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ExxonMobil shareholders pushing for Darren Woods to be removed as CEO
Chairman and CEO, ExxonMobil Corporation, Darren Woods
Kaieteur News – Two shareholders of the American oil major, ExxonMobil are urging investors of the company to vote against the election of Executive Chair and Chief Executive Officer (CEO) Darren Woods at the upcoming Annual Meeting on May 29, 2024.
Westpath Benefits and Investments and Mercy Investment Services Inc in a Notice to shareholders, through a Securities and Exchange Commission (SEC) filing, pointed out that Woods and Lead Independent Director and Nominating and Governance Chair, Joseph Hooley have demonstrated disdain for the voice of shareholders and are willing to use the threat of lawsuits to silence them.
The investors described Exxon’s treatment of shareholders as “hostile” pointing to a recent legal action taken by the company they believe is intended to silence constructive discussion of its strategy. Exxon filed a lawsuit on January 22, 2024, against two shareholders, ‘Arjuna Capital’ and ‘Follow This’, who had filed a proxy resolution with the company, focused on carbon emissions.
Westpath and Mercy reasoned, “We believe the action taken by Exxon represents a broader threat to shareholder rights amid continued concern regarding the company’s management of climate risk.”
The decades-long investors of the company have therefore recommended that shareholders vote against the election of the duo. They explained, “Shareholders should be able to offer constructive solutions through shareholder proposals that strengthen the company’s ability to sustainably deliver on its shareholders’ expectations.” However, they pointed out that the company’s unprecedented lawsuit against investors undermines this important lever of accountability available to the owners of Exxon shares.
“Exxon’s lawsuit sets a negative precedent that we believe will have a chilling effect on future efforts by shareholders pursuing consideration of proposals seeking to improve corporate sustainability,” the shareholders noted.
It therefore urged investors to vote against board members with the primary responsibility of oversight of the decision to use company funds to litigate rather than pursue standard Securities and Exchange Commission (SEC) procedures. Westpath and Mercy explained that the lawsuit is akin to a “SLAPP suit” – a “Strategic Lawsuit Against Public Participation.”
The long-standing investors said, “Exxon’s announcement that it intends to continue to litigate its lawsuit despite the proponents’ withdrawal of the proposal further indicates that Exxon is pursuing an intimidation tactic. Nicolai Tangen, the chief executive of Norway’s $1.5 trillion oil fund and owner of 1.4% of Exxon’s stock, told the Financial Times: “We think it is very aggressive and we are concerned about the implications for shareholder rights.” The two shareholders explained that attempts by ExxonMobil Corporation to undercut feedback from its shareholders threatens additional progress for improvement and transparency in the company’s business strategy and progress, which has the potential for strengthening the company’s profitability in the years to come. Further, Exxon’s actions restrict shareholder communication and intimidate constructive investor feedback, according to the two investors. They argue, “Despite the company’s arguments about the motivations of specific shareholders, it is crucial to respect the democratic avenues available to investors to make their voices heard on material issues to the company’s business strategy.” To this end, they highlighted that while they support Exxon in its goal to responsibly grow long-term investor value, Woods and Hooley have demonstrated disregard for the voice of shareholders through their actions.
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