ExxonMobil shareholders re-elected CEO Darren Woods and the oil major’s 12 board directors at Wednesday’s meeting with average support amounting to 95%, despite Exxon’s slate receiving opposition from the nation’s largest pension fund and multiple state finance officials.
Individual board members were elected with approval rates ranging between 87-98%, according to preliminary results. Exxon said the board was elected with between 91-99% support and a collective average of 96% last year.
Exxon investors also voted down three ESG-related shareholder proposals at the company’s Wednesday meeting. The company faced resolutions to issue reports on: its median and adjusted pay gaps by race and gender, which received 20% support; whether a drastic reduction in virgin plastic demand would affect the company’s finances, which received 21% support; and its social impact on workers and communities due to closures or energy transitions, which only garnered support from 7% of investors.
At the meeting, Woods decried proposals by “serial proponents,” or investors the board believes submit proposals each year to further their own agendas. This mirrored sentiments shared by the board in the company’s proxy materials, where it accused climate or ESG-focused groups of abusing the proposal process as currently structured.
“We believe that the shareholder proposal process as it is currently being applied is not serving the best interest of investors,” Exxon noted in its proxy materials. “Though the SEC rules have not changed, the interpretation of the rules has, allowing activists from all sides to make the same proposals year after year.”
Proxy Impact, which filed the gender and pay gap resolution, objected to Exxon’s description of the organization as a serial proponent in its proxy materials. The shareholder engagement services organization said at Wednesday’s meeting that this is the first time it has filed a proposal before Exxon’s board.
Exxon’s unpopular shareholder lawsuit
Investors like the California Public Employees’ Retirement System and other state finance officials voiced public opposition to Exxon’s board slate last week due to the oil major’s ongoing lawsuit against ESG-focused investors Arjuna Capital and Follow This. The company has continued to pursue the two shareholders over a proposal they filed asking the energy giant to ramp up scope 1 and 2 emissions reductions targets and set a scope 3 target, in line with industry peers.
Despite Arjuna Capital and Follow This’ decision to rescind their proposal — shortly after Exxon initiated the lawsuit against them — the energy giant has pursued a ruling to ensure similar proposals won’t be filed in the future. A judge ruled last week that Exxon’s suit against Arjuna Capital can continue, though a suit against Dutch investor Follow This was dismissed for lack of jurisdiction.
Exxon first filed the lawsuit against Arjuna Capital and Follow This in January, in a move that broke with established norms. Exxon bypassed seeking a ruling from the Securities and Exchange Commission, the typical forum companies take to have proposals excluded. A global coalition of constitutional investors that represent more than $5.2 billion in assets under management wrote in a securities filing Tuesday that it believes the SEC should remain the primary venue for arbitrating shareholder proposals, criticizing Exxon’s decision to bypass the agency.
The case may be nearing its end as shareholders and several members of the investor community continue to voice their displeasure over Exxon’s handling of the proceedings.
Arjuna Capital Managing Partner Natasha Lamb wrote a letter to the energy giant Monday — filed with the court the same day — that said the investment firm “cannot alone bear the brunt of Exxon’s war on shareholder rights.” As such, Lamb said Arjuna Capital “unconditionally and irrevocably” promised it will not file any more greenhouse gas or climate related proposals at Exxon.
“Exxon’s insistence on continuing the lawsuit even after Arjuna withdrew the proposal and promised not to refile it is consistent with a strategy to silence all shareholders who may attempt to raise similar concerns,” Lamb wrote.
Lamb concluded the letter with the expectation that “Exxon will now, albeit belatedly, do what justice and a respect for the rights of shareholders require and withdraw its lawsuit.”
