Reviewing the service of independent directors on boards of other companies, including requests to accept a seat on any additional company board;
Establishing and maintaining procedures for interested parties to communicate with independent directors;
Considering Board governance practices and procedures including any changes to governance guidelines; and
Providing oversight of the performance and establishes hiseffectiveness of the annual evaluation process for the Board and its committees.
The Board’s Compensation Committee also independently reviews CEO performance and compensation the result of which is reviewedand conducts a review with the full Board, absent the Chairman.
ITEM 5 – CLIMATE EXPERT ON BOARD
This proposal was submitted byIn addition, the Province of St. JosephLead Director, working together with the Compensation Committee, oversees the annual evaluation of the Capuchin Order, 1015 North Ninth Street, Milwaukee, WI 53233,CEO, the beneficial ownercommunication of at least $2,000resulting feedback to the CEO, and the review of CEO succession plans.
Importantly, only a minority of S&P 500 companies have adopted an independent chairman. This was evidenced in market valuethe 2019Spencer Stuart Board Index, which examines the latest data and trends among the S&P 500 for board composition, governance practices, and director compensation. The Index noted that only 34 percent of S&P 500 boards have a chairman that meets the New York Stock Exchange rules for independence.
To maintain alignment with the substantial majority of S&P 500 boards, ensure continuation of the Company’s stock and lead proponentsignificant shareholder benefits of a filing group.
“Climate change expertise at both managementcombined Chairman/CEO role, and board levels is criticalpreserve the Board’s flexibility to companies’ success indetermine the energy industry because of significant environmental issues associated with their operations. These impactappropriate leadership and oversight structure, shareholders lenders, host country governments and regulators, as well as affected communities. Companies’ ability to demonstrate policies and best practices reflecting internationally accepted environmental standards can lead either to successful business planning or difficulties in raising new capital and obtaining the necessary licenses from regulators.
We believe ExxonMobil’s Board of Directors would benefit by addressing the impact of climate change on its business at its most strategic level by electing to its Board independent specialists versed in all business aspects of climate change. Just one authoritative figure with acknowledged expertise and standing could perform a valuable role in ways that would enable the Board to more effectively address the environmental issues and risks inherent in its present business model regarding climate change. It would also help ensure that the highest levels of attention are focused on developing environmental standards for new projects. In comparison, banks which had inadequate expertise on their boards to deal with risks related to new financial instruments and transactions often paid a huge price with a major impact on shareholder value.
Since the Exxon Valdez incident, the public’s perception of ExxonMobil represents a company with questionable environmental practices. For years some shareholders concerned about ExxonMobil’s approach to climate change have asked to engage directly with members of its Board; consistently they have been deniedshould reject this access to dialogue on matters of critical concern regarding climate change.
RESOLVED, shareholders request that, as elected board directors’ terms of office expire, the Exxon Mobil Corporation’s Board’s Nominating Committee nominate for Board election at least one candidate who:
has a high level of climate change expertise and experience in environmental matters relevant to hydrocarbon exploration and production, related risks, and alternative, renewable energy sources and is widely recognized in the business and environmental communities as such, as reasonably determined by ExxonMobil’s Board, and
will qualify, subject to exceptions in extraordinary circumstances explicitly specified by the board, as an independent director.*
* a director shall not be considered ‘independent’ if, during the last three years, she or he –
was, or is affiliated with a company that was an advisor or consultant to the Company;
was employed by or had a personal service contract(s) with the Company or its senior management;
was affiliated with a company or non-profit entity that received the greater of $2 million or 2% of its gross annual revenues from the Company;
had a business relationship with the Company worth at least $100,000 annually;
has been employed by a public company at which an executive officer of the Company serves as a director;
had a relationship of the sorts described herein with any affiliate of the Company; and
was a spouse, parent, child, sibling or in-law of any person described above.”
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil’s current process, as reflected in itsGuidelines for the Selection of Non-Employee Directors, requires director candidates to have a breadth of experience and demonstrated expertise in managing large, relatively complex organizations and be accustomed to dealing with complex situations with worldwide scope.
The Board must possess the capabilities to address the full range of business risks, from financial to social to environmental, including climate risk. In doing so, the Board leverages subject matter experts, both internally and externally, to share the latest science, analysis, and insights.
Because each director must possess a breadth of expertise and experience, setting aside a seat for an environmental specialist or other single-issue candidate who lacks other important attributes would, in our view, not be in the best interests of the Company or its shareholders because it would dilute the breadth needed by all directors to make informed decisions for the Company. Board members have fiduciary duties to the Company’s shareholders which require them to be informed on multiple issues and work together with other Board members to make decisions on a collaborative basis.
The Board is comprised of members with the credentials, proficiencies, and experience that enable the Board to effectively address climate-related issues. Board members hold nine science and engineering degrees and have relevant experience and leadership in a range of environmental matters, such as water, alternative energies, energy conservation, global climate issue management, and environmental innovation. Further, the Board has access to environmental and climate expertise via periodic briefings by Company professionals whose primary expertise is in the area of environmental management and stewardship. This includes sharing external perspectives on the status of science, research and development, and public policy.
The Company’s core value to ‘Protect Tomorrow, Today’ serves as a foundation for sound environmental management. OurOperations Integrity Management System is an effective and proven framework that aligns our environmental priorities with our business objectives, and has brought about improved environmental performance for many years.proposal.
ITEM 6 — HIRE AN INVESTMENT BANKItem 5 – Special Shareholder Meetings
This proposal was submitted by Kenneth Steiner, 14 Stoner Ave., 2M, Great Neck, NY 11021, the beneficial owner of 500 shares.
“[XOM: Rule 14a-8 Proposal December 30, 2015]
Proposal [6]5 – Hire an investment bankEnable Special Shareholder Meeting without the Need to go to Court
Shareholders recommendask our company hire an investment bank to explore the sale of our company. This would include a sale by dividing the company into major pieces to facilitate such a sale.
I believe the sale of XOM would release significantly more value to the shareholders than the current share price. Our stock was trading above $100 in 2014 and it went below $75 in 2015.
Hire an investment bank – Proposal [6]”
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil pursues business strategies that maximize long-term shareholder value. The Company also manages its assets and business segments with a focus on profitability to ensure that acceptable financial performance is achieved. This asset management discipline includes considering the sale of assets or businesses when such divestments yield the highest value for shareholders. This financial discipline has led to the sale of over $45 billion of assets and businesses over the past 10 years.
On an ongoing basis, ExxonMobil considers a wide range of strategies and business structures, as a fundamental responsibility of the Corporation’s management.
