Shareholders Win; Environmentalists Lose at Exxon Meeting

In a widely anticipated showdown, that garnered much media attention, Exxon Mobil (NYSE: XOM) Chairman and CEO Rex Tillerson will retain both his jobs, despite the best efforts of the Rockefeller family. The Rockefellers wanted to appoint an independent director and strip Tillerson of his chairman title. Rockefeller pressed Exxon to invest more money into alternative energy technology and take a longer- term perspective, instead of focusing on just making large profits now.

According to the Associated Press report:

All of Exxon Mobil’s acknowledged strengths are no guarantee it will remain flexible and visionary in light of the changing energy realities that lie ahead, said Peter O’Neill, a great-great grandson of John D. Rockefeller. That’s why we support our company having an independent chair. We are looking forward.

Even with all the media attention leading up to the vote, those in favor of splitting the Chairman/CEO role managed to get only 39.5% of shareholder support. That’s a bit worse than they managed to get last year. This is ironic considering all of the hysteria regarding global warming and the need for alternative sources of energy.

 Common sense and Exxon’s commitment to provide shareholder value won out over suspect science and hysteria. The responsibility of a publicly traded company is to provide value and maximize profits. Exxon has been skeptical all along about pouring billions of dollars into alternative energy development. If alternatives to crude oil actually prove be cost efficient and profitable to produce, I would look to Exxon to make an acquisition in the space. However, as long as production costs remain high, and the actual energy output remains small, look for Exxon to focus solely on investment technologies to help reduce costs and increase recovery rates about crude.

Disclosure: The author’s fund has no position in any stock mentioned as of May 29, 2008.

Comments

[barnburner:]

Suspect science (?), whose, the oil companies or the worldwide scientific community?

2008 May 29 10:45 AM

[Tom B:]

"Common sense and Exxon’s commitment to provide shareholder value won out over suspect science and hysteria. The responsibility of a publicly traded company is to provide value and maximize profits. Exxon has been skeptical all along about pouring billions of dollars into alternative energy development. If alternatives to crude oil actually prove be cost efficient and profitable to produce, I would look to Exxon to make an acquisition in the space"

Aaron, you an ostrich and shouldn't be writing energy articles.

2008 May 29 11:14 AM

[aquaculture:]

Green chip stock guru Jeff Siegel puts it this way:

"Renewable energy opponents often make the argument that if it can't work without subsidies and tax breaks, then it must not be a good business model.
We could'nt agree more.
So lets cut every last cent that you and I (the taxpayers) pay to the oil companies via all those tax breaks, subsidies and overall support.
Why should any of us have to pay TO SECURE THE SHIPPING LANES so they can move that oil from point A to point B.
Thats an operational expense folks, not a justifiable tax!
Let the oil companies pass that cost- a cost they must incur to do business- on to the consumer.
Let the price of everything we eat, consume, transport triple or quadruple and then see how fast alternatives fill the void!
Let them pay to find more oil too. That's not our job.
eg in 2006 U.S. taxpayers loaned more than 2 $ Billion directly to oil companies to help them extract, refine and transport oil in Algeria, Colombia and Russia. How does that make you feel?"

"Common sense and shareholder value won out over suspect science and hysteria."

Common sense?
Denmark (windpower) joined your country in designing an energy-smart electr. personal transportation system.
PHEV electr. driving is @ 54 $ cents/gallon gas eq. in the U.S.

Shareholder value? On a Green chip recommendation I added prior Q1 2008 Vestas (VWS) @ 68, now 86 Euro's

Suspect science? uggh..............

What hysteria? Goldman Sachs' 200 $/barrel oil? Super price spikes? Major supply disruptions? Iran?

2008 May 30 06:40 AM

[rrrus:]

I recently greatly reduced my position in XOM, held since the 1960s. For most of that period a respectable rate dividend was paid. After watching buyback after buyback with questionable benefit to public shareholders, I am now hoping for a dip in major oil stocks to re-establish my weighting in energy by adding to my positions in high dividend payer BP and faster growers CVX and COP. As XOM accumulates more and more cash, the more likely that it will be spent foolishly or taxed more severely by the government.

2008 May 30 09:11 PM

[oilsands:]

What a bunch of stupid nonsense: rejecting profits in alternative energy, suspect science. Disgusting.

2008 May 31 11:15 PM