ExxonMobil on Wednesday beat back a high-profile measure seeking to create an independent chairman, a move that had been sought by members of the Rockefeller family to pressure the world’s largest listed oil company to invest more heavily in alternative energy.
The proxy measure to separate the functions of Rex Tillerson, Exxon’s chairman and chief executive, won 39.5 per cent of the vote, down slightly from the 40 per cent vote a similar measure won last year.
Support for the motion appeared to galvanise in recent weeks as the Rockefeller family mounted a roadshow that won the support of 19 institutional investors, including some of Exxon’s largest shareholders. With momentum appearing to move toward the Rockefellers, Mr Tillerson and Exxon mounted a counterattack by contacting shareholders to lobby for support.
Yet, half of Exxon shareholders are individuals who have been kept happy with their more than 24 per cent annualised return on investment over the past five years, tripling the value of an investment during that period.
Several of them stood to express their satisfaction with the group’s performance, earning robust applause from the 500 who attended the shareholder meeting.
Most US companies have one executive holding the positions of chief executive and chairman, so many institutional investors did not feel hard-pressed to support the issue.
Mr Tillerson told shareholders that $1,000 invested in Exxon in 1987 is now worth nearly $19,000 – double the growth of the Standard & Poor’s 500 Index and ahead of the average of Exxon’s competitors.
Mr Tillerson then sought to explain Exxon’s position on alternative energy. “We have the same concerns as people everywhere – and that is how to provide the world with the energy it needs while reducing greenhouse gas emissions,’’ he said.
Mr Tillerson told the meeting that Exxon had spent more than $2bn over the past five years on initiatives to reduce greenhouse gas emissions and improve efficiency and that it plans to spend another $1bn by 2010.
Other proxy measures taking aim at Exxon’s environmental policies – which included efforts to force it to set greenhouse gas emission goals and report on the impact of global climate change – all failed in spite of a string of speakers urging the company to consider a future beyond fossil fuels.
“ExxonMobil is acting like a dinosaur now,’’ said Stephen Viederman, a shareholder, garnering chuckles from the crowd. “ExxonMobilosaurus Rex must disappear.’’
The Rockefeller family members, who urged shareholders to support such measures, left after the meeting without comment.
Mr Tillerson was conciliatory in his victory, although he indicated that Exxon needed to continue efforts to better explain its positions and actions to shareholders.
Yet, he insisted fossil fuels would continue to provide the majority of the world’s fuel in coming decades: “You can run, but you can’t hide – that’s what you’re going to be using.’’
Nonetheless, he said, beyond the middle of this century, the world would move to another energy source, which was why Exxon was researching breakthrough technologies. In the meantime, the company was focusing on energy efficiency, such as better tyres, fuels and plastics in vehicles.
“We don’t talk a lot about what we’re doing until we’ve got something,’’ Mr Tillerson said. “That’s our culture.’’