By Steven Mufson
Washington Post Staff Writer
Thursday, May 29, 2008

Exxon Mobil yesterday fended off a revolt by descendants of company founder John D. Rockefeller Sr. at the firm's annual meeting in Dallas and defeated a shareholder resolution that would have divided the jobs of chairman and chief executive, now both held by Rex W. Tillerson.

The proposal, which was approved by 39.5 percent of shareholders, was one of four resolutions that garnered substantial shareholder support from the extended Rockefeller family, state pension funds, institutional holders and individuals, though all of the measures fell short of the majority needed. The other resolutions would have forced the company to give shareholders some say over executive pay, prohibit discrimination based on sexual orientation, draw up a plan to cut its own greenhouse gas emissions and turn its attention toward clean energy resources.

The meeting cast Exxon's founding family in an unusual role: dissident shareholders.

"It is very rare for us to do something public," Peter O'Neill, Rockefeller's great-great-grandson, said in an interview after yesterday's shareholders meeting. But at one of the family's semiannual meetings in the New York area, he said, nearly all the Rockefeller descendants had agreed to back four shareholder resolutions opposed by the company.

"For 73 out of 78 adult descendants to come together and say we're going to stand up is a big deal," O'Neill said. "Obviously we were concerned about some of their policies and the pace of change."

The focus of the family's concern has been climate change and its consequences for the planet and the company, and Tillerson nodded to climate issues in his opening remarks yesterday. But Tillerson said that "25 or 30 years from now, the world is still going to have to use oil and natural gas. Whether people like it or not, that's a fact."

O'Neill said the family began conveying a different view to Exxon senior managers five years ago. Though family members have had "multiple meetings" with Exxon executives, board members have refused to meet them. On only one occasion did Tillerson and the previous chief executive, Lee Raymond, grant an audience to members of the family, and that was to David Rockefeller -- the former chief executive of Chase Manhattan Bank and a grandson of John D. Rockefeller -- along with one of his daughters, Neva Rockefeller Goodwin.

But the family stayed focused on Exxon. More than a century after John D. Rockefeller retired, Exxon remains the family's biggest single holding, O'Neill said.

This year, the Rockefellers decided to take to the floor of the annual shareholders meeting, strongly supporting the resolution separating the chief executive and chairman positions and sponsoring the resolution urging Exxon to come up with targets for greenhouse gas emissions and a strategy for developing clean energy resources. (It was the seventh consecutive year that a resolution to separate the chairman and chief executive jobs -- a division common in U.S. corporations -- was on the agenda.)

From the floor of the Dallas auditorium yesterday, Goodwin -- author of an introductory college microeconomics textbook and co-director of Tufts University's Global Development and Environment Institute -- said that members of the extended Rockefeller family "have become seriously concerned about the future of Exxon."

She said that "increased CO2 in the atmosphere will cause weather disasters that . . . will certainly have a huge and harmful impact on the global economy itself, on which the success of a giant global company such as Exxon Mobil so largely depends."

Goodwin said that the company's forecasts of strong oil-demand growth from developing nations were inconsistent with the consequences of climate change from growing greenhouse gas emissions. "Those nations will be the ones most adversely affected by climate change," she said.

Yet Goodwin's resolution proposing that the company establish a task force to study climate change and opportunities for Exxon to develop sustainable energy technologies won only 10.4 percent of the votes cast.

The polite but pointed Rockefeller rebellion was an odd historical twist. After John D. Rockefeller Sr. founded Standard Oil in 1870, people in the business disregarded his views at their peril. The Standard Oil Trust either bought up competitors or drove them out of business and ultimately controlled the vast majority of the U.S. oil industry.

In 1911, the Supreme Court broke up Standard Oil. The pieces included Standard Oil Co. of New Jersey (now Exxon), Standard Oil Co. of New York (now Mobil), Standard Oil Co. of Indiana (later Amoco and now part of BP), Standard Oil Co. of California (now Chevron) and Standard Oil Co. (Ohio), later Sohio and now part of BP.

The Rockefeller family holdings have dwindled. Kenneth Cohen, an Exxon vice president, said this year that the family owns only 0.006 percent of the company, but an outside representative of the family asserted that family holdings may be as high as 1 percent when all of its trusts are taken into account.

The largest shareholders of Exxon are institutions, especially those managing pension funds or index funds. Barclays Global Investors owns 4.41 percent, State Street owns 3.56 percent and Vanguard Group owns 3.15 percent. Many of them routinely abstain on shareholder resolutions.

Exxon management lobbied hard in advance of yesterday's meeting to defeat the most popular resolutions.

"If they only spent as much time saying, 'We'll sit down and talk to you' . . . they could have avoided a lot of this," said Sister Patricia Daly, a Dominican nun and shareholder activist based in New Jersey who attended yesterday's meeting.

Though the resolutions were defeated, O'Neill said the Rockefeller clan would continue to press Exxon directors and executives. "They have to get out of their comfort zone and be open-minded and truly look at solving some of these problems," he said. "They're very cautious when drilling a well and that's great. . . . But I personally would still like to see them use some of their brilliance to solve some of these problems. And they'll make more money."