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
"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
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.
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
"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.