If Rex Tillerson passes Congressional hearings and is appointed Secretary of State, his successor is the current president of the company, Darren Woods (who will also become chair). It might be thought that as he is 51, as at the date of the last proxy statement, compared to Tillerson at 64, he might be a bit more doveish on climate change; though he is hardly likely to be a millennial tree-hugger.
He takes the helm at a company where an unprecedented 38.2% of shareholders this year supported a groundbreaking climate change resolution filed by the Church Commissioners and New York State Comptroller Thomas DiNapoli.
While relatively unknown to the SRI sector – most did not want to comment or speculate – Woods is a company man. He can’t match Tillerson’s forty-plus years, but he has worked for Exxon Mobil since 1992 and for no one else, according to his biography, employed in a wide range of domestic and international assignments. He owns only 82,247 shares in the company, compared to Tillerson’s 1.8m, though that is still worth 28 times his base salary.
In 2015, before he was elected president and to the board, he earned ‘just’ $10.4m, compared to Tillerson’s $27.3m. And at last year’s annual meeting had fewer votes withheld than most other directors, only 3%, though that may have just been a reflection of his relatively unfamiliarity.
Exxon does not allow investors to meet its directors – although Woods may have a different perspective on that given he has also run the company’s investor relations function.
One item in his in-tray will be having to deal with allegations by various Attorneys General that the company misled investors about the threat posed to the company’s portfolio by climate change.
While most shareholders did not want to comment, this was not the case with Natasha Lamb, Director of Equity Research and Shareholder Engagement at Arjuna Capital.
In an e-mail response, Lamb said: “Mr Woods appears of the same ilk as Mr Tillerson, a long-time company man who has risen through the ranks. He is inheriting the company at a time fraught with challenges to Exxon’s fundamental business, that is selling oil society can’t burn without inciting catastrophic climate disruption.Wildly, he will be assuming the top role as Exxon’s CEO, as Tillerson presumably assumes the top political role of Secretary of State.
“The conflict of interest that arises from Tillerson’s nomination is staggering, as it could reopen billions of dollars’ worth of Russian reserves to Exxon after 2014 US sanctions nixed that opportunity. Tillerson, along with Trump, is expected to thaw relations with Russia, from whom he has received the Order of Friendship. Unfortunately the duo may also thaw the Arctic.”
Woods also becomes chair despite a decade or so of shareholder resolutions on the issue that started with Bob Monks.
“This duo may thaw the Arctic.”
Andrew Steer, the CEO of the World Resources Institute, said in a statement that, while Exxon had recently acknowledged the existence of climate change and supported the Paris Accord, Tillerson would need to go much further as Secretary of State in order not to cede leadership on climate action to China. “In moving into public service,” said Steer, “Tillerson would need to distance himself from his business interests and do what is best for the country. This includes embracing the transition to a low-carbon future, powered by renewable energy sources, which is good for the nation’s economy and security and its standing in the world.”
So too would Woods. Some have speculated that, given his long career on the refining side of the business, he may push the company in that direction and away from exploration and production. That weak optimism would seem unlikely given the Trump administration’s other recent gung-ho fracker/driller appointments like Scott Pruitt of Oklahoma at the Environmental Protection Agency and, most recently, Ryan Zinke of Montana to the Department of the Interior, raising the prospect of drilling on federal land.
Bloomberg has reported that Woods made $28,848 in political contributions over the past four years, with the largest recipient Exxon’s political action committee ($13,700); he gave $10,000 to the Republican National Congressional Committee.
Next on the agenda for Exxon will be its 2016 results, due on January 31 next year.