New York City pension funds proxy access campaign success

US investors passed the first shareholder resolution in a decade at ExxonMobil when they voted to back the proxy access resolution at its recent AGM. The non-binding resolution called for the oil company to give investors that have jointly held at least 3% of its common stock for at least three years the ability to nominate directors using the corporate ballot.

The resolution was filed by the New York City Pension Funds and received 61.9% preliminary support. Scott Stringer, the New York City Comptroller said, “Investors have sent a message that they want a meaningful voice in electing who sits on ExxonMobil’s board. This vote is the signal event of the proxy season and a watershed moment for ExxonMobil’s shareowners. If this company is to properly address fundamental long-term risks like climate change, its board of directors must be diverse, independent, and accountable. I urge the board to move quickly, engage directly with shareowners, and enact proxy access.”

For the past 18 months the New York City Pension Funds have been engaging in a campaign called the Boardroom Accountability Project to improve the rights of investors to nominate directors. Since that time Stringer said that more than 215 US companies have enacted meaningful proxy access bylaws, including other energy companies, such as Chevron, Conoco Philips, Occidental Petroleum, Anadarko Petroleum, and EOG Resources. Many companies have also voluntarily enacted proxy access without the need for a vote, including more than 70% of the 72 companies that received proposals from the New York City Pension Funds for the 2016 proxy season.

The ExxonMobil board had urged shareholders to vote against the resolution. The company had argued that the proposal risked undercutting the critical role that its independent board affairs committee played in ensuring that, through well-established, rigorous processes, the board is comprised of personnel with required skills, backgrounds and competencies and that the calibre and effectiveness of the board could be diminished over time.

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