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Exxon Squares Off With Rockefellers, Shareholders

| Thursday May 29th, 2008 | 7 Comments

exxon-rextillerson.JPG Last week, 3P reported that a “shareholder revolt” was fomenting against the leadership of ExxonMobil, and yesterday marked the showdown between the two groups at the annual meeting in Dallas. Characterized as “bruised, but victorious” by the Guardian.co.uk, Exxon’s chairman and CEO, Rex Tillerson, emerged from the meeting with his leadership intact as the revolt failed to capture full support from shareholders. Tillerson, though is viewed as being more progressive than his predecessor, Lee Raymond (who in 2005, dismissed alternative fuels as “inconsequential“), is nonetheless perceived as being resistant to investing in alternative energy. And despite the support of over 70 descendants of the Rockefeller dynasty, including great-great-grandson, Peter O’Neill, and great-granddaughter, Neve Rockefeller Goodwin, the resolution to divide Tillerson’s power only received 39.5% of the shareholder vote.


According to O’Neill, Exxon needs to consider the changing needs of its customers, and argued that not investing in green initiatives would threaten the global environment and the economic stability in the long run.
Tillerson went on record to say, “We’re focused on safely and reliably meeting the growing energy demand while working to reduce our impact on the environment.” However, many opponents view the actions of Exxon as being behind the times. One investor claimed Exxon was acting like a dinosaur, not adapting to a changing environment, and if it continues down the path it’s on, “ExxonMobil-asauras will disappear.”
However, not all shareholders seemed displeased with the outcome of yesterday’s board meeting. Another investor, who said he has put two children though college due to the profits of his Exxon shares, says that the Rockefellers have lost sight of why Tillerson was hired in the first place. He told the board, “That is, to make us money.”
As of 10:42 EST this morning, Exxon shares were up nearly $0.70 from its open to $90.50.


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  • egdv

    There is a basic flaw, in my opinion, in the assumption that splitting Tillerson’s position is going to increase the range of options the Board is going to look at.
    The issue of whether to invest in renewables or alternate energy sources is something that ExxonMobil in its planning process is constantly reviewing, especially now that prices have taken such a sharp move upward.
    Some object to this process when the answer has consistently come back that the “time for renewables” has not yet come.
    Let’s review just the fiasco with ethanol.
    After all the mandates, government support and increase in production, it is becoming clear that ethanol production from corn has not been that good of an idea.
    One because it is costly and still requires subsidies on a massive scale, even when the price of energy high skyrocketted.
    And two because some claim it uses more energy than it produces when one includes the energy required to plant, fertilize and gather all that corn.
    But even if there is still a slightly positive energy balance, as some claim, every day that passes new evidence suggests that the impact on food prices and the environment are unintended consequences that were not taken into consideration when the government made the original decision to subsidize this form of ethanol production.
    Oil and Gas, and for that matter, hydrocarbons, are still the cheapest source of energy for the world economy. And if we want less dependence on oil and Gas, and more alternate fuels, then the price of energy is going to have to probably triple.
    At some appropriate time, when it becomes economic, ExxonMobil will jump in an invest in alternates. Or better yet, it will probably buy in one or two decades a half bankrupt company, heavy ladened with debt, with a nice market share in whatever alternate looks to them as more economic, for a fraction of the cost than the original investors spent in developing the technology and the market share in the first place.
    Everything in life has a timing. When we try to get ahead of technology, and ahead of market signals, we are bound to either fail, or make costly mistakes.

  • HERBERT C. HABER

    We have been led down the wrong path in the past. We should not be railroaded into ethanol or into any other proposed “perfect solution” to our national problems or to our corporate problems by a roller-coaster type movement.
    Recently, we have become knowledgeable about flaws in the ethanol proposed ethanol program. There could be flaws in otther programs, including the one based upon a perceived need to solve” the global warming assertion.
    We should take it real slow and easy in reacting to any reported threat to our well-being.

  • http://del.icio.us/meryn meryn

    First of all, before you can a wrong impression from posting a non-popular opinion, I’m an immense proponent of renewables, and I like the world to be off of fossil fuels as soon as possible.
    Having said that, what would be the rationale for Exxon investing in renewables? Exxon’s management has no experience. Why not let those guys focus on oil (it’s still needed at this moment) let the shareholders take the profits, and let them invest in this in renewables? I bet most of them are doing exactly this, if only as a diversification strategy.
    Normally, the reason for putting multiple divisions in one company would be some sort of synergies. What kind of synergies do people see?
    There’s a big difference between alternative fuels, and alternative energy in general. Maybe Exxon management thinks that alternative fuels will never become big? If the thing after fuel from made from oil is electricity, instead of an “alternative fuel”, than what should Exxon do?
    I don’t really see the problem with ExxonMobil slowly buying up all its shares and just disappearing. When the oil gets to expensive to get out of the ground, workers will slowly need to start looking for jobs in other companies. I really don’t know why ExxonMobil should last forever. Companies only exist on paper…
    If there are no meaningful synergies to be found, then I’d like ExxonMobil to be oil-only, and slowly disappear.

  • charles lachman

    It seems to me that Exxon’s myopic view of what the future holds is a mistake. A company that rakes in such immense profits and has such an enormous corporate and carbon footprint should be on the frontline of promoting alternative energy sources now so they (and their shareholders, of which I am one), will be poised to reap the benefits as supplies dwindle in the future. If they had had the foresight to invest in solar and other energy sources after the experience of the first Oil crisis in the 1970’s who knows how much safer the world would be by now. If, on the other hand, their only raison d’etre is profits, profits, profits, then as the price of oil continues to soar and supplies decrease they will increase profits but lose a lot of goodwill in the process.

  • M.Roseman

    Exxon should make their greatest effort in developing every posible location available that is a source oil. They should be a leader in overcoming restrictions in drillng in places such as the Gulf of Mexico and Alaska. We need more oil now and the development of alternative sources of energy will probably take a great many years. Ofcourse the company should continue to study and plan for the use of alternative fuels,but their main efforts should be to maximize
    our present and near future needs.

  • http://del.icio.us/meryn meryn

    To charles: Why would you think it would be better for you if they invested a dollar for you instead of letting you pick your own favorite renewable energy stock?

  • gabeten

    I believe the reason investors, particularly the Rockefellers want the company to diversify into alternative energy is because the company’s bottom line is suffering as a result of Peak Oil (which it denies exists—because it doesn’t want to admit that it really isn’t so strong anymore and that it has been buying up smaller companies to make investors believe that it still has a lot of oil to sell). The company refuses to admit the reality of Peak Oil to continue giving the impression of strength. The family recognizes the danger of losses due to Peak Oil losses in supplies and wants the company to seek alternatives to fill the gap so that the stock won’t suffer. I stand with the family. If Exxon wants to survive—it must, like an alcoholic, first admit it has a problem—then deal with it and work on viable alternatives to substitute for oil.