Since the Exxon-Mobil merger, the Company has returned $357 billion to shareholders through dividends and share purchases, which is greater than the market capitalization of 496 of the S&P 500 companies. This has been done in a sustainable manner without having to dismantle the Company or undermine its business model, and has rewarded long-term shareholders with returns in excess of the S&P 500.
ITEM 7 – PROXY ACCESS BYLAW
This proposal was submitted by the New York City Employees’ Retirement System, the New York City Fire Department Pension Fund, the New York City Teachers’ Retirement System, the New York City Police Pension Fund,
and the New York City Board of Education Retirement System (the “Systems”), One Centre Street, Room 629, New York, NY 10007, the beneficial owners of 7,168,317 shares.
“RESOLVED: Shareholders of Exxon Mobil Corporation (the ‘Company’) ask the board of directors (the ‘Board’) to take the steps necessary to adoptamend our bylaws and appropriate governing documents to give the owners of a ‘proxy access’ bylaw. Suchtotal of 10% of our outstanding common stock the power to call a bylaw shallspecial shareholder meeting (or the closest percentage to 10% according to state law) without the current requirement to petition a court in order to do so. The Board of Directors would continue to have its existing power to call a special meeting.
Exxon Mobil is in a small minority of companies that require the Companyshareholders to includego to court in proxy materials preparedorder to call for a special shareholder meeting. Plus Exxon Mobil has an unlimited budget to oppose such a request in court and shareholders do not have any such a budget.
This proposal topic won 42%-support at our 2019 annual meeting. This was a significant increase from 36%-support in 2018.
A more accessible shareholder ability to call a special meeting at which directors arewould put shareholders in a better position to be electedgive continuing input on improving the name, Disclosure and Statement (as defined herein)makeup of any person nominated forour board of directors. Calling a special meeting is also a means shareholders can use to raise important matters outside the normal annual meeting cycle like the election toof a new director.
This topic is more important since we have no oversight of our CEO by an independent Board Chairman. Our combined Chairman/CEO, Darren Woods was rejected by the board by a shareholder or group (the ‘Nominator’) that meets the criteria established below. The Company shall allow shareholders to vote on such nominee on the Company’s proxy card.
The3rd highest number of shareholder-nominated candidates appearingshares in proxy materials shall2019. Meanwhile Mr. Woods’ total pay was $15 million. Ursula Burns, who chaired the Exxon audit committee, was rejected by 27% of shares in 2019 and Steven Reinemund was rejected by 14% of shares.
Mark Zuckerberg, Jeff Immelt, Elon Musk and Dennis Muilenburg are examples of problems with concentrating too much power in one person. Plus we apparently do not exceed one quarter of the directors then serving. This bylaw, which shall supplement existing rights under Company bylaws, should provide thathave a Nominator must:Lead Director as this title does not even appear in our 2019 proxy. Our stock price is down from $100 in 2013.
a) | have beneficially owned 3% or more of the Company’s outstanding common stock continuously for at least three years before submitting the nomination; | | | | | |
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c) | certify that (i) it will assume liability stemming from any legal or regulatory violation arising out of the Nominator’s communications with the Company shareholders, including the Disclosure and Statement; (ii) it will comply with all applicable laws and regulations if it uses soliciting material other than the Company’s proxy materials; and (iii) to the best of its knowledge, the required shares were acquired in the ordinary course of business and not to change or influence control at the Company. |
The Nominator may submit with the DisclosureA more accessible shareholder ability to call a statement not exceeding 500 words in support of each nominee (the ‘Statement’). The Board shall adopt procedures for promptly resolving disputes over whether notice of a nomination was timely, whether the Disclosure and Statement satisfy the bylaw and applicable federal regulations, and the priorityspecial meeting is more important because our right to be given to multiple nominations exceeding the one-quarter limit.
SUPPORTING STATEMENT
We believeshareholder proxy access may be out of reach since it can only be used by 20 shareholders who have owned a total of $30 billion of Exxon Mobil stock continuously for3-years. If a group of 20 shareholders is a fundamental shareholder right that will make directors more accountable and enhance shareholder value. A 2014 CFA Institute study concluded that proxy access would ‘benefit both$1 short of meeting this enormous $30 billion requirement – the markets and corporate boardrooms, with little cost or disruption’ and could raise overall US market capitalization by upgroup is totally out of luck.
Please vote yes:
Enable Special Shareholder Meeting without the Need to $140.3 billion if adopted market-wide. (http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2014.n9.1)
The proposed terms are similargo to those in vacated SEC Rule 14a-11 (https://www.sec.gov/rules/final/2010/33-9136.pdf). The SEC, following extensive analysis and input from companies and investors, determined that those terms struck the proper balance of providing shareholders with a viable proxy access right while containing appropriate safeguards.
A similar proposal received 49.40% of votes cast at the Company’s 2015 annual meeting and similar bylaws have been adopted by more than 80 companies.
We urge shareholders to vote FOR this proposal.Court – Proposal 5”
The Board recommends you vote AGAINST this proposal for the following reasons:
The Board agrees with the underlying objective of maintaining a highly qualified and independent Board by accessing a broad pool of candidates who have experiences and capabilities that are complementarybelieves it is important for shareholders to the scope and complexity of the Company’s business. While the Board is fully aligned with the underlying objective, it believes that the long proven processes currently in place provide a more effective outcome than what is being proposed by the proponents and that the proposal presents potential risks to the Company and its shareholders.
The Board takes its duty as a fiduciary of the Company seriously and has processes in place to ensure that all shareholder interests are well represented. Twelve out of the fourteen Board nominees are independent and have
been selected based upon Board-adopted, published guidelines and processes that are intended to yield a Board comprised of the most highly qualified business and professional leaders. The high voter tallies that our directors receive year-on-year suggest that shareholders are pleased with the quality of our Board members and demonstrate the effectiveness of the established processes.
The proposal risks undercutting the critical role that the independent Board Affairs Committee plays in ensuring that, through well-established, rigorous processes, the Board is comprised of personnel with required skills, backgrounds and competencies. Introducing a novel selection process, as the proposal seeks to do, risks diminishing the caliber and effectiveness of the Board over time and the ability of the Company to attract the kinds of leaders to its Board that shareholders have come to expect. Furthermore, directors who recommend candidates for election each year under these processes do so with a legal duty to all shareholders and act in the best interests of the Company. It is unclear what duty applies to the selection of proxy candidates under the proposal.
The proposal additionally risks introducing non-constructive and destabilizing dynamics into the Board election process. Some whom the Company has spoken with as result of its expansive engagement with shareholders on the issue say that a nomination under proxy access does not necessarily mean that the candidate will be elected. However, there is little experience in the United States with how proxy access will work, and the practice here may vary considerably from other jurisdictions where proxy access currently exists. At a minimum, the process may result in a proxy contest, which history suggests can be costly, fractious, distracting, and lead to results that are not in the best interests of the Company or its shareholders. Further, we do not believe that there is any meaningful evidence that proxy access would improve corporate governance or enhance market capitalization.
