(Adds Exxon response to Glass Lewis, moves up context, adds
graphic available)
By Jennifer Hiller
HOUSTON, May 13 (Reuters) - Shareholder activists prodding
Exxon Mobil Corp on climate-change proposals are backing
calls for an independent board chairman as the oil major steps
up efforts to keep climate proposals off its ballot.
Exxon's broad rejection of climate proposals, challenging
sponsors and rebuffing ballot measures as either micromanaging
or unneeded, has accelerated under Chairman and Chief Executive
Darren Woods. This year, it blocked six climate resolution from
appearing on the proxy ballot at its May 27 shareholder meeting.
U.S. oil majors face less government pressure to curb
greenhouse gas emissions and have lagged European rivals in
striking deals with activists. Royal Dutch Shell Plc,
Repsol SA and BP Plc have each moved to slash
carbon emissions and meet global accords.
New York state's pension fund, Church Commissioners for
England, and Legal & General Investment Management, which all
battled Exxon over global warming and lobbying disclosures have
this year taken up a call to split the CEO and chairman roles,
expecting a better reception from an outsider.
"The company has been a laggard on financial performance,
climate risk management and lobbying disclosure for quite some
time now," said Thomas DiNapoli, New York state comptroller and
head of the state's biggest pension fund. "Its peers in Europe,
many of whom have independent board chairs, are outperforming
Exxon on all these," he said.
California Public Employees Retirement System, which holds
9.6 million Exxon shares, just behind New York's 10.2 million
shares, last week came out in favor of splitting the two roles.
Proxy adviser Glass, Lewis & Co separately called for splitting
the two roles.
On Tuesday, Institutional Shareholder Services urged holders
to vote "against" creating an independent chairman, reversing
its stance from a year ago. Exxon's naming of a lead director
able to meet with shareholders changed its view, ISS wrote.
Exxon management is under scrutiny after reporting the first
loss in three decades. Under CEO Woods, Exxon spent heavily in
the last three years for new oil and natural gas supplies, a
move that has so far backfired as prices collapsed.
In a sign of how seriously it takes the challenge, Exxon on
Wednesday issued a four page rebuttal to Glass Lewis,
challenging the advisory firm on the peer group used to measure
executive pay, and praising CEO Woods' "in-depth knowledge of
ExxonMobil and its integrated, multinational operations."
Climate measures elsewhere are gaining. Three climate
proposals this year have won majority votes, including at oil
firms' Phillips 66 and Ovintiv Inc. While not
all results from the 15 are in yet, last year none received a
majority, according to data compiled by the Sustainable
Investments Institute.
Activists are smarting from a 2017 vote. That year, 62% of
shareholders approved a measure led by New York state and
calling for Exxon to disclose business impacts from complying
with climate policies. After agreeing not to pursue the topic
the following year, New York officials were disappointed by the
resulting report.
An Exxon spokesman declined to comment, pointing to
rebuttals that note it has increased the lead director's power.
Combining the chairman and CEO roles "ensures items of greatest
importance for the business" are quickly brought to the board,
Exxon told shareholders in urging a vote against the measure. It
also pointed to $10 billion in lower-emissions investments it
has made over a decade.
The proposal for an independent board chairman would not
take effect under Woods, but would be phased in for future CEOs.
As at other big companies, shareholder support for an
independent chairman has never gotten far at Exxon. Last year,
40.7% of Exxon shareholders supported the measure, up from 38.7%
in 2018. A measure calling for the company to report on its
lobbying activities also failed.
But both were "within striking distance of getting a
majority," said Edward Mason, head of responsible investment at
the Church Commissioners for England. Exxon's rejection of
climate proposals "is in stark contrast to all of its supermajor
peers," he said.
(Reporting by Jennifer Hiller in Houston
Editing by Marguerita Choy)
