Exxon's Meeting Beats a Haircut

Typically, if given a choice between attending an annual meeting and spending a day observing haircuts, I'd make a beeline for Clipper Joe's. For most companies, the yearly mandated gathering of shareholders -- most of which are heavy on corporate employees and light on interested investors -- constitutes little more than perfunctory sessions whose salient activities are the CEO's wooden rendition of the company's circumstances and a rubber stamping of the slate of directors.

Such was not the case, however, at ExxonMobil's (NYSE: XOM  ) Dallas meeting last week. Indeed, the company's shareholders sallied forth with all sorts of proposals for the company's conduct and direction. Included among 15 proffered ballot items were measures dealing with the oversight of executives' pay, objectives for reducing greenhouse gasses, investments in renewable energy, and committing to writing the company's nondiscrimination policy on sexual orientation.

While none of the proposed measures received a 50% affirmation by shareholders, two items topped 47% of the votes. One would have given holders of 10% of the company's outstanding common stock the right to call a special meeting of stockholders; the other would allow the company to recoup unjustified incentive bonuses. Two others topped 40%: One that would have given shareholders an advisory vote on executive pay and another that would have split the CEO and chairman positions.

But perhaps the most contentious items were a proposal demanding that the company adopt goals for reducing greenhouse gases and a claim that the company is funding "global warming deniers." In the latter area, Exxon reportedly contributes about $2 million a year to groups that question the cause of global warming.

While there were other significant measures proposed at the meeting, I would note that ExxonMobil and its peers, including ConocoPhillips (NYSE: COP  ) , BP (NYSE: BP  ) , Chevron (NYSE: CVX  ) , and Royal Dutch Shell (NYSE: RDSa  ) (NYSE: RDSb  ) , have a tough row to hoe. Despite an expected need for the world's producers to add more than 40% to global oil production in just the next couple of decades, these companies must contend with difficult political circumstances in places like Venezuela, Nigeria, and Russia. Further, they must attempt to deal with the declining production rates that now characterize many of the world's major fields.

And, while I'm as environmentally concerned as the next person, I also fear the day when crude oil demand exceeds worldwide production by 5%, or 10%, or 20%. I'd therefore urge Fools to get to know all the companies above, and to bear in mind the progressively slicker tightropes on which they are operating.

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Fool contributor David Lee Smith does not own shares in any of the companies mentioned. He welcomes your questions or comments. The Fool's disclosure policy is never maddening.


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