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Shareholders back Exxon bullying of green investors

ExxonMobil CEO Darren Woods accused climate activists of abusing the shareholder proposal system (ANDREW CABALLERO-REYNOLDS)
ExxonMobil CEO Darren Woods accused climate activists of abusing the shareholder proposal system (ANDREW CABALLERO-REYNOLDS)

ExxonMobil shareholders overwhelmingly reelected the oil giant's board Wednesday, the company said, endorsing its hardball tactics in confronting climate activist investors.

The company's 12 nominees won an average of 95 percent of votes cast, ranging from 87 percent to 98 percent, ExxonMobil said in an email to AFP.

The vote followed criticism of the American multinational's lawsuit against two activist groups that had sought to direct the company to accelerate emissions reductions.

The bullying tactics had drawn sharply-worded rebukes from Norway's sovereign wealth funds and California Public Employees' Retirement System (CalPERS), which voted against all 12 ExxonMobil board nominees.


However, the company's approach won applause from the Wall Street Journal editorial page, which accused the groups of misusing the shareholder resolution process.

"Far from protecting shareholder rights, these agitators want to punish Exxon and its investors for refusing to surrender," the editorial said.

In a win for the company, shareholders not only backed the entire board, but decisively voted down four other measures on issues such as reducing single-use plastics and releasing a study of gender pay.

These were brought by shareholders whom ExxonMobil Chief Executive Darren Woods referred to derisively as "serial proponents."

None of the measures received more than 20 percent, according to preliminary results.

"Today our investors sent a powerful message that rules and value-creation matter," said ExxonMobil, which reported more than $36 billion in profits in 2023.

"Their vote signals a belief that we are on the right track by overwhelmingly re-electing our directors and soundly defeating all four proposals that would have hampered our ability to create long-term value," it added.

"We expect the activist crowd will try and claim victory on today's vote, but common sense should tell you otherwise in light of the large margin of the loss."

- Digging in -

ExxonMobil has been a lightning rod on climate change for years, reliably sparring with investors at sometimes colorful live meetings in Texas prior to the shift to a virtual format.

But the US oil giant, which unapologetically favors heavy petroleum investment despite its negative climate impacts, adopted a more aggressive posture towards activists at this year's gathering.

ExxonMobil has sued two shareholder groups, NGO Follow This and activist fund Arjuna Capital, which sought an investor vote on a measure directing ExxonMobil to accelerate emission reductions, requiring targets and timetables to lower "Scope 3" emissions.

The category of emissions includes those created by consumers using a company's product, such as the CO2 released by the burning of oil and gas produced by a fossil fuel company.

ExxonMobil argued the proposal was the same as one rejected by nearly 90 percent of company shareholders at the 2023 meeting.

Soon after ExxonMobil filed its suit in federal court in Texas in January, Arjuna and Follow This withdrew the proposal.

However, ExxonMobil has persevered with the litigation, asking a federal judge to declare that the measure can be omitted from the company's proxy statement.

CalPERS called climate change "a serious threat to long-term investment returns," while arguing that ExxonMobil's litigious tactics were aimed at "silencing voices and upending the rules of shareholder democracy."

Norges Bank, meanwhile, voted against lead director Joseph Hooley, citing the need to protect shareholder rights. The fund also voted for the proposal seeking a report on median gender and racial pay gaps.

Woods, who presided over the meeting, insisted he supports shareholder democracy when it promotes shareholder value.

"We see a process that was designed to give investors access to directors, management and fellow investors to share their views being abused by a coalition of activists masquerading as shareholders," Woods said.

"For shareholder democracy to thrive, abuses of the process must be addressed," Woods said.

Activists fingered major asset managers such as BlackRock, Goldman Sachs, and JP Morgan Chase who "remained silent" ahead of the meeting, despite calls for support of shareholder rights from labor unions and public officials.

"The voting results indicate these asset managers were unresponsive to asset owners' concerns," said a statement from the Interfaith Center on Corporate Responsibility and other groups.