Our Take, with Doug Sheridan
The WSJ Editorial Board writes, woke activists simply can't get the heads around ExxonMobil's clarity of purpose.
Our Take, with Doug Sheridan
The WSJ Editorial Board writes, woke activists simply can't get the heads around ExxonMobil's clarity of purpose.
CalPERS said it would vote against all of Exxon’s directors at its coming shareholder meeting. Proxy adviser Glass, Lewis & Co. recommended shareholders reject its lead independent director Joseph Hooley’s re-election, citing “unusual and aggressive tactics” against activist investors.
Meanwhile, Majority Action, a leftist outfit, is prodding institutional investors to oust CEO Darren Woods and Hooley for “attacking shareholder democracy and failing to address climate risk.”
Far from protecting shareholder rights, these agitators want to punish Exxon and its investors for refusing to surrender. Exxon filed a federal lawsuit in Jan to block a shareholder resolution by Follow This | Shareholders change the world and Arjuna Capital that sought to force steep cuts to Exxon's CO2 emissions, including any from the combustion of its products. Exxon says the resolution would force it to “change the nature of its ordinary business or to go out of business entirely.”
Longstanding SEC rules let companies block shareholder resolutions that affect a company’s “ordinary business operations.” But current SEC Chair Gensler has declined to let companies nix resolutions if they have a “broad societal impact.” Read—political impact. As a result, annual proxy voting has become a shareholder plebiscite on ESG matters.
Arjuna Capital and Follow This in Feb dropped their resolution, perhaps worried they might be required to pay legal damages if they lost. Yet Exxon has continued its lawsuit because it says “the underlying issue remains and must be resolved.” That is, can progressive activists harass companies with ESG resolutions that seek to harm other shareholders?
"Until the courts weigh in, activist investors will continue, with the SEC’s approbation, to inundate public corporations with proposals designed to push an ideological agenda divorced from the success of the corporation,” the US Chamber of Commerce and Business Roundtable wrote in a friend-of-court brief for Exxon.
Courts have ruled cases aren’t moot unless it’s clear defendants won’t resume their allegedly wrongful behavior. Arjuna and Follow have twice pursued unsuccessful resolutions to force Exxon to reduce its emissions. Who doubts that they will introduce similar proposals in the future?
This explains the retaliation against Exxon because progressives fear a judge could stop their corporate harassment. But the real threat to shareholders are progressive investors with minor stock holdings who want to commandeer and destroy companies for their own political ends.
Our Take: The tide is turning against the radical green left. Ergo, we predict sound defeat of these progressive agitators' transparently bad-faith shareholder proposals. That was the case at Shell's recent investor meeting, and it's reasonable to expect the same here.