Exxon Mobil shareholders Wednesday voted down a proposal that would have required the board chair be independent from the company.
At the company's annual meeting, 40.8% of voters supported the proposal — shy of the needed majority — including the $197.3 billion New York State Common Retirement Fund, Albany. Last year, the proposal garnered 38.7% support.
"Shareholders sent a strong message that they are dissatisfied with Exxon's poor governance, which is preventing the company from adequately addressing climate risk," said Thomas DiNapoli, the state comptroller and sole trustee of the Common fund, in a statement. "Exxon would ignore this level of support for an independent board chair at its own risk."
As of Monday, no independent chair resolutions have received majority support at any U.S. annual meetings, according to Patrick McGurn, special counsel and head of strategic research and analysis at Institutional Shareholder Services Inc., Rockville, Md. Out of 43 independent chair votes this proxy season, average support was 28.8%, Mr. McGurn added. "Despite it being the most prevalent proposal showing up on ballots, we're just not seeing any increase in voting support for it," he said.
At Exxon, several other proposals received similar levels of support Wednesday, including one that would've made it easier for shareholders to call special meetings (42.4%) and one calling for lobbying disclosures (37.1%).
The company had recommended that shareholders vote against each of the proposals.
No environmental shareholder proposals have received majority support in the U.S. this proxy season either, Mr. McGurn said.
Danielle Fugere, Oakland-based president and chief counsel of the non-profit shareholder advocacy group As You Sow, said there are fewer environmental proposals on the ballot this year. She noted that in April, the Securities and Exchange Commission ruled in Exxon's favor and said it did not have to include a proposal that called for the company to set greenhouse gas emissions reduction goals.
In a statement, the sustainability non-profit organization Ceres said the independent chair vote at Exxon became the main vehicle by which investors could express their concern about Exxon's climate strategy following the SEC's decision.
The 40.8% independent chair vote sent "a strong signal that investors are dissatisfied with the board's approach, including its approach to managing climate risk," said Andrew Logan, senior director of oil and gas at Ceres.
There has been an uptick in the number of director nominees who garnered 20% or greater opposition, he added. Last year at this time there were 474 nominees, or 3.9% of the total board candidates at firms in the Russell 3000 index, who got over 20% opposition. This year, it's 561 nominees, or 4.9%, according to Mr. McGurn.
Overall, as of Monday, 37 proposals have received majority support, compared to 60 last season, he said.
