DAVID BLACKMON IS AN ENERGY WRITER AND CONSULTANT BASED IN TEXAS. HE SPENT 40 YEARS IN THE OIL AND GAS BUSINESS, WHERE HE SPECIALIZED IN PUBLIC POLICY AND COMMUNICATIONS.
ExxonMobil set the climate alarm lobby afire last week when it filed a lawsuit against a pair of activist investor groups challenging manifestly frivolous shareholder initiatives which they hope to bring up at the company’s impending annual meeting in May. The suit was filed in a Texas court January 21 against Massachusetts-based investment firm Arjuna Capital and Amsterdam-based investor group Follow This.
Reports filed by the AP, Reuters, CNBC and other legacy media sites warned that a win by Exxon in the lawsuit could have a “chilling effect” on the bringing of other climate alarm and ESG-related initiatives in the future. The reasoning supporting that claim seems somewhat specious, given that Exxon’s complaint is based on the fact that initiatives virtually identical to the ones sought by Arjuna and Follow This have been brought repeatedly in prior years and were resoundingly rejected in shareholder votes. Raising them again this year is an obvious waste of time and resources and amounts to little more than harassment.
These specific questions, in other words, have been asked and answered several times, leaving little point in raising them again just for the sake of raising them. That hardly would mean that a favorable decision for ExxonMobil in this lawsuit would chill activist investors from raising other, valid questions in the future, but that is the narrative the alarmist lobby and their supportive media have settled on. (RELATED: DAVID BLACKMON: The Biden Admin And Its Buddies Are Waging Foolish War Against Abundant Clean Energy)
Readers may wonder why the company decided to file suit against these two activist investors rather than pursue the more regular appeals process governed by the Biden SEC. The answer is pretty simple: President Biden’s appointees to the SEC decided to change up a decision process that had worked well for decades in order to make it far more difficult and bias the expected outcome in favor of the activist investors. Thus, as Reuters and other outlets note, fewer and fewer companies have pursued their appeals with the SEC over the past few years.
Here is what ExxonMobil said about it in an email to CNBC: “The breakdown of the shareholder proposal process, one that allows proponents to advance their agendas through a flood of proposals, does not serve the interests of investors. We are simply asking the court to apply the SEC’s proxy rules as written to stop this abuse and eliminate the significant resources required to address them.”
Reuters quotes one of the SEC’s own commissioners, Mark Uyeda, as saying, “Companies could always go to court on shareholder proposals, but historically viewed the SEC as a fair arbiter. This perception may have changed due to recent policy changes.” Oh. You don’t say.
So, here’s the moral of this story: When a radical president brings in appointees who destroy a system that was seen as fair by all stakeholders for decades on end and render it a basic kangaroo court, stakeholders are going to seek ways to work around the system.
There is nothing at all wrong with ExxonMobil’s decision to file a lawsuit to block these frivolous proposed resolutions that serve no one’s interests and waste everyone’s time. The company has an absolute right to pursue all remedies available to it, including within the federal courts, even if it upsets the virtue signaling gentry in the climate alarm lobby.
This is neatly analogous to the situation at the Texas border with Mexico, where Biden came into office and immediately issued a series of executive orders that blew up a system of securing the border that had been working quite well and replaced it with a system that basically and intentionally opened the country up to unchecked mass illegal immigration. Now, the administration bemoans the fact that Texas and other states are finding ways to work around his refusal to do anything constructive to slow the flow.
When any presidential administration destroys a system that work and replace them with systems intentionally designed to fail, stakeholders are going to exercise their rights to seek other remedies. That’s all ExxonMobil is doing here, and it should not come as a surprise to anyone.
David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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H/T JS
I am no expert on shareholder meetings, so someone, please enlighten me. What extra cost is there? My naive self imagines someone types it into the ballot form which is mailed out to shareholders. When ballots come back, there’s one more vote to tally. Why not charge shareholders for their proposals?
Are they submitting hundreds of these things, so similar they really are duplicates?
And so what if they propose the same question year after year, and always get voted down, even by 99%? Are shareholder proposals supposed to only be those which are likely to pass?
Clearly no expert. No, the company has to do a lot of work for every proposal. Big companies have divisions with no other task than to manage stockholder relations. Worst is when the proposal is simply designed to harm the company, as these appear to be.
Broadridge Financial Solutions, Inc. (BR) Stock Price, Quote, News & Analysis (seekingalpha.com)
These guys make a lot of money doing the sort of thing being discussed here.
Exactly what do these divisions do?
A shareholder sends in a question for vote. What needs to happen, other than copy it into the ballot?
I understand a corporate division for corporation proposals. But what processing is required for shareholder proposals? Surely the shareholder making a proposal would be highly pissed if the corporation were to change his proposal, “clean it up” or anything.
The company has to analyze the proposal and make determinations on how it will affect the business including revenue, costs, profit/loss, dividends, employment issues such as head counts, wages, union relationships, future investments, etc. And, in the end make a recommendation to share holders on how to vote that would be the in best interest of all stakeholders. All that is far from trivial or inexpensive.
