Exxon and the Shareholder Meeting: The Results Are In

One advantage to Regulation FD is the continued increase in the number of companies that webcast their annual meetings. Exxon held its meeting today, allowing the public, including this blog, to listen. I came in late and apparently the CEO, Rex Tillerson, made a statement acknowledging the importance of renewable energy, a substantial concession to those concerned about global warning and an apparent attempt to demonstrate that the concerns of shareholders were being heard.  A description of his remarks can be found here. 

First, the results.  At the meeting, there were 17 shareholder proposals.  All of them failed.  The proposal to separate chairman and CEO received 39.5%, say on pay received 40.7%, and 39.6% on the proposal to amend its written equal employment opportunity policy to explicitly prohibit discrimination based on sexual orientation and gender identity and to substantially implement the policy. 

In the environmental/renewable energy area, one proposal calling for the adoption of a policy for renewable energy research, development and sourcing received 27.4% and a proposal requesting the adoption of quantitative goals, based on current technologies, for reducing total greenhouse gas emissions, received 30.9%. Finally, a proposal calling for a report on political contributions received 27.6%.  All of the other proposals received 15% or less. 

As for the meeting itself, the forum demonstrated shareholder democracy in action. The meeting involved a raft of speakers, including representatives of large pension plans, a Capuchin priest, members of the Rockefeller family (including a great-great-grandson of John D. Rockefeller), a union official from the refinery at Baton Rouge, retired employees, and ordinary investors.  A number of them had stories of small investments in the oil company and praised the return, the board and the CEO.

Others expressed concern about the need for investment into renewable energy sources and the need for Exxon, at the height of its economic success, to invest in these sources and integrate notions of renewable energy into the company's culture.

Another raft of comments centered on the perceived failure of the board to communicate with shareholders.  The emphasis was on the need to separate chairman and CEO as a means of improving communications with shareholders, one commentator referring to the board's "deaf ear." 

Tillerson ran the meeting with a deft and respectful hand, occasionally sprinkling in comments (pointing out that Exxon had an effective tax rate of 49%, praising the union at the refinery in Baton Rouge) and putting paid to market rumors (in fact, Exxon had no intention of going private). 

None of the proposals passed.  That does not mean Exxon can rest on its laurels.  The proposals demonstrated considerable shareholder dissatisfaction with a wildly profitable company.  If the profits fall, the level of discontent will rise and many of these same proposals are likely to garner greater support.