Comment: With Exxon and investors now in “open conflict”, where next for a dysfunctional relationship?

Last week’s AGM reflected a new low

“Profound dissatisfaction. Open conflict. Frustration. No agreed way forward.”

These were the words of Edward Mason of the Church Commissioners in the wake of the ExxonMobil AGM which saw increased support for the separation of chair and CEO – a reaction to the way the oil giant is dealing with shareholders.

The run-up to the meeting was characterised by a war of words, with Exxon saying the Church of England and New York Common were “misrepresenting” the company.

But, what would the Exxon top brass take from the AGM? Luckily, RI has stumbled upon an entirely fictitious internal Exxon memo (1):

Internal memo: Board debrief on AGM:

1. Relief that the meeting, again, passed off without too much actual fuss. The entire roster of directors got re-elected with big majorities. So the investors must think they’re doing a good job! Congrats all round. Outcome: win for Exxon.

2. Board committee on climate change. We dodged a bullet there. If shareholders really cared about climate change then surely there would be more than just 7.4% support for such a committee? Outcome: win for Exxon.3. Sure, some investor blowhards made some noise, but the upshot of the meeting is that we can still carry on with our business as usual. Our strategy of calling their bluff is paying dividends (in every sense). Outcome: win for Exxon
4. Yes, there have been some high votes on climate change in the past, but we’ve managed to neutralise that threat. Well done to the legal team. Outcome: win for Exxon.

5. Our peer group of companies all have variations on this playbook. Outcome: win-win.

6. We’re unable to say why the investors haven’t heeded the advice of their spiritual leader, Al Gore. He has advised Harvard to divest out of fossil fuels and his firm has called time on “quiet diplomacy” in company-investor engagement. Outcome: win for Exxon.

7. Investors say they have issues with how the company is run. Despite this they put these misgivings to one side and hold its stock in vast quantity. Outcome: win for Exxon.

8. Although we ignore them, the investors talk about engagement. This is a dysfunctional relationship. Outcome: tbc.

9. Despite our poor governance, investors like us. We’re just like Tesla! Outcome: win for Exxon.

10. All in all, great work by the team: here’s to next year’s successful AGM!

(1) This is entirely fictitious.