Perhaps most concerning is the potential risk for the proposal to increase the influence of special interest groups and lead to single-issue participants on the Board. The Board believes that directors should represent all of the Company’s shareholders, not just those who propose them for election. The proposal, however well intentioned, may be misused by shareholder groups to address various single issues that individually or collectively could undermine a business model that has long served the interests of our shareholders well. The potential for a series of directors who rotate from one single issue to another can also undermine the long-term focus the Company seeks to foster in its management and Board, consistent with its business strategy and required investment horizons.
It is also important to reinforce that shareholders already have an important role in determining who is on the Board. Directors are required to stand for election each year and shareholders can evidence their support or concern regarding individual Board members by vote during the annual shareholders meeting, and the Company has a stringent resignation policy required of any director who fails to receive a majority of “for” votes. Also, shareholders have the right to suggest non-employeecall a special shareholder meeting, a right ExxonMobil currently provides. ExxonMobil shareholders holding at least 15 percent of shares outstanding may call a special meeting in accordance with recently amended Corporate Governance Guidelines. No court petition is required.
Shareholder interests are further protected by a strong, independent Board candidatesresponsible for consideration,the oversight of management, including the CEO. Effective leadership is also provided by an independent Lead Director with expansive oversight responsibilities. In each of the last two years, shareholders recognized the strong leadership and these suggestions are considered in the same manner as other candidate recommendations, whether from Board members,independence of the Board Affairs Committee’s independent search firm, or from other sources. Throughwith an average vote in favor of all directors of more than 93 percent.
ExxonMobil’s current Corporate Governance Guidelines allow for shareholders of at least 15 percent of common stock outstanding to call a special meeting without the Company’s ongoing engagement process,need for a court petition, which provides a meaningful and more advantageous shareholder right than mostlarge-cap companies. Many companies that provide shareholders also have an opportunitythe right to share their views and to influence Company policies and approaches.call a special shareholder meeting do so at a much higher threshold. The most common threshold among S&P 500 companies is 25 percent.
ExxonMobil has demonstrated a track record of engagement with and responsiveness to shareholders, established strong Board and governance practices, and continues to maintain long-term industry-leading returns for our shareholders. Our current governance practices provide strong Board accountability and important shareholder rights. We believe that instead of strengthening our existing practices, the proposal could undermine the rigorous and effective processes we have in place.
Through the Company’s ongoing engagement with shareholders this past year,Therefore, the Board has heard a broad range of views regardingbelieves this proposal. The Board appreciates all shareholder views on the matter, and while it continues to consider the merits of the proposal in light of the Company’s ongoing engagement, it believes, for the reasons discussed above, that the proposal is not in the best interests of the Company at this time.unnecessary.
ITEM 8Item 6 – REPORT ON COMPENSATION FOR WOMENReport on Environmental Expenditures
This proposal was submitted by Eve S. Sprunt, PhD, 3753 Oakhurst Way, Dublin, CA 94568,Steven Milloy, 12309 Briarbush Lane, Potomac, MD 20854, the beneficial owner of at least $2,000250 shares.
“Greenwashing Audit
Resolved:
Shareholders request that, beginning in market value2020, ExxonMobil publish an annual report of the Company’s stock.incurred costs and associated significant and actual benefits that have accrued to shareholders, the public health and the environment, including the global climate, from the company’s environment-related activities that are voluntary and that exceed U.S. and foreign compliance and regulatory requirements. The report should be prepared at reasonable cost and omit proprietary information.
“RESOLVED,Supporting Statement:
The resolution is intended to help shareholders monitor and evaluate whether the company’s voluntary activities and expenditures touted as protecting the public health and environment are producing actual and meaningful benefits to shareholders, the public health and the environment, including global climate.
Corporate managements sometimes engage in the practice of ‘greenwashing,’ which is defined as the expenditure of shareholder assets on ostensibly environment-related activities but actually undertaken merely for the purpose of improving the company’s or management’s public image.
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We also monitor and manage ongoing integrity through periodic checks on key aspects of facility structures, including adopting learnings from recent extreme weather events as part of ongoing engineering evaluations. These evaluations include the use of engineering assessments to identify potential impacts on critical systems, such as facilities for storm water handling and upgrades of electrical systems. Enhancements could involve procedural revisions and / or changes in equipment design to help ensure resiliency.
The Company publicly shares its guidelines, measures, and practices to assess and mitigate risk factors, and includes the information requested by the proponent in itsEnergy & Carbon Summary publication.
Based on the Company’s extensive experience and well-established processes, that have allowed us to successfully advance women on a global basis.
Within ExxonMobil, compensation, developmentprocedures, and advancement are highly integrated. As an individual advances through various career stages, pay grade and total compensation will advance accordingly. The program compensates each individual at a level commensurate with individual performance, experience, and pay grade, independent of gender. This ensures alignment of compensation among employees with similar performance who are in jobs of similar scope and complexity.
Withindisclosures, the Board believes this context, metrics that measure the progress in development and advancement of women are more meaningful.
ExxonMobil develops future leaders from within the Company worldwide, drawing upon our diverse employee population. We promote leadership opportunities for women and work to improve the gender balance within the Company through all aspects of the employment relationship, including recruitment, training, advancement and salary administration.
At multiple times during the year, management discusses efforts in the area of diversity talent development, which includes both stewardship of metrics and a review of specific development plans. These reviews take place at multiple levels within the organization and include representatives of senior management.
Robust development processes and rigorous management reviews, scheduled throughout the year, allow us to advance our goal of drawing from the most diverse and most qualified pool of candidates for each position at each level within the organization.
TheCorporate Citizenship Report (CCR), published by the Company on an annual basis, includes detailed information on our workforce demographics and provides additional information on our comprehensive diversity and inclusion efforts.
Key headlines from the 2015CCR:
28 percent of our worldwide workforce are women.
Over the last 10 years, 40 percent of management and professional new hires were women.
Within the executive employee population, which represents the top 2.4 percent of our worldwide workforce, 17 percent are women. This represents an increase of 50 percent over the past decade.
This increaseproposal is a result of continued focus on early identification and focused development of high-performing female employees. Notably, 29 percent of our early career stage executive employees worldwide are women.
Our commitment extends to our support of organizations that aim to expand women’s economic opportunities as well as bolster women in science and engineering.
We believe that a focus on all aspects of the development path supported by a consistently applied compensation program will continue to result in a strong and diverse pool of highly qualified talent. We view the metrics that are disclosed in ourCorporate Citizenship Report to be more meaningful to shareholders as they better represent our development model.unnecessary.
