Exxon emerges victorious in board dispute with dissident shareholders

ExxonMobil faced a major showdown with its shareholders as they voted overwhelmingly to re-elect all 12 members of the company’s board, despite a campaign against two directors over a controversial lawsuit. The supermajor’s decision to sue climate-focused investors sparked a backlash, with large shareholders pledging protest votes.

The lawsuit, targeting US investment adviser Arjuna Capital and Dutch shareholder group Follow This, came after they introduced a resolution demanding Exxon do more to cut greenhouse gas emissions. While the groups have since withdrawn their resolution, Exxon has persisted with its legal action. A judge recently dismissed the case against Follow This but allowed the case against Arjuna to proceed.

The outcome of the shareholder meeting was closely watched by Wall Street, with critics warning of a chilling effect on shareholder rights in the US. Calpers, the largest US public pension plan, voted against the re-election of all Exxon directors, calling the lawsuit “reckless” and an attempt to “silence” shareholder voices. Norway’s sovereign wealth fund also opposed the re-election of a director.

Exxon argues that the lawsuit was necessary due to a change at the Securities and Exchange Commission, allowing more environmental, social, and governance motions to proceed to shareholder votes. The company claims the SEC has allowed burdensome proposals onto the ballot, leaving it with no choice but to seek legal recourse.

Despite the controversy, Exxon remains steadfast in its position, emphasizing the importance of rules and value creation. The outcome of this battle between the energy giant and its shareholders could have far-reaching implications for corporate governance and shareholder activism in the US.