Exxon Mobil Corp. shareholders on Wednesday rejected a proposal that would have split the roles of the chief executive officer and board chairman at the largest publicly traded oil producer.
Some shareholders had rallied behind that proposal after the U.S. Securities and Exchange Commission (SEC) allowed Exxon to remove a climate change measure from its proxy ballot. The proposal won 41 per cent of the vote at the company’s annual meeting in Dallas, Tex., on Wednesday.
The proposal would not have taken effect under CEO Darren Woods, but would have been phased in later.
Another proposal to make it easier for shareholders to call special meetings also was rejected, though it won 42 per cent of the vote, the most successful proposal on the proxy.
Shareholders also defeated measures urging the board to create a special committee on climate change; report the risks of climate change at U.S. Gulf Coast chemical plants; and report political contributions and lobbying.
Shareholders approved a full slate of 10 nominees to the company’s board of directors.
Under Mr. Woods, Exxon has launched major expansion programs to find and produce new reserves of oil and natural gas, as well as to expand its refining and chemical footprint. It has projected shale production of 1 million barrels a day in the Permian Basin, the top U.S. shale field, as early as 2024.
Shareholders in recent years have pressed Exxon to define a path toward meeting goals of the 2015 Paris climate agreement to limit global warming, but the company has not committed to any targets.
“Engagement on climate is important, but working on solutions through fundamental research and development for new technologies is also important,” Mr. Woods said. He pointed to a recent US$100-million commitment by Exxon to partner with the U.S. Department of Energy’s national labs to research and bring lower-emission technologies to commercial scale.
The Church Commissioners for England, the endowment fund of the Church of England, as well as New York State Comptroller Thomas DiNapoli who manages the state’s pension fund, had urged other shareholders to vote in favour of an independent chairman. They pushed for the protest vote after the SEC said Exxon was not required to let investors vote on a shareholder submission calling for emissions targets “aligned with the greenhouse gas reduction goals established by the Paris climate agreement.”
Exxon had called the resolution misleading, substantially implemented and an attempt to interfere with management responsibilities.
Edward Mason, head of responsible investment for the Church Commissioners for England, who presented two shareholder resolutions, said Exxon’s European oil rival BP PLC has taken on “intensive, meaningful and independent director-led,” work on climate supported by both the company and investors. Exxon, though, has been in “open conflict about climate strategy and disclosure” with its investors, Mason said.
The independent board chair proposal won a record level of support, Mr. DiNapoli said. “Shareholders sent a strong message that they are dissatisfied with Exxon’s poor governance, which is preventing the company from adequately addressing climate risk,” Mr. DiNapoli said. “Exxon would ignore this level of support for an independent board chair at its own risk.”
Mr. Woods said the company would continue to engage with shareholders as part of a “a year-long process.”
More than 50 people organized by environmental group 350 Dallas held signs and chanted outside the hotel entrance to protest Exxon’s climate policies.
“The climate crisis is real and they have contributed to it,” said Olinka Green, 50, of Dallas, who held a sign that said, “There is no Planet B.”
Shares of the Dow Jones Industrial Average component were down about 0.5 per cent on Wednesday.
Exxon is among the top U.S. companies pushing ahead in China despite the trade war between the two countries, and Woods said Wednesday its plans have not been interrupted.
Last year it was approved for an liquefied natural gas terminal and a massive chemicals project in China, the second foreign firm after Germany’s BASF to gain approval to operate such a plant without a local sponsor.
“That is a lifelong investment, a 50- to 100-year timeline investment,” Mr. Woods said. “While we’re sensitive to what we’re seeing in the current environment and the implications, and we’re making sure that we understand how issues can play themselves out, we’re also trying to put that in the context of this long-term time horizon we’re trying to manage.”
The terminal and chemicals project will cost around $9 billion to build, according to IHS Markit estimates.