ITEM 9Item 8 – REPORT ON LOBBYINGReport on Political Contributions
This proposal was submitted by the Unitarian Universalist Association, 24 Farnsworth Street, Boston, MA 02210, the beneficial owners of 87 shares and lead proponent of a filing group.
“Resolved, that the shareholders of Exxon Mobil Corp. (‘Exxon’ or ‘Company’) hereby request that the Company prepare and semiannually update a report, which shall be presented to the pertinent board of directors committee and posted on the Company’s website, disclosing the Company’s:
| (a) | Policies and procedures for making electoral contributions and expenditures (direct and indirect) with corporate funds, including the board’s role (if any) in that process; and |
| (b) | Monetary andnon-monetary contributions or expenditures that could not be deducted as an ‘ordinary and necessary’ business expense under section 162(e)(1)(B) of the Internal Revenue Code, including (but not limited to) contributions or expenditures on behalf of candidates, parties, and committees and entities organized and operating under section 501(c)(4) of the Internal Revenue Code, as well as the portion of any dues or payments made to anytax-exempt organization (such as a trade association) used for an expenditure or contribution that, if made directly by the Company, would not be deductible under section 162(e)(1)(B) of the Internal Revenue Code. |
The report shall be made available within 12 months of the annual meeting and identify all recipients and the amount paid to each recipient from Company funds. This proposal does not encompass lobbying spending.
Supporting Statement
As long-term Exxon shareholders, we support transparency and accountability in corporate electoral spending. Disclosure is in the best interest of the Company and its shareholders. The Supreme Court recognized this in its 2010 Citizens United decision, which said, ‘[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.’
Publicly available records show Exxon has contributed at least $12,900,000 in corporate funds since the 2010 election cycle. (CQMoneyLine:http://moneyline.cq.com; National Institute on Money in State Politics:http://www.followthemoney.org).
We acknowledge that Exxon publicly discloses a policy on corporate political spending and its direct contributions to candidates, parties, and committees. We believe this is deficient because Exxon does not disclose the following:
A full list of trade associations to which it belongs and thenon-deductible portion under section 162(e)(1)(B) of the dues paid to each; and
Payments to other third-party organizations, including those organized under section 501(c)(4) of the Internal Revenue Code, that could be used for election-related purposes.
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ExxonMobil publicly reports, on a quarterly basis, to the U.S. Congress its federal lobbying expenses and the specific issues lobbied. The reports are accessible to the general public on the U.S. Senate’s website atsenate.gov. Lobby reports are also filed with state and local jurisdictions as required by law.
ExxonMobil also provides support to a variety of think tanks, trade associations, and coalitions in order to promote informed dialogue and sound public policy on matters pertinent to the Corporation’s interests. Some of the support provided to these organizations may be used by the firms for lobbying. The total figure reported in ExxonMobil’s public LobbyLobbying Disclosure Act filings includes expenses associated with the costs of employee federal lobbying, as well as those portions of payments to trade associations, coalitions and think tanks that are spent on federal lobbying.
The Corporation believes the rigor of these requirements provides sufficient transparency and accountability of our public advocacy activities All reports are accessible to the general public including shareholders. The Congresson the U.S. Senate website atwww.senate.gov. More recently filed reports are also posted on the Company website atexxonmobil.com/company/policy/political-contributions-and-lobbying. Furthermore, ExxonMobil, and Executive Branch areits employees involved in lobbying, file lobby disclosure reports at the appropriate recipients of the proponent’s specific positions on our nation’s policyfederal, state and local level, in accordance with all applicable disclosure laws, and any reforms they seek.laws. Requiring additional disclosure would hold ExxonMobil to a different standard than other groups engaging in similar lobbying activities.
The Corporation has an established practiceCompany’s contributions to determine which public policy issues are important to ExxonMobil, which includes gaining input from affected business linestrade associations and functional departments such as Law and Public and Government Affairs. Key issues are reviewed by the Management Committee and Board of Directors of the Corporation. ExxonMobil’s position on key policy issues are posted in the Current Issues section atexxonmobil.com, and our lobbying activities are aligned with those positions. In addition, our policy and procedures governing lobbying, including oversight, can be found in the Accountability section of the same website. We believe detailed disclosures concerning internal deliberations on public policy issues could be competitively harmful, and would be of questionable utility to shareholders.
ExxonMobil promotes discussion on issues of direct relevance to the Company. We contribute to a wide range of academic and policyother organizations that research and promote dialogue on significant domestic and foreign policy issues. Our contributions do not constitute an endorsement of every public policy position or point of view expressed by a recipient organization. As is true of all non-profits we support, we conductnonprofit groups the Company supports, an annual evaluation of the merits of each organization is conducted, and reservethe Company reserves the right to initiate, sustain, or withdraw support at any time.
ExxonMobil believes that the risks of climate change are serious and warrant thoughtful action. Managing these risks requires innovation and collaboration. We are dedicated to working to reduce the risks of climate changeExisting disclosure laws provide consistent transparency for all parties involved in the political process. As such, the Board believes the proponent’s specific positions on lobbying disclosure included in this proposal are more appropriately addressed to the U.S. Congress, the Executive Branch, and state and local governments. For this reason, and others stated above, the Board recommends voting against this proposal.
PAY RATIO
Annual total CEO compensation for 2019 was $23,529,292. The median of annual total compensation of all employees of the Corporation, except the CEO, for 2019 was $173,712. The ratio of annual total CEO compensation to the median of annual total compensation of all employees was 135:1.
The median employee was identified as of October 1, 2019, based on total taxable wages for the most efficient wayrecently completed prior fiscal year as shown in the Corporation’s records. No estimates or sampling methodologies were used for society, while recognizing the importance of reliable and affordable energy in supporting economic growth. We actively engage in constructive dialogue on climate change policy with a wide variety of stakeholders, including governments, non-governmental organizations, academiathis purpose. Nocost-of-living adjustments were made and the public.taxable wages of employees employed for less than the full fiscal year were not annualized. “Employees” were defined based on applicable employment and tax laws.
Policymakers around the world currently are considering a varietyFor purposes of legislative proposals and regulatory options related to climate policies. ExxonMobil advocates an approach that ensures a uniform and predictable cost of carbon; allows market prices to drive solutions; maximizes transparency to stakeholders; reduces administrative complexity; promotes global participation; and is easily adjusted to future developments in climate science and policy impacts. We continue to believe a revenue-neutral carbon tax is better able to accommodate these key criteria.
