PensionsMay 30, 2024

Shareholder Activist Vote Against ExxonMobil Fails

An average of 95% of votes cast support the company's board amidst a lawsuit against two shareholders over sustainability concerns.

Reported by Matt Toledo

Shareholders of ExxonMobil overwhelmingly voted down a shareholder proposal that sought to reject the reappointment of the company’s board and CEO. A proposal to reject the reappointment of the board failed, with an average of 95% of votes cast voting for re-electing the board at the company’s May 29 annual shareholders meeting.

The resolution was supported by some of the largest pension and investment funds, including the California Public Employees Retirement System, the California State Teachers’ Retirement System and Norges Bank Investment Management, which holds a 1.23% stake in the company.

Approximately 3.3 billion shares were cast, roughly 84% of all outstanding shares. Proposals to adopt an additional social impact report were rejected by 93% of votes.

“Today, our investors sent a powerful message that rules and value-creation matter… we expect the activist crowd will try and claim victory on today’s vote, but common sense should tell you otherwise in light of the large margin of the loss,” said Darren Woods, ExxonMobil chairman and CEO, in a statement.

The shareholder proposal to deny the reelection of the board, like many other proposals, was a longshot, although some say the vote was more about sending a message to ExxonMobil’s board of directors than a serious bid against the board.

“The intention of creating transparency or putting a spotlight on this litigation wasn’t really to unseat the Exxon board…it was more a very clear communication that we say this is an absolute failure in governance, and governance is the responsibility of the entire board,” said CalPERS CEO Marcie Frost in a statement provided to CIO.

A number of investors sought to deny the reappointment of the Exxon board and its CEO over a lawsuit filed against two shareholders, Follow This and Arjuna Capital, that had made a resolution request for Exxon to adopt emissions-reduction targets.

“With this remarkable step, ExxonMobil clearly wants to prevent shareholders using their voting rights,” said Mark van Baal, founder of Follow This, in a statement responding to Exxon’s lawsuit, which was filed in January. “Apparently, the board fears investors will vote in favor of emissions-reduction targets. It seems that ExxonMobil is afraid of its shareholders.”