ExxonMobil shareholders have voted against forcing the company to appoint an independent chair, dealing a blow to campaigners that want it to separate the position from the role of CEO.
Support for the split, which was proposed at the company’s annual meeting on Wednesday, dropped sharply from 40.7 per cent of shareholder votes in 2019 to 32.7 per cent this year, its lowest level in the past five years.
Campaigners say the combined job weakens corporate governance and link it to a perceived failure by the biggest listed oil producer in the US to act on climate change.
Several high-profile investors thew their weight behind the proposed split ahead of the AGM, including LGIM, the UK’s biggest asset manager, the Church Commissioners, which oversee the Church of England’s investments, the UK’s Local Authority Pension Fund Forum and the New York State Common Retirement Fund, the third-largest US public pension plan. BlackRock, the world’s largest asset manager, also voted in favour of the resolution.
But the campaign was dealt a blow earlier this month when the proxy adviser Institutional Shareholder Services withdrew its backing.
Edward Mason, head of responsible investment at the Church Commissioners, said the vote was a “strong result” given the switch by ISS. “The results are clear evidence of shareholders’ desire for change,” he said.
Liz Gordon, executive director of corporate governance at the New York state retirement fund, struck a similar tone.
“We were hoping for more, but it was a good strong vote — more than 30 per cent voted for change,” she said. The company had worked harder to defeat the proposal this year, she suggested, including “rebranding” the presiding director as lead director with some oversight of the board.
Darren Woods, the chairman and chief executive of Exxon, said the appointment of a lead director had helped improve oversight.
A separate resolution calling for increased transparency about Exxon’s lobbying activity won 37.5 per cent support, a similar level to last year.
Shareholders at Chevron, another big listed US oil company that had its AGM on Wednesday, also overwhelmingly rejected a proposal to split the chair and chief executive roles. But shareholders did back a resolution asking for the company to report on its climate change lobbying.
Separately, Chevron said it was planning to lay off 10-15 per cent of its workforce this year as part of a previously announced restructuring. The company currently employs about 45,000 people.