ExxonMobil updates shareholders annually on our views on climate change and how the Company plans capital expenditures, assesses and plans for policies limiting greenhouse gas emissions, and works to reduce emissionsthis disclosure, as part of theCorporate Citizenship Report. The Company also periodically responds to specific shareholder requests. Currently available reports and responses are viewable onexxonmobil.com.
A robust civil society requires the airing of different voices and perspectives as part of the nation’s ongoing public policy debate. In light of the importance and implications of sound public policies, ExxonMobil will continue to engage actively with stakeholders who have an interest in key issues that affect the Company and industry.
ITEM 10 – INCREASE CAPITAL DISTRIBUTIONS
This proposal was submittedpermitted by Eric McCallum, a client of Arjuna Capital/Baldwin Brothers Inc., 204 Spring Street, Marion, MA 02738, the beneficial owner of 200 shares.
“Capital Distributions
WHEREAS:
In the face of global climate change, we believe investor capital is at risk from investments in projects that may prove economically stranded and unburnable if fossil fuel demand is reduced through public policy carbon restrictions, pricing and competition from renewables.
Global governments have agreed ‘the increase in global temperature should be below 2 degrees Celsius.’ The International Energy Agency states, ‘No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2º C goal.’
In 2015 Citigroup estimatedSEC rules, the value of unburnable fossil fuel reserves could amount to over 100 trillion dollars out to 2050:non-discriminatory benefits is included in annual total compensation of both the median employee and the CEO. Thesenon-discriminatory benefits are long-term disability plan; basic life insurance and accidental death and dismemberment; medical plan; and dental plan.
‘Lessons learned from the strandingIncluding these benefits provides a more accurate compensation ratio. Since SEC rules do not require inclusion of assets via the recent fallthese generally available benefits in the oil price gives food for thought about whatSummary Compensation Table, annual total CEO compensation shown above is slightly higher than the impact of the introduction of carbon pricing (or similar measures from Paris COP21) on higher-cost fossil fuel reserves might be.’
The industry cancelled approximately 200 billion dollars of capexTotal CEO Compensation shown in 2015 (Wood Mackenzie). The Carbon Tracker Initiative (CTI) estimates 2 trillion dollars of industry capex and 72.9 percent of ExxonMobil’s capex is ‘unneeded’ if we are to achieve a 2 degree pathway.
Massive production cost inflation over the past decade has made the industry vulnerable to a downturn in demand and oil prices.
A decade of cost escalation and the recent decline in oil prices has eroded the sector’s returns on equity to a record 29 year low (Citigroup).
Major new project costs have recently averaged between 70 and 100 dollars per barrel, raising the risk of stranded, unprofitable assets (Goldman Sachs).
A ‘capex crisis’ has increased upstream oil investment 100 percent (2005 to 2013), while crude oil supply has increased only 3 percent (Kepler Cheuvreux).
Analysts indicate companies may not be adequately accounting for or disclosing downside risks from lower than expected demand and prices.
The equity valuation of oil producers could drop 40 to 60 percent under a low carbon scenario (HSBC).
Approximately 40 percent of current oil investments are stranded at prices below 75 dollars per barrel in the current price environment (Citigroup).
Approximately 44 percent percent of Exxon’s potential future product portfolio (2014 to 2050) requires an oil price of 75 dollars per barrel to be economical (CTI).
Investors are concerned ExxonMobil risks eroding shareholder value through investments in what may prove stranded, uneconomical assets in a low carbon demand scenario. Exxon’s capital expenditures grew at a
compound annual growth rate of 9 percent from 2005 to 2014, coinciding with a 1 percent net income decline. Exxon cut total capital distributions (summing dividends and share buybacks) to shareholders approximately 25 percent over the last twelve months.
RESOLVED:Shareholders hereby approve, on an advisory basis, a proposal that ExxonMobil commit to increasing the total amount authorized for capital distributions (summing dividends and share buybacks) to shareholders as a prudent use of investor capital in light of the climate change related risks of stranded carbon assets.”
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil published the report,Energy and Carbon – Managing the Risks, to address questions raised on the topic of global energy demand and supply, climate change policy and carbon asset risks. This report further described how the Company integrates consideration of climate change risks into planning processes and investment evaluation. The Board is confident that the Company’s robust planning and investment processes adequately contemplate and address climate change related risks.
Each year, we update our long-term energy demand projection in ourOutlook for Energy – taking into account the most up-to-date demographic, economic, technological, and climate policy information available. This analysis serves as a foundation for our long-term business strategies and investments, and is generally consistent with other forecasting organizations such as the International Energy Agency. OurOutlook by no means represents a “business as usual” case and it includes a significant reduction in projected energy use and greenhouse gas (GHG) emissions due to energy efficiency initiatives. Because we assume policy action will become increasingly more stringent over time, ourOutlook projects lower future energy-related CO2 emissions through 2040 than would be implied by a “no policy scenario” where limited GHG reduction policies and regulations are implemented.
ExxonMobil maintains a disciplined capital allocation approach with a long-term horizon. Our commitment to shareholders is to invest in attractive business opportunities and pay a reliable and growing dividend. Across the business cycle, we manage cash by returning excess to shareholders through share repurchases or borrowing to fund our investments.
From 2000 through 2015, the Company returned $357 billion of value to shareholders through dividend payments and share purchases, which reduced outstanding shares by 40 percent. ExxonMobil remains committed to a reliable and growing dividend, which has been increased 33 consecutive years. Despite a nearly 40 percent drop in crude prices in 2015, the dividend was increased by 5.8 percent and $3 billion of stock was repurchased, further enhancing the underlying value of all remaining shares and demonstrating the resiliency of our integrated business model. This value was delivered to shareholders while maintaining a robust capital investment program.
ExxonMobil is committed to disciplined investing in attractive opportunities across normal fluctuations in business cycles. Projects are evaluated under a wide range of possible economic conditions and commodity prices that are reasonably likely to occur. The Company does not publish the economic bases upon which we evaluate investments due to competitive considerations; however, it applies prudent and substantial safety margins in our planning assumptions to help ensure robust returns.
The Company also stress tests its oil and natural gas capital investment opportunities, which provides an added margin of safety against uncertainties, such as those related to technology, regulation/legislation, costs, geopolitics, availability of required materials, services, and labor. Such stress testing differs from alternative scenario planning, which we do not develop, but stress tests provide us an opportunity to fully consider a wide range of market conditions in the planning and investment process.
The Company addresses the potential for future climate-related policy, including the potential for restriction on emissions, through the use of a proxy cost of carbon. The proxy cost seeks to reasonably reflect the types of actions and policies that governments may take over the outlook period relating to the exploration, development, production, transportation or use of carbon-based fuels. This proxy cost of carbon is embedded in ourOutlook for Energy, and has been a feature of the report since 2007. All business segments are required to include, where appropriate, an estimate of the costs associated with greenhouse gas emissions in their economics when seeking funding for capital investments.
