ExxonMobil faces an uprising from shareholders claiming the oil titan is failing to live up to its responsibility as a corporate citizen
ExxonMobil faces an uprising from shareholders claiming the oil titan is failing to live up to its responsibility as a corporate citizen.
A showdown looms at the company's annual shareholders' meeting in Dallas on Wednesday, with a series of proposals aimed at changing its corporate structure, pushing it towards more environmentally friendly energy sources.
While activist shareholder resolutions are not uncommon, the move at ExxonMobil is unusual in that it has support from major institutional investors as well as the Rockefeller family, whose ancestor, John D Rockefeller, created Standard Oil, the main forerunner of the current company.
A majority of Rockefeller family members announced last month that they supported a shareholder drive to require an independent chairman. At present, chief executive Rex Tillerson serves as the chairman, despite a movement among some firms to separate the jobs.
The Rockefeller family members are backing resolutions urging ExxonMobil to look beyond its focus on oil and gas to "more effectively" address a rapidly evolving energy industry, particularly renewables and alternative fuels.
The shareholder rebellion has been joined by at least 19 institutional investors, including some of the largest shareholders. The investor coalition, with more than 91 million shares, includes the California Public Employees' Retirement System, the California State Teachers' Retirement System, and state-operated pension funds from New York, Connecticut, Maine and Vermont, along with labour pension trustees and others.
Henry Hu, a corporate governance scholar at the University of Texas, said the notion of splitting the top jobs had gained momentum in recent years amid fears of an "imperial chief executive", but it did not make sense for all firms.
ExxonMobil could not be reached for comment.
The company's first-quarter profit rose 17 percent from a year earlier to a record $10.89 billion (R83.1 billion).
Its 2007 profit of $40.6 billion was the largest annual US corporate profit in history, but sparked criticism that it was benefiting from the troubles of consumers who faced record energy prices. Industry leaders say oil profits are in line with other industries given the massive investment required.