Investor Advocates for Social Justice

Rockefeller Descendants Call for Change at Exxon

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Russell Gold
Wall Street Journal

The descendants of John D. Rockefeller — the founder of Standard Oil, forerunner of today’s Exxon Mobil Corp. — are publicly calling on Exxon to change its corporate governance and take a hard look at the future of global energy supplies.

A majority of 300 adult members of the wealthy Rockefeller family, influential shareholders of Exxon, voted to support four shareholder resolutions at the company’s annual meeting in late May. The proposals include urging the company to create an independent chairman post, cut greenhouse-gas emissions and examine whether Exxon should take a more active role in developing sustainable energy technologies.

While most of these issues have been raised before by shareholder activists, the addition of voices from the Rockefeller family adds weight to the calls for change. Several members of the family will be holding a news conference Wednesday to discuss their concerns about Exxon’s direction.

More than a dozen members of the Rockefeller family are sponsoring shareholder resolutions, according to a public-relations firm working for the family. They include Neva Rockefeller Goodwin, the vice chairwoman of the Rockefeller Brothers Fund and a great-granddaughter of Mr. Rockefeller, the family’s main philanthropic arm. Peter O’Neill, head of the family committee that meets with Exxon management and a great-great grandson, is co-sponsoring a resolution to split the chairman and chief executive positions.

Rex Tillerson serves as both chief executive and chairman. Exxon management opposes all four resolutions.

According to people close to the family, the Rockefeller clan is generally pleased with Mr. Tillerson, who became chairman and chief executive in 2006 and has led Exxon, the largest U.S. company by market capitalization, to several quarters of record-breaking profit.

They are concerned Exxon’s senior management has tunnel vision and is too absorbed with the challenges of daily management of multibillion dollar oil and natural-gas projects to ask hard questions about the future of fossil fuels. Mr. Tillerson and other Exxon executives have said they believe oil and gas will represent the vast majority of energy consumption for decades.

Ken Cohen, Exxon’s vice president of public affairs, said senior management has held numerous meetings with Rockefeller members and disputes the view it isn’t searching for new fuel sources. “We are focused on delivering the energy the world runs on today, reliably and safely and with a lower environment footprint. In addition, we are focused on research and development activity…looking for the step-change break through that would improve the economics of various alternatives.”

The proposal to install an independent chairman at Exxon originally was filed by Robert A. G. Monks, the longtime shareholder activist and critic of corporate boards, in his sixth attempt to win approval of the plan. In a telephone interview, he said the proposal is a way to make the company more accountable to its owners and more open to outside views.

The size of the Rockefellers’ shareholder stake in Exxon couldn’t be immediately determined, but they don’t own enough to determine the outcome of the proxy vote, Mr. Monks said. Still, he thinks the family’s willingness to take a public stance on the matter will prompt other investors to do the same. “If the Rockefellers are willing to stand up and be counted,” he said, “maybe the Ford Foundation would, maybe Harvard College would.” The proposal has been gaining support. In 2003, it drew 21.5% of shareholder votes, and it won about 40% last year.

Ms. Goodwin, co-director of an environmental research institute at Tufts University in Boston, is supporting a resolution calling on Exxon to set up a task force to examine the likely impact of global climate change and how Exxon could make a difference if it took “leadership in developing sustainable energy technologies.”

Exxon has been facing increasing pressure to change its corporate governance and its approach to climate change. Although the proposal for an independent chairman has repeatedly failed, two years ago, a shareholder proposal altering the way board members are elected, won with 52% of the vote.

An Exxon board member said he expected the issue to be discussed at a board meeting scheduled for Wednesday.

–Leslie Eaton contributed to this article.

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