The scale and integrated nature of our operating cash flows along with prudent cash management provide unmatched financial strength, enabling the Company to invest in attractive projects throughout the business cycle.
A key strategy to ensure investment selectivity under a wide range of economic assumptions is to maintain a diverse portfolio of oil, gas, and petrochemical investment opportunities. This diversity, in terms of resource type and corresponding development options (oil, gas, natural gas liquids, onshore, offshore, deepwater, conventional, unconventional, liquefied natural gas) and geographic dispersion, is unparalleled in the industry.
These factors have positioned ExxonMobil consistently as an industry leader in return on capital employed and underpin our ability to continue leading shareholder distributions and maintain a long-term investment program that creates significant shareholder value.table.
ITEM 11 | – POLICY TO LIMIT GLOBAL WARMING TO 2°C | | | | | |
| 2020 Proxy Statement | | | | 69 | | |
This proposal was submitted by the Sisters of St. Dominic of Caldwell New Jersey, 40 South Fullerton Avenue, Montclair, NJ 07042, the beneficial owner of 200 shares and lead proponent of a filing group.
Pope Francis, in his encyclical letter Laudato Si’, states that ‘the climateExxonMobil is a common good, belonging to all and meantglobal company with employees in many countries around the world. As permitted by thede minimisexemption under the SECrules, for all.’1 Numerous faith traditionspurposes of identifying the median employee, we have issued statements highlighting the moral responsibility to address climate change and care for creation and calling for urgent action.2 They join expertsexcluded employees from 44 countries which represent in science, business, and politics who have stated that global warming is unequivocal, that climate change is human-induced, and that its decisive mitigation is a moral imperative for humanity.3
The poor and most vulnerable are the first to suffer, while future generations, holding no responsibility, will live with greater impacts of global warming.
World leaders in the 2010 Cancun Agreement agreed to limit warmingaggregate less than 5 percent of the average global atmospheric temperature to less than 2 degrees Centigrade (2°C) above pre-industrial levels in order to prevent the worst impacts of climate change, including extreme weather, drought, rising sea levels, crop failure, and accelerated species loss. These impacts will likely have societal consequences including migration, food insecurity, and conflict. The World Bank and the Intergovernmental Panel on Climate Change warnCorporation’s total employees. As required, where any employees from a jurisdiction were excluded, all employees from that if warming exceeds 2°C, there are risks of ‘triggering nonlinear tipping elements’ thus producing ‘irreversible’ impacts.
The emissions profile of ExxonMobil’s 2015Outlook for Energy report approximates scenarios that would entail warming in excess of 2°C.4
ExxonMobil claims that its energy production responds to a ‘moral imperative’5 to meet growing energy demand and eradicate poverty, but this does not offset the necessity to mitigate climate change or the moral imperative to limit warming to 2°C. Further, World Bank and energy analyst reports conclude that renewable energy provides a better pathway to energy access.6 Billions of people living in energy poverty are not only the least responsible for greenhouse gas (GHG) emissions, but also likely to be most adversely impacted by climate change.7
As a large GHG emitter with carbon intensive products, ExxonMobil should robustly support the global framework to address climate change resulting from the 21st Conference of Parties of the United Nations Framework Convention on Climate Change in December 2015. Constructive engagement on climate policy is especially important given Exxon’s historical role in financing climate denial and misinformation campaigns on climate change.8 Failing to address this could present reputational risk for ExxonMobil.jurisdiction were excluded. In contrast to ExxonMobil, ten oil industry peers including Total, Shell, BP, and Saudi Aramco, and business leaders in other industries, support an international agreement to limit warming to 2°C.9
Resolved: Shareholders request that the Board of Directors adopt a policy acknowledging the imperative to limit global average temperature increases to 2°C above pre-industrial levels, which includes committing the Company to support the goal of limiting warming to less than 2°C.
SUPPORTING STATEMENT
We believe that ExxonMobil should assert moral leadership with respect to climate change. This policy would supplement ExxonMobil’s existing positions on climate policy.
1. | http://w2.vatican.va/content/francesco/en/encyclicals/documents/papa-francesco_20150524_enciclica-laudato-si.html |
2. | http://www.umc.org/what-we-believe/resolution-on-global-warming; http://www.pcusa.org/media/uploads/acswp/pdf/energyreport.pdf; http://www.abc-usa.org/wp-content/uploads/2012/06/globwarm.pdf; http://www.ucc.org/environmental-ministries_synod-resolutions_a-resolution-on-climate; http://www.uua.org/statements/threat-global-warmingclimate-change; http://islamicclimatedeclaration.org/islamic-declaration-on-global-climate-change/; https://theshalomcenter.org/torah-pope-crisis-inspire-400-rabbis-call-vigorous-climate-action; http://www.quakerearthcare.org/article/shared-quaker-statement-facing-challenge-climate-change |
3. | http://www.casinapioiv.va/content/dam/accademia/pdf/declaration%20(final).pdf |
4. | http://cdn.exxonmobil.com/~/media/global/files/energy-and-environment/report---energy-and-climate.pdf |
5. | http://corporate.exxonmobil.com/en/company/news-and-updates/speeches/unleashing-innovation-to-meet-our-energy-and-environmental-needs |
6. | http://www.carbontracker.org/report/energyaccess/; http://www.theguardian.com/sustainable-business/2015/aug/07/world-bank-clean-energy-is-the-solution-to-poverty-not-coal |
7. | http://www.se4all.org/tracking-progress/ |
8. | http://www.ucsusa.org/global-warming/fight-misinformation/climate-deception-dossiers-fossil-fuel-industry-memos#.Vfrd3RFViko |
9. | http://www.oilandgasclimateinitiative.com/wp-content/uploads/2015/10/OGCI-Report-2015.pdf; https://www.whitehouse.gov/the-press-office/2015/10/19/fact-sheet-white-house-announces-commitments-american-business-act” |
The Board recommends you vote AGAINST this proposal for the following reasons:
ExxonMobil takes the risks of global climate change seriously and believes these risks warrant thoughtful action. The long-term objective of climate change policy should be to reduce the risks of serious harm to humanity and ecosystems at minimum societal cost, while recognizing additional shared humanitarian necessities, including providing reliable and affordable energy to improve global living standards.
The Board believes the Company has an obligation to shareholders to continue to invest in economically attractive energy sources in an environmentally responsible manner. The Board further believes the Company’s capabilities are best utilized finding practical, achievable solutions to address climate change risks consistent with the Company’s mandate, rather than focusing on a future global temperature stabilization outcome that ultimately will be dictated by many variables beyond the Company’s control.
