Exxon faces shareholder challenges on climate change, executive pay

This week will be a public trial by fire for new Exxon Mobil CEO Darren Woods.

Presiding over his first annual meeting since predecessor Rex Tillerson left to become U.S. secretary of state, Woods will be tested Wednesday on everything from climate change to his own paycheck. Analysts and investors will be watching to see if he proves as adept as his mentor in striking a welcoming tone with restive activists while gently disagreeing with just about everything they say.

So far, Woods has been a stabilizing presence.

“He represents a continuation of what Mr. Tillerson was doing and so far we’ve seen no strategic shift,” said Brian Youngberg, an analyst at Edward Jones. That’s comforting “for long-term holders who own Exxon for the dividend and not much else.”

Woods faces a vote on a resolution requiring Exxon to provide a detailed analysis of whether the energy giant can prosper under strict greenhouse-gas limits. Backers of the measure, which are as diverse as the California Public Employees’ Retirement System and the Church of England’s investment fund, are striving to improve upon the 38 percent support a similar proposal received from shareholders last year. Exxon opposes the resolution because it says it already discloses enough data.

For Irving-based Exxon, which owns XTO Energy in Fort Worth, the shareholder-centered event it stages every May in a Dallas symphony hall has become a donnybrook over the environment and corporate governance. Activist groups have shifted in recent years from rowdy bullhorn protests on the sidewalks outside to delivering measured shareholder appeals inside the meeting hall arguing for more prudent financial stewardship.

Woods, an electrical engineer by training who has spent his entire career at Exxon, will be confronted by investors demanding that Exxon cut new spending on oil fields and hand the cash over to shareholders in dividends instead. And less than five months after his promotion to the jobs of chairman and chief executive officer, Woods and the board he leads will face rising opposition to his $16.8 million pay package and the way it was calculated.

Activist shareholders are hitting Exxon, which produces about 2 percent of the world’s crude oil, with a version of the climate change accounting proposal for a second straight year. Despite the company’s steadfast opposition, the measure attracted more investor support than any of the four other environmental proposals put to a vote last year. This year there are almost 90 Exxon investors planning to support the measure, according to data compiled by investor advocacy group Ceres.

“Exxon’s business is extremely vulnerable to changes in climate regulation and consumer demand,” said New York State Comptroller Thomas P. DiNapoli, a lead sponsor of the climate impact resolution. The company “puts itself and its long-term investors at risk by failing to acknowledge this reality.”

This story was originally published May 30, 2017 at 10:03 AM with the headline "Exxon faces shareholder challenges on climate change, executive pay."