Neva Rockefeller Goodwin and Peter O’Neill, descendants of John D. Rockefeller, are among those who want Exxon to shift priorities. Shareholders will vote Wednesday on four resolutions.
New York Times | May 27, 2008
By CLIFFORD KRAUSS
HOUSTON — The Rockefeller family built one of the great American fortunes by supplying the nation with oil. Now history has come full circle: some family members say it is time to start moving beyond the oil age.
The family members have thrown their support behind a shareholder rebellion that is ruffling feathers at Exxon Mobil, the giant oil company descended from John D. Rockefeller’s Standard Oil Trust.
Three of the resolutions, to be voted on at the company’s shareholder meeting on Wednesday, are considered unlikely to pass, even with Rockefeller family support.
The resolutions ask Exxon to take the threat of global warming more seriously and look for alternatives to spewing greenhouse gases into the air.
One resolution would urge the company to study the impact of global warming on poor countries, another would encourage Exxon to reduce its emissions and a third would encourage it to do more research on renewable energy sources like solar panels and wind turbines.
A fourth resolution, which the Rockefellers are most united in supporting, is considered more likely to pass. It would strip Rex W. Tillerson of his position as chairman of Exxon’s board, forcing the company to separate that job from the chief executive’s job.
A shareholder vote in favor of that idea would be a rebuke of Mr. Tillerson, who is widely perceived as more resistant than other oil chieftains to investing in alternative energy.
The Rockefellers say they are not trying to embarrass Mr. Tillerson, also Exxon’s chief executive, but think it is time for the company to spend more of its funds helping the nation chart a new energy future.
“Exxon Mobil needs to reconnect with the forward-looking and entrepreneurial vision of my great-grandfather,” Neva Rockefeller Goodwin, a Tufts University economist, said in a statement to reporters.
“The truth is that Exxon Mobil is profiting in the short term from investments and decisions made many years ago, and by focusing on a narrow path that ignores the rapidly shifting energy landscape around the world,” she added.
The resolution on Exxon’s chairmanship was offered for several years before the Rockefellers became publicly involved and last year was supported by 40 percent of shareholders who voted. Royal Dutch Shell and BP already separate the positions of chairman and chief executive, as do many other companies.
“You need a board asking the tough questions,” Peter O’Neill, a private equity investor and great-great-grandson of John D. Rockefeller, said in an interview. “We expect the company to figure out how in this changing world to adjust.”
Kenneth P. Cohen, vice president for public affairs at Exxon, said the shareholders pushing the resolutions were “starting from a false premise.” He added that the company was already concerned about “how to provide the world the energy it needs while at the same time reducing fossil fuel use and greenhouse gas emissions.”
Fifteen members of the family are sponsoring or co-sponsoring the four resolutions, but it appears that some have much more solid support in the sprawling family than others.
Mr. O’Neill said that 73 out of 78 adult descendants of John D. Rockefeller were supporting the family effort to divide the chief executive and chairman positions. The goal of that resolution is to improve the management of the company, which could strengthen its environmental policies and improve more traditional pursuits like exploring more aggressively for new oil reserves.
David Rockefeller, retired chairman of Chase Manhattan Bank and patriarch of the family, issued a statement saying, “I support my family’s efforts to sharpen Exxon Mobil’s focus on the environmental crisis facing all of us.”
The Rockefeller family has always been identified with oil and the legacy of Standard Oil, but for several generations, it has also been active in environmental causes and acquiring land for preservation. John D. Rockefeller’s grandsons devoted themselves to conservation issues, and Rockefeller charitable organizations have long promoted efforts to fight pollution.
Ms. Goodwin, one of the most vocal Rockefellers on the environment today, is co-director of the Global Development and Environment Institute at Tufts.
In recent years, family members have quietly encouraged Exxon executives to take global warming seriously, but their private efforts did not go far. Until now, they have avoided publicity in their efforts, and the youngest Rockefeller generations have generally shunned attention.
Exxon executives said the company spent $2 billion over the last five years on programs to reduce emissions and improve efficiencies and had plans to spend $800 million on similar initiatives over the next three years. They said the company reduced the release of greenhouse gases from its operations last year by 3 percent, and it was working with Stanford to research biofuels and solar and hydrogen energy.
Since taking over the company two years ago, Mr. Tillerson has gradually shifted the company’s positions away from those of his predecessor, Lee R. Raymond, who was considered a skeptic on the science of global warming.
But with gasoline prices soaring and concern growing over global warming, Exxon, the biggest of the investor-owned oil companies, is a target for politicians and environmentalists. Chevron, BP and Shell, Exxon’s largest competitors, have given their investments in renewable fuels a much higher profile.
Similar or identical environmental proposals have not passed at previous Exxon shareholder meetings, but the public support of the Rockefeller family has given old efforts new energy.
The involvement of the Rockefellers, said Robert A. G. Monks, a shareholder who has been urging a separation of the chairman and chief executive jobs for years, shows that “this is not just a matter of the self-appointed good guys against the cavemen, but also a matter of the capitalists wanting to make money.”
Nineteen institutional investors with 91 million shares announced last week that they would support resolutions asking Exxon to separate the top executive positions and tackle global warming. They included the California Public Employees’ Retirement System, the California State Teachers’ Retirement System and the New York City Employees’ Retirement System.
California’s treasurer, Bill Lockyer, who serves on the boards of the two California funds, said the company’s “go-slow approach” on global warming “places long-term shareholder value at risk.”
Under Exxon’s rules, a shareholder proposal that passes is not binding without the support of the board. But Andrew Logan, director of the oil program at Ceres, a coalition of institutional investors and environmentalists, said, “boards tend to strongly consider proposals that get significant support.”
Paul Sankey, an oil analyst at Deutsche Bank, said that he thought a separation of the chief executive and chairman jobs might be a good management move and that “we might see a mild benefit to Exxon’s public image.” But he added, “On balance, we wouldn’t expect any change in strategy.”
The Fraternal Order of Police, which represents public safety officers, whose pensions are invested in Exxon, has publicly opposed the shareholder effort to change company policy.
“The Rockefeller resolution threatens to degrade the value of Exxon Mobil,” the organization wrote in a letter to Mr. Tillerson that criticized the splitting of the top executive jobs.
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