Recognizing that reducing greenhouse gas emissions across the global economy is a shared objective, the Company remains focused on finding practical, prudent, and affordable solutions to address the dual challenge of expanding energy supplies to support economic growth, improve living standards, alleviate poverty, and improve resilience while simultaneously addressing the societal and environmental risks posed by rising greenhouse gas emissions and climate change.
Through effective solutions, progress can and has been made. For example, according to the U.S. Energy Information Agency, CO2 emissions in the U.S. power sector are down 15 percent since 2005, with 60 percent of this reduction reflecting the benefit of shifting from coal to natural gas. Also, per the U.S. Environmental Protection Agency, net methane emissions from natural gas have fallen 38 percent since 2005, during which time U.S. natural gas production has increased by 26 percent. Looking forward, we believe more progress will be made in the development of low greenhouse gas emissions technology, such as advanced carbon capture and sequestration (CCS).
As the policy and regulatory landscape has continued to develop, we have proactively addressed this global challenge. We have long taken action by increasing energy efficiency and reducing greenhouse gas emissions in our operations, providing products that help consumers reduce their emissions, supporting research into technology breakthroughs, and participating in constructive dialogue on policy options with non-governmental organizations, industry, and policy makers.
Each year, we update our long-term energy demand projection in ourOutlook for Energy – taking into account the most up-to-date demographic, economic, technological, and climate policy information available. This analysis serves as a foundation for our long-term business strategies and investments, and is generally consistent with other forecasting organizations such as the International Energy Agency. OurOutlook by no means represents a “business as usual” case and it includes a significant reduction in projected energy use and GHG emissions due to energy efficiency initiatives. Because we assume policy action will become increasingly more stringent over time,
ourOutlook projects lower future energy-related CO2 emissions through 2040 than would be implied by a ‘no policy scenario’ where limited GHG reduction policies and regulations are implemented.
ExxonMobil believes that effective policies to address climate change should put a price on greenhouse gas emissions that will:
Promote global participation;
Ensure a uniform and predictable cost of greenhouse gas emissions across the economy;
Let market prices drive the selection of solutions;
Minimize regulatory complexity and administrative costs;
Maximize transparency; and
Provide flexibility for future adjustments in response to scientific developments and the economic consequences of climate policies.
ExxonMobil has for many years held the view that a revenue-neutral carbon tax is the best option to fulfill these key principles. Instead of subsidies and mandates that distort markets, stifle innovation, and needlessly raise energy costs, a carbon tax could help create the conditions to reduce greenhouse gas emissions in a way that spurs new efficiency and technology solutions at the lowest cost to society and consumers.
ITEM 12 | – REPORT ON IMPACTS OF CLIMATE CHANGE POLICIES |
This proposal was submitted by the New York State Common Retirement Fund, 59 Maiden Lane – 30th Floor, New York, NY 10038, the beneficial owner of 10,926,248 shares and lead proponent of a filing group.
“RESOLVED: Shareholders request that by 2017 ExxonMobil publish an annual assessment of long term portfolio impacts of public climate change policies, at reasonable cost and omitting proprietary information. The assessment can be incorporated into existing reporting and should analyze the impacts on ExxonMobil’s oil and gas reserves and resources under a scenario in which reduction in demand results from carbon restrictions and related rules or commitments adopted by governments consistent with the globally agreed upon 2 degree target. The reporting should assess the resilience of the company’s full portfolio of reserves and resources through 2040 and beyond and address the financial risks associated with such a scenario.
Supporting Statement:
It is our intention that this be a supportive but stretching resolution that ensures the long-term success of the company.
Recognizing the severe and pervasive economic and societal risks associated with a warming climate, global governments have agreed that increases in global temperature should be held below 2 degrees Celsius from pre-industrial levels (Cancun Agreement). Pursuant to the Durban Platform, 184 parties submitted plans to reduce greenhouse gas emissions in advance of the 21st Conference of the Parties. In November 2014 the United States and China agreed to policy and regulatory actions to reduce greenhouse gas emissions and re-affirmed and expanded those actions in September 2015.
ExxonMobil recognized in its 2014 10-K that ‘a number of countries have adopted, or are considering adoption of, regulatory frameworks to reduce greenhouse gas emissions,’ and that such policies, regulations, and actions could make its ‘products more expensive, lengthen project implementation timelines and reduce demand for hydrocarbons,’ but ExxonMobil has not presented any analysis of how its portfolio performs under a 2 degree scenario.
In response to a previous shareholder resolution regarding Carbon Asset Risk, ExxonMobil asserted ‘that an artificial capping of carbon-based fuels to levels in the ‘low carbon scenario’ [such as IEA 450ppm] is highly unlikely’ and did not test its portfolio against a 2 degree scenario.
However, ExxonMobil’s peers, Shell, BP, and Statoil have recognized the importance of assessing the impacts of these scenarios by endorsing the ‘Strategic Resilience for 2035 and beyond’ resolutions that received almost
unanimous investor support in 2015. BHP Billiton now publishes a ‘Climate Change: Portfolio Analysis’ evaluating its assets against 2 degree scenarios, and ConocoPhillips states that it stress tests its portfolio against 2 degree scenarios. More recently, ten major oil and gas companies have announced that they will support the implementation of clear stable policy frameworks consistent with a 2 degree future.
This resolution aims to ensure that ExxonMobil fully evaluates and mitigates risks to the viability of its assets as a result of public climate change policies, including in a 2 degrees scenario.”
The Board recommends you vote AGAINST this proposal for the following reasons:
In 2014, ExxonMobil published the report, Energy and Carbon – Managing the Risks, to provide shareholders an enhanced description of global energy demand and supply, climate change policy and carbon asset risks. This report further described how the Company integrates consideration of climate change risks into planning processes and investment evaluation. The Board is confident that the Company’s robust planning and investment processes adequately contemplate and address climate change related risks, ensuring the viability of its assetstotal, as detailed in the above report. This report is found atexxonmobil.com intable below, 3,569 employees out of a total number of 75,927 worldwide employees were excluded under theClimatede minimis section.
ExxonMobil believes that producing our existing hydrocarbon resources is essential to meeting growing global energy demand. We enable consumers – especially those in the least-developed and most-vulnerable economies – to pursue higher living standards and greater economic opportunity. We believe all economic energy sources will be necessary to meet growing demand, and the transition of the energy system to lower carbon sources will take many decades due to its enormous scale, capital intensity and complexity. As such, we believe that none of our proven hydrocarbon reserves are, or will become, stranded. This is further detailed in the aforementioned report.
