IE 11 is not supported. For an optimal experience visit our site on another browser.

Rockefellers lose bid to change Exxon's path

Exxon Mobil Corp. chairman and CEO Rex Tillerson will retain both of those jobs after a highly public, Rockefeller-led push to separate the roles that failed again Wednesday.
Exxon Mobil Proxy Fight
Rex Tillerson, chairman of the board and CEO of Exxon Mobil, listens to a reporter's question after the annual shareholders meeting in Dallas, Texas, on Wednesday.Lm Otero / AP
/ Source: The Associated Press

Exxon Mobil Corp. chairman and CEO Rex Tillerson will retain both of those jobs at the world's biggest publicly traded oil company after a highly public, Rockefeller-led push to separate the roles that failed again Wednesday.

Stripping Tillerson of the chairman's job in favor of an independent director was the main focus of the company's annual shareholder meeting at a downtown symphony hall. In the end, the measure got support of only 39.5 percent of shareholders, slightly less than last year's 40 percent, despite a hard push by descendants of John D. Rockefeller, the founder of Exxon Mobil predecessor Standard Oil Corp.

A variety of institutional investors in the U.S. and abroad also lined up behind the proposal.

After the meeting, Tillerson, who's held both positions since 2006, said continued strong support to change company leadership — despite massive profits in recent quarters — was not lost on him.

"It just reemphasizes to me the importance of our continuing efforts to communicate better with shareholders and with the public and with policymakers," Tillerson told reporters at a news conference.

That said, none of the 17 shareholder proposals considered at the three-hour meeting received enough support to pass, and all were opposed by the Exxon Mobil board.

Introduced primarily by environmental-minded investors and shareholder activists, they sought such things as quantitative goals for reducing greenhouse gas emissions, shareholder input on executive compensation and a report on the likely consequences of climate change for developing countries and poor communities between now and 2030.

This marked the seventh time the proposal to split the roles of chairman and CEO was considered.

During the gathering, Peter O'Neill, a great-great grandson of John D. Rockefeller, said he spoke for a majority of the family when he wished Exxon Mobil continued success. "We're very, very pleased with the performance that the company has been delivering," O'Neill said.

But Rockefeller family members and others have said they're concerned Irving-based Exxon Mobil is too focused on short-term gains from soaring oil prices and should do more to invest in cleaner technology for the future. Some shareholders lambasted the company for not doing enough now to create far-reaching policies to reduce harmful greenhouse-gas emissions.

"It's crucial for every company to ask, 'Is it doing all it can to prepare for the future?' The Rockefeller family believes now is precisely the time for Exxon Mobil, with its strong financial performance, to take the long-term steps needed to increase shareholder value," O'Neill said.

"All of Exxon Mobil's acknowledged strengths are no guarantee it will remain flexible and visionary in light of the changing energy realities that lie ahead," he added. "That's why we support our company having an independent chair. We are looking forward."

Exxon Mobil has said Rockefeller family members who have filed or co-filed shareholder resolutions own a total of about 332,000 shares. At the end of last year, Exxon Mobil had 5.3 billion shares outstanding.

Some shareholders complained about the company spending too much on share repurchases, others said they'd like larger dividends.

But everyone seemed to agree it would be hard to top the company's financial results. Exxon Mobil posted the largest annual profit by a U.S. company — $40.6 billion — in 2007. And, lifted by record crude prices to start 2008, it earned another $10.9 billion in the first three months of the year — the second-biggest U.S. quarterly corporate profit ever.

As he has in the past, Tillerson said Exxon Mobil will continue to spend the bulk of its profits on finding and producing new supplies of crude oil and natural gas. The company predicts global energy demand will grow by 1.3 percent annually, on average, from 2005 to 2030, and it often cites government forecasts that say fossil fuels will continue to provide about 80 percent of global energy supplies in 2030.

"Notwithstanding the growth in all of the other options for supplying energy — renewables, nuclear, biomass, alternatives — the world's going to require substantially fossil fuels to meet its energy needs," Tillerson said. "And two-thirds ... of that is going to come from oil and natural gas."

To that end, Exxon Mobil has said it expects to invest between $25 billion and $30 billion on capital and exploration projects annually for the next five years, up from about $21 billion in 2007. The increase in part reflects the rising costs of finding new supplies of oil and natural gas.

Oil, Tillerson said, is simply a necessity of life.

"Whether people like that or not, that's just a fact," he said. "You can run but you can't hide. That's what you're going to be using 25 years from now."