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Exxon Chief Defeats Challenge

Exxon Chief Defeats Challenge

Published: May 29, 2008

DALLAS —Exxon Mobil’s chairman and chief executive, Rex W. Tillerson, defeated a shareholder effort on Wednesday to take away one of his jobs at an annual meeting punctuated by a debate of the company’s policy toward renewable energy and global warming.

The vote was nonbinding and would not have guaranteed a change in company policies had it passed. But by defeating the challenge, which was supported this year by many members of the Rockefeller family, Mr. Tillerson avoided a serious rebuke to his authority to run the world’s largest independent oil company.

The resolution to divide the top two positions won 39.5 percent of the vote, about the same as last year.

The vote was announced after a robust debate among shareholders, between those who defended management as a great engine for profits and those who argued that a narrow focus on developing oil and gas as energy sources would threaten the global environment and ultimately the company’s financial health.

“Exxon Mobil is acting like a dinosaur now not adopting to a changing environment,” a New York shareholder, Stephen Viederman, said.

A Dominican sister from New Jersey, Pat Daley, said, “We’re faced with a profound moral and business challenge.”

Mr. Tillerson defended Exxon’s record, saying, “We’re focused on safely and reliably meeting the growing energy demand while working to reduce our impact on the environment.”

He has been at the helm for two and a half years and has expressed greater concern about climate change than his predecessor, Lee R. Raymond, who was generally viewed as a skeptic of global warming. While Exxon has put more investment in renewable fuel research, it is far less public about those policies than major rivals like BPChevron andRoyal Dutch Shell.

Mr. Tillerson told shareholders that he believed Exxon must keep focused on its mission of developing more oil and gas reserves, and that oil and gas would remain the primary fuel source for decades to come.

The meeting attracted particular attention this year because several prominent ancestors of John D. Rockefeller, founder of Standard Oil Trust, sponsored 4 of 17 non-binding proxy resolutions introduced at the meeting to take the company in different directions .

Only the resolution calling on the company to divide the roles of chairman and chief executive, was given a chance of passing. Royal Dutch Shell and BP already separate the positions. Shareholders who supported the split said it would sharpen the Exxon’s management and give voice to fresh perspectives from an independent board.

“We are asking you to consider more closely the changing needs of Exxon Mobil’s customers,” said Peter O’Neill, a private equity investor and great-great grandson of John D. Rockefeller, and one of the 73 out of 78 adult descendants of the founder of Standard Oil Trust, to support the effort to divide the leadership roles.

He argued that an independent board led by a chairman who is not chief executive would help the company “keep an open mind” to “take long term steps” not only to work for a cleaner environment but also to take important risks to find more oil reserves.

The resolution had gained support over the years, receiving 40 percent of the vote last year. The Rockefeller family members who are publicly backing the effort this year say they did not intend to embarrass Mr. Tillerson but think the company needs to show more leadership in developing alternative fuel sources that would combat global warming.

Others back and have co-sponsored three other resolutions asking that Exxon study the impact of global warming on poor countries, reduce company emissions of greenhouse gases and do more research on renewable energy sources like wind turbines and solar panels.

“These increased concentrations of CO2 in the atmosphere will cause weather disasters that will work against everyone’s best hope for robust development in emerging countries,” Neva Rockefeller Goodwin, a Tufts University economist and a great-granddaughter, told shareholders, “while also increasing the vulnerability of the poor in the rich countries. It will also impact the global economy.”

Under Exxon rules, proxy resolutions are nonbinding unless they have the support of the board. But company executives say they must take the opinions of shareholders seriously, especially when they represent a majority of votes taken.

Exxon shares were up 29 cents, to $90.09 in afternoon trading.

 

Related

Rockefellers Seek Change at Exxon
 

 

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