May 21, 2024 - Business

As shareholder meeting looms, it's ExxonMobil vs. everybody

Illustration of Ben Franklin from a hundred dollar bill on a yellow and green background with elements of a ballot around him

Illustration: Sarah Grillo/Axios

At ExxonMobil's shareholder meeting on May 29, CalPERS, the largest U.S. public pension, will vote against the oil giant's entire board and CEO.

Why it matters: It's a protest vote — but one about shareholder rights.

Catch up quick: In January, Exxon sued activist investors Arjuna Capital and Follow This over their shareholder proposal for the company to set more aggressive emission-cutting targets.

  • The investors have since dropped their resolutions, but the oil company is sticking to its litigation effort.
  • The U.S. Chamber of Commerce and the Business Roundtable have submitted amici briefs in support of Exxon.

Zoom out: CalPERs is not alone.

  • The New York State Common Retirement Fund recently said it would vote against 10 of 12 Exxon board members.
  • At least a handful of other shareholders have also filed documents with the U.S. Securities and Exchange Commission protesting Exxon's actions, per E&E News.

Between the lines: A big piece of Exxon's complaint is about the SEC's process for blocking shareholder resolutions — the company claims it's too difficult for companies.

What they're saying: "Decades of shareholder rights are under threat from a lawsuit filed by the leaders of a powerful U.S. corporation, designed to punish two small groups that dared to speak truth to power," CalPERS said in its announcement.

The other side: "It's unclear why CalPERS is spending their time and energy defending the abuse of a shareholder process by proponents who have publicly stated they have no interest in creating shareholder value and whose actions attempt to silence the voices of up to 90% of our voting shareholders who have rejected the proposal twice," Exxon said in a statement.

  • "Far from having a chilling effect on shareholder proposals, our efforts are intended to get clarity on the rules to foster an environment for open and meaningful shareholder dialogue," said the company.

My thought bubble: It's a bit hard to believe that CalPERS is motivated by a social or political agenda, as Exxon has described the activist investors' motives.

  • Just a year ago, CalPERS CEO Marcie Frost told Axios that she was uneasy about a state bill that would force the pension to divest from fossil fuels, though she does believe in incorporating environmental, social and governance risks into investment decisions.

The bottom line: The debate over whether climate risk is a legitimate business concern has reached a new level.

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