If you have ever directly owned shares in a large corporation you have undoubtedly received information on voting regarding share holder proposals. Usually you get a proxy ballot with the proposals listed and the board’s recommendation on voting. In the old days you would also receive a booklet with in depth analysis of each proposal in very small print and written in financial analyst jargon. These days the detailed info will be on-line and accessible to registered share holders. In either case, no one reads this stuff except for lawyers paid to do so.
Interesting that lazy schmucks would rather downvote my questions than actually answer them.
My question has not been answered. What work is required for shareholder proposals, beyond adding them to the ballot and counting the votes? Why is it wrong to resubmit a proposal year after year, other than being annoying?
It shouldn’t be necessary to say, but I will, in hopes some of the knee-jerk downvoters might deign to answer instead: I detest ecofreaks and burrocrats who think they know better than those with skin in the game. I am not taking the net zero side here. I am just curious.
Shareholders have a right to fiduciary management that produces maximum return on their investment. Shareholders also have a right to make proposals that they feel will help accomplish that. It is entirely proper, since the proposals have been repeatedly made and rejected, for management to enforce the will of the majority of stockholders and stop identical proposals that have already been decided as a waste of time and resources.
You’re on the right track, doonman. Directors are elected by shareholders and represent the interest of the shareholders. Directors can interpret the best interests of the shareholders in a general way, and only submit the bigger questions for shareholder vote.
Certainly they do. But shareholders also have a right to make proposals. Just because a proposal was defeated one year doesn’t mean it can never again be proposed.
“foolish” should have been “malicious”
Much more accurate.
“”When any presidential administration destroys a system that work and replace them with systems intentionally designed to fail….””
Others feel the need to stick their head in the oven too
“”Labour scrapping £28bn green pledge could leave UK colder, sicker and poorer””https://www.theguardian.com/environment/2024/feb/02/labour-scrapping-green-pledge-leave-uk-colder-sicker-poorer
How can we be colder in a warming world?
Has The Guardian ever been logically consistent?
Not since the 70s
The 1870s when it was still The Manchester Guardian?
Built on the proceeds of slavery….
“a system that work and replace them with systems”
Someone didn’t proofread.
The comments by David Blackmon show how exaggerated the beta in politics has become, that is, the wild swings from electing far left and only middle right politicians are slowly but shirley swinging the culture to the left.
Surely that’s not the swinging Shirley I used to date back in the 70s ???
You have to hope that ExxonMobil prevail.
The Texas border situation is an interesting one. The US is, in fact, being invaded. Because the invaders are generally unarmed, often include women and children and isn’t an action taken by another state doesn’t negate the fact that this movement of people is an invasion. By refusing to enforce existing laws on immigration Biden invites impeachment, which should have commenced already.
Biden should definitely be removed from office over his dereliction of duty to enforce the border laws.
Biden is lying when he says it would take new laws to stop the flow of illegal immigrants. The same laws are in place for Biden that were in place for Trump. The difference is Trump enforced the law, and Biden refuses to enforce the law.
The uncontrolled flood of illegal immigrants is Biden’s goal. This is what this delusional man wants. Why? Who the hell knows, he’s delusional.
Any rational person sees this is not the thing to do.
Joe Biden or those pulling his senile old strings are doing their best impersonation of a group of saboteurs trying to take the US back to the Stone Age economically, intellectually, militarily and in all ways relevant to the health and well being of the voters and conspirators who put him in office.
Yes, everything Biden and the radical Democrats do is harmful to the United States.
They are an existential threat to the U.S. Constitution and to our personal freedoms. They will take them away if given the chance.
And the EU seems to be in the same boat .
https://theconservativetreehouse.com/blog/2024/02/03/polish-farmers-plan-solidarity-general-strike-for-next-friday/
Blackmon’s article is dated. The activist investor proposal which included Scope 3 emissions that cover user emissions was withdrawn.
https://irishchronicle.com/business/investors-withdraw-exxon-climate-proposal/
“Reports filed by the AP, Reuters, CNBC and other legacy media sites warned that a win by Exxon in the lawsuit could have a “chilling effect” on the bringing of other climate alarm and ESG-related initiatives in the future.”
************
I most certainly hope so. Bill McKibben immediately comes to mind here.
I wonder if these lamphreys realize that ExxonMobil pays a dividend?
Point being, once they accept a diviend, they are being paid more money by big oil than the skeptics are…
Hypocrisy at it’s finest.
And, evidently, Exxon knew as early as 1954 about the benefits of releasing additional plant food into the atmosphere:
https://www.theguardian.com/us-news/2024/jan/30/fossil-fuel-industry-air-pollution-fund-research-caltech-climate-change-denial
Burn em
I told you their Looney prescriptions would bring them undone-
BP’s green agenda all at sea as sinking profits forecast renews fossil fuel call (msn.com)