ExxonMobil CEO Darren Woods speaks through the APEC CEO Summit at Moscone West on November 15, 2023 in San Francisco, California.
Justin Sullivan | Getty Photographs
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Exxon Mobil‘s months-long battle with two environmentally centered activist buyers has value the corporate the help of the California Public Workers Retirement System.
CalPERS, the $484 billion pension fund supervisor, mentioned in a letter on Monday it might vote in opposition to all of Exxon’s 12 director nominees and its CEO Darren Woods on the shareholder assembly subsequent week because of the corporate’s doubtlessly “devastating” effort to quash the 2 activists, Arjuna Capital and Observe This. CalPERS has a $1 billion stake in Exxon.
The 2 activists submitted a shareholder proposal that will have compelled the corporate to cut back direct emissions and set a goal for decreasing emissions at suppliers and prospects. Exxon sued the buyers in Texas federal courtroom in January, prompting them to withdraw the proposal.
Even with the activists backing off, Exxon has continued its lawsuit to stop the activists from ever once more submitting such a proposal.
CalPERS mentioned in its letter that Exxon’s “reckless” lawsuit threatened shareholder activism efforts on any situation.
“If ExxonMobil succeeds in silencing voices and upending the foundations of shareholder democracy, what different topics will the leaders of any firm make off limits?” CalPERS CEO Marcie Frost and board president Theresa Taylor mentioned within the letter. “Employee security? Extreme govt compensation?”
CalPERS mentioned it is urging different shareholders to observe its lead “to ship a message that our voices won’t be silenced.”
Exxon may have doubtlessly prevented the shareholder proposal from going public with no lawsuit by asking the SEC for an exclusion, which is a typical apply. However Exxon went forward with litigation, and mentioned it is in search of “readability on a course of that has develop into ripe for abuse.”
“We consider activists with minimal and even no shares shouldn’t be permitted to re-submit proposals that don’t develop long-term shareholder worth,” the corporate mentioned in a submit on its web site.
Exxon has confronted down activist buyers prior to now.
In 2021, Engine No.1 ran a marketing campaign that landed the agency three board seats. Engine No. 1 had a 0.02% stake, in comparison with CalPERS’ present possession of about 0.2%.
That marketing campaign garnered help from a lot of institutional buyers, together with CalPERS, in its effort to overtake Exxon’s disclosure requirements and rethink the corporate’s place in a zero-carbon world.
CalPERS is now opposing those self same three administrators, Greg Goff, Kaisa Hietala and Andy Karsner, that it helped elect. One other activist investor, Inclusive Capital founder Jeff Ubben, can also be on Exxon’s board.
“We hope ExxonMobil’s administrators will rethink the lawsuit, an effort that appears extra suited to schoolyard bullying than company management,” CalPERS wrote in its letter.
