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May 29, 2019

Exxon investors move closer to upending dual CEO-chairman role


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Exxon Mobil Corp. (XOM.N) beat back mounting pressure to split the chairman and chief executive positions, and dismantle a structure that dates back decades and has seen the explorer through oil embargoes, war, currency crises and nationalizations.

A total of 40.8 per cent of shareholders voted Wednesday for the proposal, an increase from last year’s 38.7 per cent but short of the simple majority required for it to pass at Exxon’s annual general meeting in Dallas. A majority of investors also voted as the company wished on 10 other proposals.

Splitting the CEO and chairman is a perennial topic at Exxon’s annual gatherings and would represent a seismic shift in the how the 149-year-old oil producer is governed. For decades, a single executive has overseen boardroom deliberations as well as the inner sanctum of top lieutenants who manage day-to-day operations.

The outcome of Wednesday’s vote means Chairman and CEO Darren Woods’ hold on both titles is secure -- for now. Woods became chairman-CEO in 2017 and has about a decade to go before he reaches the company’s mandatory retirement age of 65.

“Shareholders sent a strong message that they are dissatisfied with Exxon’s poor governance, which is preventing the company from adequately addressing climate risk,” New York State Comptroller Thomas DiNapoli said in a statement.

Exxon opposed the measure, arguing that unifying the roles helps directors review critical business decisions in a more timely manner. Institutional Shareholder Services Inc. and Glass Lewis & Co., the leading shareholder advisory firms, advised investors to split the chairman and CEO jobs.

Vote Results

Proposal  Investor support  Last year’s support Election of directors  93 per cent 97 per cent Appointment of auditors 96.8 per cent 97.3 per cent Approval of executive pay 91.6 per cent 72.9 per cent Independent chairman 40.8 per cent 38.7 per cent Special meetings  42.4 per cent 36 per cent Board matrix  29.8 per cent 16.5 per cent Climate committee  7.4 per cent N/A Gulf Coast chemical report 25 per cent N/A Report on political payments 26.1 per cent N/A Report on lobbying  37.3 per cent 26.2 per cent

Exxon shares fell 0.9 per cent to US$71.93 at 12:18 p.m. in New York, trimming the year-to-date gain to 5.5 per cent.