Academic

Exxon's Annual Meeting

By Gordon Smith, Christine, Hurt, Vic Fleischer, Fred Tung, Lisa Fairfax, David Zaring

Today Exxon Mobil is holding its annual meeting, which is generally accompanied by significant shareholder activism.   Last year featured picketers, seventeen shareholder proposals, and a spirited debate among shareholders about the company?s renewable energy and global warming policies.   According to the Dallas Morning News, this kind of activism prompts Exxon to make its annual meeting ?an orchestrated affair, with assigned seating areas and speaker time limits.  A red light alerts shareholders when their speaking time is up.? 

This year promises to be more of the same.  This year there are 11 shareholder proposals on the proxy statement including a say on pay proposal, proposals requesting that the company set greenhouse gas emission goals and focus more heavily on renewable energy, and even one calling for the company to reincorporate in North Dakota.   There is also a proposal seeking to separate the roles of chairman and CEO.   It will be the eighth time that shareholders seek a vote on such a proposal.  Last year, spurred by support from members of the Rockefeller family, the proposal received almost forty percent of the shareholder vote.  This year there are two differences with respect to the proposal.  First, the resolution is a binding by-law proposal rather than the precatory resolutions submitted in prior years.   Second, proponents of the proposal have attempted to sway mutual funds by reaching out to mutual fund shareholders.  Thus, proponents created a Web site where mutual fund shareholders can send messages to twenty-five different mutual funds asking fund managers to vote in favor of 4 proposals: one focused on separation of the chair and CEO function as well as three others focused on climate change, greenhouse gas emissions and renewable energy.    The message being sent to mutual funds opens as follows: ?I am an investor in one or more of your mutual funds.   Since I have entrusted you to buy and sell the shares in which I invest indirectly, I am taking this opportunity to encourage you to vote in support of four resolutions now before you at ExxonMobil.?   The site indicates that shareholders have sent nearly 500 messages. 

This Internet mobilization effort underscores the fact that shareholders have remained active despite the economic crisis, and that they are willing to use new tools to motivate other shareholders and the company to focus on issues they believe to be important.   Of course it will be interesting to see if such an effort will have an impact on voting outcomes.   

Full post as published by Conglomerate on May 27, 2009 (boomark / email).