TheCorporateCounsel.net

April 24, 2024

Shareholder Proposals: “Vote No” Campaign Gives Another Twist to Exxon Drama

When it comes to the “Airing of Grievances” between companies and shareholder proponents, people seem skeptical that it will cause any big change to the shareholder proposal dynamic that we have all grown to know & love. But maybe we shouldn’t jump so quickly to that conclusion. I had actually overlooked that in addition to ICCR, Wespath & Mercy Investment Services (which are both linked with faith-based investment principles and are also ICCR coalition members) have filed this separate notice of exempt solicitation. And this one is more directly framed as a “Vote No” campaign in response to Exxon’s recent actions. Here’s an excerpt:

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. Hence, we believe investors should vote AGAINST board members with primary responsibility of oversight of the decision to use company funds to litigate rather than pursue standard Securities and Exchange Commission (SEC) procedures.

We see the lawsuit as akin to a “SLAPP suit” – a “Strategic Lawsuit Against Public Participation.” 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.”

Who would have predicted this turn of events just three years after Engine No. 1 won multiple dissident seats in an “ESG” framed proxy contest at this same company? Not me! That is why I’m not making any predictions about the final outcome of this saga.

Liz Dunshee