At Exxon Meeting, a Storm Outside but Calm Within
Thursday, May 31, 2007
Any company that rings up $39.5 billion in profit, as Exxon Mobil did last year, is liable to take some flak from consumers and politicians but can usually count on the support of its shareholders.
Outside the oil giant's annual meeting in Dallas yesterday, a smattering of 40 or so protesters, unsatisfied with the company's efforts to stem climate change, displayed signs saying "Exxpose Exxon" and "No Planet, No Dividends."
But inside the downtown symphony hall, about 450 Exxon Mobil shareholders mostly sided with management and the board on 17 resolutions. They thwarted attempts to force the company to set goals for reducing its greenhouse gas emissions and turned back an effort led by California's state pension fund to oust Exxon director Michael Boskin, a Stanford University economist who chaired the White House Council of Economic Advisers from 1989 to 1993.
By unusually narrow margins, shareholders also defeated resolutions that would have recouped bonuses from executives who failed to meet performance targets and would have allowed holders of 10 percent of the company's stock to call special shareholder meetings. Those resolutions garnered 47 and 48 percent, respectively, of shareholder votes.
With growing scientific consensus about the role of greenhouse gases in global warming, the most outspoken shareholders urged Exxon to take steps to curb its own emissions and advance technologies that would help others do the same. Thirty-one percent of shareholders backed a proposal that the company set quantitative targets for lower greenhouse gas emissions from both its operations and its products.
Andrew Logan, director of oil and insurance programs at Ceres, a group devoted to promoting environmental issues at corporations, said at the meeting that it "seems irrational" that Exxon would not attach greater importance to stemming climate change. "You can turn climate change into an opportunity if you want to," he said.
Many shareholders argued that taking steps to curb global warming was in the company's long-term financial interests. Stephen Viederman, a shareholder from New York, compared Exxon Mobil's current strategy to the big U.S. automakers' policy of sticking to gas guzzlers while foreign competitors opted for more fuel-efficient cars.
But Exxon chief executive Rex W. Tillerson replied that he was "not going to put a banner up" about global warming. He asserted that lawmakers and companies should be careful before adopting "life-changing decisions" for future generations.
"What I find perplexing is why people feel so threatened because we want to have a discussion about it," Tillerson said.
Tillerson said Exxon would remain focused on finding and producing oil and gas, which he said would account for about the same share of global energy supplies for at least the next 25 years, despite the growth of renewable fuels.
Environmental concerns were also behind the targeting of Boskin, who chairs the Exxon board's public issues committee. California Controller John Chiang, Connecticut Treasurer Denise L. Nappier, shareholder advocate Robert A.G. Monks and Sister Patricia Daly, executive director of the Tri-State Coalition for Responsible Investment, had complained that Boskin had refused to discuss Exxon's potential financial exposure to climate change or what they called its "failure" to take short-term actions to pare emissions. They said Boskin refused five invitations over the past 18 months to meet two dozen institutional investment fund managers.
An Exxon spokesman, Mark Boudreaux, said that Boskin had arranged a meeting between three Exxon vice presidents and representatives of 19 groups in July 2006, which he did not attend, and had written the groups four letters.
In the end, 93 percent of shares were cast for Boskin, down slightly from 94.5 percent cast for him last year.