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Exxon Mobil Shareholders Reject CEO-Chairman Split (Update2)

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Exxon Mobil Shareholders Reject CEO-Chairman Split (Update2) 

By Joe Carroll

May 28 (Bloomberg) — Exxon Mobil Corp. shareholders rejected resolutions calling on the world’s largest company to bar its chief executive officer from serving as chairman and adopt greenhouse-gas reduction targets.

A proposal to split the CEO and chairman’s roles received 39.5 percent at the company’s annual meeting today in Dallas, less than the 50 percent required to force directors to reconsider their opposition. Initiatives to set pollution- reduction goals for Exxon Mobil refineries and hold non-binding shareholder votes on executive pay also failed.

CEO Rex Tillerson prevailed over efforts by descendants of company founder John D. Rockefeller, the California Public Employees’ Retirement System and New York City Comptroller William Thompson to curb his influence and speed action by the Irving, Texas-based company to combat global warming.

“This is much hullabaloo over something other than what everybody should be talking about,” Lizanne Thomas, who heads the corporate-governance practice at law firm Jones Day, said today in a telephone interview from Atlanta. “The real goal here seems to be to make sure some of that profit is devoted to green causes, but splitting the chairman and CEO doesn’t do that.”

Tillerson, 56, led the company to a $40.6 billion profit in 2007, surpassing its own previous record for annual net income by a U.S. corporation set a year earlier.

Since Tillerson became CEO and chairman in January 2006, Exxon stock rose 60 percent as of yesterday’s close of trading, almost three times the 22 percent increase of Royal Dutch Shell Plc, Exxon’s biggest rival.

Pension Pressure

The company, which pumps more oil than every member of the Organization of Petroleum Exporting Countries except Saudi Arabia and Iran, was pressured by pension funds, religious orders, state treasurers and environmental groups in the weeks leading up to today’s meeting.

Pension funds controlled by the Fraternal Order of Police and the National Black Police Association were among investors who opposed splitting the roles of CEO and chairman, saying such a move would damage the company’s performance and lower the value of their holdings.

Tillerson announced plans in March to spend $68 million a day this year to find petroleum reserves, build production platforms and expand refineries. He is the only member of Exxon Mobil management on the 11-person board.

Brazilian Prospect

The company is drilling four wells in a subsea region of the Gulf of Mexico known as the Lower Tertiary and plans to dig its first well in an offshore Brazil prospect known as BM-S-22 during the third quarter, Tillerson told reporters after the meeting.

This was the seventh year the CEO-chairman proposal was on the ballot.

Tillerson, who joined the company in 1975 upon graduating from the University of Texas, said alternative fuels such as ethanol aren’t worth investing in yet because they require government subsidies and mandates to be profitable. The company is funding research into petroleum alternatives including batteries for hybrid cars.

“Twenty-five or 30 years from now, the world is still going to have to use oil and natural gas, whether people like it or not, that’s a fact,” Tillerson said to reporters after the shareholders meeting. “There’s already lots of capital pouring into” ethanol and other alternatives, “and we don’t see those as providing a good return for our shareholders.”

Tillerson has also engaged critics from the Sierra Club in discussions on global warming, a reversal of his predecessor Lee Raymond’s approach.

`New Black Death’

About 20 activists from Greenpeace and other groups gathered in front of the symphony hall today, holding a banner that said “Oil: The New Black Death.”

An airplane towed a banner in the sky over downtown Dallas that said, “End the War! Boycott Exxon Mobil Shell BP.” Exxon Mobil discontinued the practice of distributing donuts to protesters after the company’s 2005 annual meeting.

Exxon Mobil’s 2007 sales of $358.6 billion exceeded the gross national products of countries including Norway, Taiwan and Ireland.

“In these uncertain economic times, what’s not to like,” Steven Milloy, managing partner of Potomac, Maryland-based Action Fund Management LLC, said in a presentation at today’s meeting. “These poseur shareholders see Exxon Mobil as a means to advance their anti-people, anti-business, anti-capitalist, anti-free enterprise, and anti-Exxon Mobil social and political agenda.”

Religious Rejection

Investors rejected 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 formal greenhouse-gas reduction targets.

A proposal for Exxon Mobil to add sexual orientation to its employee anti-discrimination policy received 39.6 percent support, up from 37.8 percent last year. The resolution has been defeated 11 years in a row.

Exxon rose 4 cents to $89.84 as of 2:04 p.m. in New York Stock Exchange composite trading.

To contact the reporter on this story: Joe Carroll in Dallas at[email protected].

Last Updated: May 28, 2008 14:05 EDT

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