Exxon Owners Reject CEO-Chairman Split, Green Fuels
May 27 (Bloomberg) -- Exxon Mobil Corp., the largest U.S. oil company, said shareholders rejected proposals to prohibit its chief executive officer from serving as chairman and to boost spending on renewable fuel sources.
A resolution to separate the CEO and chairman’s roles was supported by 29.5 percent of votes cast at the company’s annual meeting today in Dallas, less than the 50 percent required to force directors to reconsider their opposition. Initiatives to develop low-carbon alternatives to gasoline, adopt pollution- reduction goals and allow non-binding shareholder votes on executive pay also failed.
CEO Rex Tillerson overcame efforts by pension funds and descendants of company founder John D. Rockefeller to accelerate moves to curb greenhouse gas emissions. Tillerson, 57, also defended plans to spend $12 billion in this year’s first half on stock buybacks, even as a drop in crude prices from last year’s all-time high makes potential acquisitions less costly.
“Resolutions to do things like split the chairman and CEO jobs and pursue renewables are really just attempts by environmentalists and unions to gain control of the company to advance various public-policy goals,” said Steven Milloy, managing partner at Potomac, Maryland-based Action Fund Management LLC, whose largest holding is Exxon Mobil stock. “At the top of that list is climate change.”
A proposal by investor Stephen Viederman calling on the world’s largest maker of gasoline and diesel to invest in fuels derived from non-petroleum sources also failed.
Emissions Targets Rejected
Investors turned down a resolution submitted by the Sisters of St. Dominic, a Roman Catholic order based in Caldwell, New Jersey, that would have required the company to adopt targets for greenhouse-gas reductions.
Greenpeace and other environmental groups have been emboldened in their fight to change the company since 2005, when Exxon Mobil quit funding some policy think-tanks that questioned the science behind some global-warming forecasts, Milloy said.
“When Exxon stopped giving money to the climate skeptics, the environmental movement took that as a great victory,” said Milloy, who sponsored an unsuccessful resolution at the 2008 shareholder meeting to ban proposals intended to make political, social or environmental statements. “The company needs to do a better job of defending itself from ideologically motivated critics.”
Tillerson told investors today that he plans to expand output and reserves through new discoveries, rather than buying rival companies or their oil fields. Recent transactions by other companies indicate that asset prices remain inflated from the rally in energy prices that pushed oil to an all-time high in July, he said.
“The deals that we’ve seen done have still been a little bit high,” Tillerson said. “It’s all about valuation and quality of assets.”