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February 26, 2003
ExxonMobil Receives 23 Shareowner Resolutions on Issues Ranging from Climate Change to Corporate Governance
    by William Baue

Concerted shareowner action this proxy season targets ExxonMobil over such issues as its refusal to address climate change and its coupling of CEO and Chairman of the Board.


Each proxy season, shareowners file resolutions asking companies to address and change myriad social, environmental, and corporate governance practices and policies. While many companies must grapple with one or two contentious issues, a coalition of shareowner action advocates announced in a news conference yesterday that ExxonMobil (ticker: XOM) has received 23 different shareowner resolutions this year.

The resolutions concern issues ranging from climate change to human rights standards to competitive board elections. The coalition includes Connecticut State Treasurer Denise Nappier, shareowner activist Robert A.G. Monks, the Tri-State Coalition for Responsible Investing, and Campaign ExxonMobil. The Tri-State Coalition for Responsible Investing comprises more than 30 Catholic institutions in Connecticut, New York, and New Jersey. Campaign ExxonMobil is a consortium of environmental and faith groups.

This proxy season's count almost doubles the number of resolutions ExxonMobil received last year. Out of last year's dozen resolutions, eight made it to vote. The coalition said it expects as many as 17 of this year's 23 resolutions to make it to vote at the company's May 28 annual meeting in Irving, Texas.

The environmental resolutions ask the company to report on its plans to mitigate the risks of climate change, capitalize on renewable energies, and develop energy efficiency plans. Whereas most major oil companies acknowledge the existence of climate change and are investing in alternative energies to capitalize on the transition to a less carbon-intensive economy, ExxonMobil refuses to do either. The resolutions contend that the company's lack of climate-change and alternative-energy strategies put shareowner value at significant risk.

"It's penny wise and pound foolish not to take seriously the long-term risks and liabilities as well as the opportunities for companies like Exxon Mobil," said Ms. Nappier, who is principal fiduciary of the $17 billion Connecticut Retirement Plans and Trust Funds (CRPTF).

Campaign ExxonMobil National Coordinator Peter Altman amplified the fact that ExxonMobil's refusal to address climate change and renewable energy appears foolhardy.

"They appear to be hoping that climate change will go away," Mr. Altman said. "But hope that climate change will go away is not a strategy; it's a wish--a wish that ExxonMobil seems to be relying on the climate fairy to grant."

"Investors who don't want to rely on this strategy should be asking the company to explain how it will meet the challenge of climate change."

The social resolutions filed with ExxonMobil ask the company to implement a sexual orientation nondiscrimination policy, review and implement human rights standards, affirm political nonpartisanship, and report on the impact of AIDS on operations.

The corporate governance resolutions ask ExxonMobil to double the number of board nominees, split CEO and board chair positions currently held solely by Lee Raymond, limit auditor consulting, redeem poison pills, and restrict director compensation..

The board nominee resolution points out a glaring irony of current corporate governance practices.

"Shareholders have the right to elect directors, yet at each year's annual meeting, shareholders are presented a slate of nominees with the same number of candidates as the number of seats to be filled," the resolution reads. "The end result is that, in reality, the Board selects the directors, with shareholders having only the symbolic right of affirmation."

The CEO/board chair separation resolution, which Mr. Monks filed, points out a similar irony. ExxonMobil's proxy statement, filed on May 29, 2002, charges the board of directors with the responsibility of "choosing the CEO, setting the scope of his [sic] authority to manage the company's business day to day, and evaluating his performance."

"Corporate governance experts have questioned how one person serving as both Chairman of the Board and CEO can effectively monitor and evaluate his or her own performance," Mr. Monks states in the resolution.

Mr. Monks predicted that the U.S. Securities and Exchange Commission's requirement that mutual funds disclose their proxy votes might spur increased support for these resolutions.

"I think it would be very difficult for most mutual fund sponsors to explain to the millions of Americans [invested in their funds] why they chose to vote against these resolutions," Mr. Monks said yesterday.

 

 
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