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.
Further Reading
GlobalWarmingisReal: Wind Energy Investment Can Provide Jobs and Energy Security for the Cost of Four Months in Iraq
Energy and Capital: The True Cost of Oil
AlterNet: It's the Obscene Profits, Stupid! Exxon's Enormous Gains from the U.S. Keep Growing
This is really important news! I'm excited to see not only shareholders, but significant shareholders starting to take notice, and take action.
Bah. I own stock so that they make money... if there's no money in alternatives... DON'T USE MY MONEY ON THEM!!!
Exxon is an OIL company, not an alternative energy company, why they should invest in things they have no experience in is incomprehensible.
I know, let's make car companies make boats, airplane companys make trains, desk companies make jewelry, and book companies make computer monitors... makes about as much sense
Dusty -
First of all, it's a shareholder resolution not an imposition, so you should be happy that preasure is coming from there and not elsewhere. Certainly, thes things are voted on and if you don't like the vote, you can always sell your stock.
Secondly, and much more importantly, the idea is that making some proactive movement towards dealing with climate change (or whatever other issue the resolution concernts) is ultimately GOOD business.
Short term thinking brings companies down eventually. Exxon will make plenty of money in the forseeable future selling oil, but in the long run, that business model needs to change or they are gone. If that's their choice, then no skin off my back, but why they should stand in the way of science as part of their business philosophy is downright stupid - and that's what they've been doing for years with regards to climate change.
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