John D. Rockefeller founded the core business that is now ExxonMobil, creating a family fortune worth billions of dollars. A report in the Guardian.co.uk yesterday says that family fortune is now leading a “shareholder revolt” against Exxon, calling for a shake-up in leadership at the world’s largest, and some might argue least favorite, oil company (if anyone really has a “favorite” oil company).
At the heart of the growing investor dissatisfaction is Exxon’s intransigence in its position on climate change. While other large oil companies are committing large scale investment in alternative energy Exxon remains committed to the idea that such technology is not economically viable.
The Rockefeller family has sponsored four shareholder resolutions demanding changes in Exxon’s governance. One of the resolutions is for CEO Rex Tillerson to step down from his role as chairman to allow an outsider to sit on the board and bring a fresh perspective – get a real debate going on the board and perhaps bring about a change of direction.
In the UK, the resolution calling for an independent board chairman is backed by F&C Asset Management, Morley Fund Management, the Co-Operative Insurance Society, and the West Midlands Pension Fund.
In the U.S. advisory firms RiskMetrics, Glass Lewis, and Proxy Governance all urge fund managers to back the resolution.
The growing support for the resolution and dissatisfaction from investors may lead to an embarrassing defeat for ExxonMobile at its annual meeting later this month.
Exxon’s general response to the brewing revolt is that the board knows best. In a written response earlier this month Exxon said that the board has “considerable experience and unique knowledge of the challengers and opportunities the company faces”
Apparently a growing number of investors don’t agree.
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