Exxon Mobil shareholders reject gay-rights proposal

Posted Thursday, May. 30, 2013  Print Reprints

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Exxon Mobil shareholders voted down several proposals at the company’s annual meeting Wednesday, including a measure calling for the company to expressly prohibit discrimination based on sexual orientation.

That proposal, which had drawn increased scrutiny from activists in recent weeks, had support from just 20 percent of shares voted. The company, in advising shareholders to vote against the measure, said its policies already prohibit “all forms of discrimination” in all its workplaces worldwide.

Other proposals calling for increased disclosures of the environmental effects of drilling, including greenhouse gas emissions, were supported by 30 percent or fewer shares cast.

The meeting, at the Morton H. Meyerson Symphony Center in Dallas, included an extended response by CEO Rex Tillerson to supporters of the greenhouse gas measure, which asked the nation’s biggest energy company to set specific goals for reducing emissions and addressing risks from climate change.

“We view climate change as a serious issue. It does present serious risks,” Tillerson said.

But he maintained that climate models are limited in their “ability to understand all the feedback loops” affecting global temperatures, calling the effort “one of the grand challenges” facing scientists.

At the same time, he said, “there is no ready replacement” for fossil fuels to meet growing energy demand worldwide.

The Rev. Michael Crosby, a Franciscan friar from Milwaukee, challenged Tillerson to accept that as the level of carbon dioxide in the atmosphere has exceeded 350 parts per billion, it represents a threat “that needs to be addressed right now.”

Climate researchers recently noted that the average CO2 concentration topped 400 ppb.

Tillerson said there is “nothing magical” about the 350-ppb threshold, even though it represents a “base case” that policymakers should pursue.

“But to suggest that 350 vs. 450 is a known outcome,” he said, overstates the ability of climate models to predict the impact on temperatures.

“We do not see a viable pathway” to reducing CO2 concentration to 350 ppb “without a devastating impact” on living standards worldwide, Tillerson said.

Exxon’s 2010 acquisition of Fort Worth-based XTO Energy came up in Tillerson’s response to a shareholder question about why Exxon’s stock has not outperformed that of its peers over the past five years.

The company’s presentation included a graphic showing that returns to shareholders outpaced both the broader U.S. market and competitors over 10- and 20-year periods.

Tillerson said Exxon has made unprecedented investments since 2008, some of which will take years to pay off. The company says it has spent $162 billion on capital projects in the past five years, including $40 billion in 2012 alone.

And, he said, “the XTO merger had an effect” when U.S. natural gas prices fell to decade lows last year. While Exxon expected gas prices to fall from their peak in 2008, “they stayed low much longer than we expected” because the recession hurt demand and smaller producers continued to develop new supplies.

“Maybe we were off a year or two” in the timing of the $41 billion deal, he said. But that’s not significant in the perspective of a longer view over 30 to 40 years, he said.

In other corporate business, a shareholder resolution calling for all directors standing for election to garner a majority of votes cast drew the most support, with 45 percent, followed by 35 percent support for a measure to separate the posts of chairman and chief executive officer.

Other measures (and their votes in favor) included requiring the company to prepare a formal report on the risks of natural gas development (30 percent); set greenhouse gas emissions goals (27 percent); disclose all lobbying memberships and payments (25 percent); limit the number of boards that Exxon directors can serve on (6 percent); and prohibit contributions to influence an election (6 percent).

A nonbinding “say on pay” measure that expresses shareholder approval of executive compensation gathered just under 71 percent.

Tillerson, addressing the vote in a session with reporters, said that was less than the 78 percent a year earlier but just slightly more than two years earlier.

Tillerson said the change from 2012’s vote likely represented one large institutional shareholder and indicates that more than 70 percent of shareholders are satisfied with the company’s executive pay levels.

Jim Fuquay, 817-390-7552 Twitter: @jimfuquay