With crude oil prices at record levels, dividends up, profits unprecedented and Exxon’s stock hitting a record high in the first half of 2008, investors should be unequivocal in their support of Rex Tillerson, the CEO and Chairman of Exxon. But a significant block of Exxon’s investors are interested in more than just near-term profits. They are also concerned about the future, and they believe Exxon is not prepared for what many expect to be a turbulent time in the energy markets.
Unlike many other oil companies, Exxon has refused to invest in renewable energy and carbon capture technologies. Several institutional investors have joined the shareholders in their low carbon-related resolutions — none of which were supported by Exxon or its board of directors.
These resolutions included a proposal to split up the chairman and CEO positions, so that an independent chairman could spend time reviewing big-picture future energy issues, such as renewables, while Rex Tillerson, as CEO, could focus on running the company. Since 2003, this resolution has been gathering momentum, but appears to have reached a plateau in 2008. In 2003, a resolution to split the chairman and chief executive’s roles received 22 per cent of the vote, and last year it received 40 per cent. At the May 2008 meeting, it received slightly less than in 2007, with 39.5 per cent of the vote.
The low carbon-related resolutions also included a proposal to require Exxon to set specific goals limiting greenhouse gas (GHG) emissions and to engage in renewable energy research. These proposals were supported by 31 per cent and 27 per cent of the shareholders, respectively.
These low carbon resolutions were spearheaded by the descendants of J.D. Rockefeller and supported by several institutional investors, including F&C Asset Management, Co-operative Insurance Society, Morley Fund Management and West Midlands Pension Fund. London-based proxy advisory firm PIRC Ltd. had recommended that its clients support the low carbon-related proposals, which were already backed by RiskMetrics Group, Glass Lewis and Proxy Governance, Inc.