in committing large-scale capital investment to environmentally friendly technology such as wind and solar power.”

Descendants of John D. Rockefeller, the founder of Exxon Mobil predecessor Standard Oil Corp., have been calling for splitting the roles of chairman and CEO between two people, some saying the company is too focused on short-term gains.

The investors joining the shareholders are F&C Asset Management, Co-operative Insurance Society, Morley Fund Management, and West Midlands Pension Fund. London-based proxy advisory firm PIRC Ltd. has recommended that its clients support the proposal, which is already backed by RiskMetrics Group, Glass Lewis and Proxy Governance Inc.

“Despite top-notch individual directors, the company’s record over the last decade, particularly regarding climate change, demonstrates that debate has been lacking,” says Karina Litvack, director of Governance & Sustainable Investment at F&C Asset Management. “By bringing in an independent chairman, the company can better leverage that creativity and challenge, and avoid over-dominance by management. Over our eight-year dialogue, ExxonMobil management has opened its doors to challenging views – now it’s time for its board to do the same.”

Exxon Mobil’s board has said the most effective leadership structure is for Rex Tillerson to remain both chairman and CEO. Shareholders are expected to vote on the proposal at Exxon Mobil’s annual meeting on May 28.

A year ago a group of institutional investors, who said they collectively represented about 100 million Exxon shares, wanted Exxon Mobil director Michael Boskin removed and would withhold support for his reappointment because he failed to take action on climate strategy.

Earlier this year it was reported that U.S. investors filed 54 global warming shareholder resolutions with U.S. companies, including Exxon Mobil.

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