Exxon CEO Woods message to future shareholders activists: Follow the rules
Exxon CEO Darren Woods warned activist shareholders on Tuesday not to follow those who had filed a climate related shareholder proposal with the largest U.S. Oil Company.
Woods said that Exxon was prepared to repeat this exercise against those who, he claimed, might "abuse the proxy proposal procedure".
We hope that we won't need to take this action again in the future. Woods added that if people continue to abuse this process, they will be held accountable.
Woods addressed a New York meeting of the Council of Institutional Investors, which represents pensions funds and other institutional investor.
Exxon sued Follow This and Arjuna in January for submitting a climate resolution to the company's May annual meeting. In June, a judge dismissed the case after the defendants retracted their resolution and agreed not to submit another similar one.
The lawsuit raised concerns that it would reduce the influence of shareholders. Woods stated that investors can still make suggestions to businesses.
Woods said that the current regulators' guidance can lead to abuse of the proxy system. Woods said that established protocols must be followed, which include using courts.
Woods added, "We do not oppose the shareholder proposal process but we will insist that it is used properly."
Woods was met with skeptics, including fund managers, who, due to the lawsuit, voted against Woods, and other Exxon Directors, at the annual meeting of the company in May. Recent filings show that Woods and the other Exxon Directors were re-elected with support from Vanguard and BlackRock, two major investors.
California Public Employees' Retirement System (CPERS), the largest pension fund in the United States, was responsible for some of the crucial votes. Marcie Frost, its CEO, said in an e-mail that she hoped the issue was settled. CalPERS believes that all shareholders should be heard, regardless of whether they agree with or disagree with a company's leadership.
Sanford Lewis, a lawyer who represented Arjuna, and other shareholder activists said that Exxon's lawsuit could have a long-lasting effect on future proxy season.
Lewis, speaking after Woods' speech, said that "small shareholders will think twice" before filing resolutions.
Jessica Wirth Strine is the managing partner at Jasper Street, an advisory firm for corporate governance. She said that while Woods had taken a strong position, his tone was more accommodative than when he spoke out against resolutions on Exxon's proxy.
"At the annual gathering he shot more." She said, "Today he appeared more conciliatory."
Woods spoke of Exxon’s climate outlook before addressing the suit. Woods said that the world must balance its concerns about emissions with the needs and wants of an ever-growing population.
He said that thinking the world must get rid oil and gas is a mistake. The "true" problem, he added, was the need to eliminate carbon emissions.
He said that a system for accounting carbon emissions would be of great help.
Organizers of the conference said late on Tuesday afternoon that security and staff had prevented eight protesters entering the ballroom for Woods' appearance.
During the altercation one member of staff was knocked to the ground "as disrupters tried to make their escape past the registration area. Our security staff and police blocked their entrance to the ballroom, and they were escorted out. The incident did not result in any injuries to our staffer," the organizers stated via email.
Climate protesters briefly interrupted Brad Lander, the New York City Comptroller's remarks at the Monday conference.
(source: Reuters)
