Activists Win Symbolic Victory at Exxon Meeting
Date: 01-Jun-06
Country: US
Author: Deepa Babington
The victory is largely symbolic since Exxon is not required to adopt the proposal, which seeks election of Exxon directors by a majority vote.
Still, it is a huge win for shareholder activists who have long trained their guns on the world's largest public oil company with little success. It also underscores the angst among investors over a multimillion compensation package handed to former Exxon CEO Lee Raymond, who retired last year.
"Lee Raymond's retirement package is a rubber-stamp on excessive spending by our company," one shareholder said at the meeting, to applause from the crowd. That package included US$49 million in pay last year and a US$98.4 million lump sum retirement payment.
All this comes alongside consumer fury over soaring gasoline prices and growing anger among environmentalists over Exxon's controversial stance questioning the science behind global warming.
Exxon's US$36 billion profit last year -- the most profitable year ever for a US company -- has added to the outrage, with accusations it is profiting off hapless motorists.
A normally raucous affair, Exxon's meeting drew even more attention than usual this year. About 60 protesters from a group called Exxpose Exxon stood outside the downtown Dallas venue, beating drums and chanting slogans like, "Exxon gets rich while US soldiers die" and "No planet, no dividends."
Dozens of police officers patrolled nearby and barricades kept protesters back from getting close to the meeting.
Inside, Texas oilman Rex Tillerson took the podium for the first time as chief executive, flanked by American and Texas flags.
Facing the barrage of criticism, he adopted a more conciliatory tone with a familiar cast of shareholder activists who assailed Exxon's environmental record and its policies on discrimination.
CIVIL AND GRACIOUS
Unlike his predecessor who was accused of being dismissive and impatient with critics, Tillerson calmly answered several questions in detail, even laughing along with his critics at times. He appeared to immediately win several fans, with some of Exxon's critics calling his handling of the meeting "civil" and "gracious."
"Interest in our industry is very high today with the rise in commodity prices, concerns about energy supplies, and the focus on our company's earnings," Tillerson said, adding that the debate had shown how little people knew about the energy industry.
"The level of misinformation only makes it more important to discuss the massive scale of our industry and the meaningful alternatives available in the foreseeable future."
But he showed few signs of straying from Raymond's playbook on investment decisions, and promised to maintain the company's disciplined approach to investment which ignores short-term swings in oil prices.
Tillerson later also warned that a growing wave of nationalization of energy resources in countries like Venezuela was "short-sighted" and could force oil companies to withhold
its investment dollars from the region.
All other shareholder proposals that Exxon opposed failed to garner a majority in favor of them. Exxon shareholders also voted by a large majority to elect the company's slate of 12 nominees for the board, even though influential proxy firm ISS had urged investors to withhold their votes.
But some of the directors on the ballot received only 79 percent of the votes cast in favor of their election, another sign of the underlying fury over Raymond's package.
Though other resolutions on biodiversity and political contributions failed to elicit an overwhelming response from shareholders, the company's detractors say they are sticking to their demands.
"We're not asking them to transform themselves into Greenpeace," said Athan Manuel, a lobbyist with environmental group US PIRG that wants Exxon to invest in renewable energy sources and do more on global warming concerns. "We're not asking them to do thing