Each year, we update our long-term energy demand projection in ourOutlook for Energy – taking into account the most up-to-date demographic, economic, technological, and climate policy information available. This analysis serves as a foundation for our long-term business strategies and investments, and is generally consistent with other forecasting organizations such as the International Energy Agency. OurOutlook, which can be foundat exxonmobil.com/energyoutlook, by no means represents a “business as usual” case and it includes a significant reduction in projected energy use and GHG emissions due to energy efficiency initiatives. TheOutlook projects lower future energy-related CO2 emissions through 2040 than would be implied by a “no policy scenario” where limited GHG reduction policies and regulations are implemented.
In December 2015, parties to the United Nations Framework Convention on Climate Change (UNFCCC) convened in Paris for the 21st Conference of the Parties (COP 21). COP 21 resulted in a global compact, which for the first time, directs all parties to undertake action on climate change and report on related progress. For many years, ourOutlook has taken into account the potential for climate polices to become increasingly stringent over time by imposing higher costs on energy-related carbon dioxide emissions. Preliminary analysis of the aggregation of intended nationally determined contributions, which were submitted by governments as part of the COP 21 process, indicates a greenhouse gas emissions trajectory similar to that anticipated in ourOutlook.
We address the potential for future climate change policy, including the potential for restrictions on emissions, by estimating a proxy cost of carbon. This cost, which in some geographies may approach $80 per ton by 2040, has been included in ourOutlook since 2007. This approach seeks to reflect potential policies governments may employ related to the exploration, development, production, transportation or use of carbon-based fuels. We believe our view on the potential for future policy action is realistic and we require all of our business lines to include, where appropriate, an estimate of GHG-related emissions costs in their economics when seeking funding for capital investments.
We evaluate potential investments and projects using a wide range of economic conditions and commodity prices. We apply prudent and substantial margins in our planning assumptions to help ensure competitive returns over a wide range of market conditions. We also financially “stress test” our investment opportunities, which provides an added margin against uncertainties, such as those related to technology development, costs, regulation/legislation, geopolitics, availability of required materials, services, and labor. Stress testing, which differs from alternative scenario planning, further enables us to consider a wide range of market environments in our planning and investment process.
We maintain our long-standing commitment to energy efficiency, progressing the benefits of natural gas, research and development in alternative energies, providing access to energy, and constructive engagement with industry, governments, academic institutions, trade associations, and known external experts. We are an active participant in the International Petroleum Industry Environmental Conservation Association (IPIECA), an association that advances ideas and potential solutions for the industry concerning the risk of climate change.
In summary, while the Board agrees with the importance of assessing the resiliency of the Company’s resource portfolio, it believes the current processes as described above sufficiently test the portfolio to ensure long-term shareholder value. Framed by the 2014 report and assessed annually through stress testing in ourOutlookand in investment planning, we remain confident in the commercial viability of our portfolio. Furthermore, all proved reserves fully comply with SEC definitions and requirements as detailed in our annual 10-K.exemption.
ITEM 13 | – REPORT RESERVE REPLACEMENTS IN BTUs |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Countries Excluded / Number of Employees |
| 1. | | | Angola | | | 529 | | | 12. | | New Zealand | | | 93 | | | 23. | | South Korea | | | 28 | | | 34. | | Mauretania | | 4 |
| 2. | | | Norway | | | 391 | | | 13. | | Sweden | | | 68 | | | 24. | | Colombia | | | 22 | | | 35. | | Ukraine | | 4 |
| 3. | | | Egypt | | | 358 | | | 14. | | Taiwan | | | 65 | | | 25. | | Vietnam | | | 21 | | | 36. | | Azerbaijan | | 3 |
| 4. | | | Chad | | | 327 | | | 15. | | United Arab Emirates | | | 64 | | | 26. | | N. Mariana Island | | | 21 | | | 37 | | Cameroon | | 3 |
| 5. | | | Mexico | | | 292 | | | 16. | | Mozambique | | | 61 | | | 27. | | Romania | | | 18 | | | 38. | | Ghana | | 3 |
| 6. | | | Equatorial Guinea | | | 272 | | | 17. | | Cyprus | | | 43 | | | 28. | | Saudi Arabia | | | 13 | | | 39. | | Luxembourg | | 3 |
| 7. | | | Guyana | | | 169 | | | 18. | | Guam | | | 41 | | | 29. | | Spain | | | 11 | | | 40. | | Peru | | 2 |
| 8. | | | Qatar | | | 150 | | | 19. | | Poland | | | 34 | | | 30. | | South Africa | | | 11 | | | 41. | | Namibia | | 2 |
| 9. | | | Turkey | | | 116 | | | 20. | | Kazakhstan | | | 31 | | | 31. | | Micronesia | | | 9 | | | 42. | | Switzerland | | 2 |
| 10. | | | Japan | | | 114 | | | 21. | | New Caledonia | | | 29 | | | 32. | | Greece | | | 7 | | | 43. | | Pakistan | | 1 |
| 11. | | | Finland | | | 97 | | | 22. | | Fiji | | | 29 | | | 33. | | Denmark | | | 7 | | | 44. | | Tanzania | | 1 |
This proposal was submitted by Adelaide Gomer, c/o As You Sow, 1611 Telegraph Ave., Suite 1450, Oakland, CA 94612, the beneficial ownerTotal number of 150 shares and lead proponent of a filing group.employees excluded: 3,569
“Whereas:The current accounting system for oil and gas reserve replacement has inherent limitations that impede ExxonMobil’s ability to adapt to a climate constrained global energy market.
A primary metric the market uses to assess the value of an oil and gas company is its reserve replacement ratio. (Cambridge Energy Policy Forum, March 2015). Reserve replacement is currently denominated in oil and gas units, incentivizing the production and development of new oil and gas reserves. Where annual oil and gas reserve replacement is not fully achieved, a company’s stock market value is likely to be impaired and top company executives may not receive full incentive packages. This fuel specific reporting metric does not allow management the latitude needed to optimize enterprise goals in a carbon constrained environment.
Global governments recognize severe risks associated with a warming climate and the need to limit warming to 2 degrees Celsius or less. At the Conference of the Parties in Paris, world leaders made significant commitments to reduce greenhouse emissions and initiated discussions to implement carbon pricing policies. As worldwide energy needs grow, it is becoming increasingly likely that such demand will be met with a much greater amount of renewable energy. Climate change induced transitions are already occurring in energy markets in the form of rapid energy efficiency increases, decreasing costs of renewables, and disruptive technology development such as electric vehicles.
The need for Exxon to develop new pathways in response to these transitions is highlighted by Citi, Statoil, and other analysts, which predict that global oil demand could peak in the next 10 to 15 years. As the 2015 oil market decline demonstrates, even a relatively small global oversupply of oil can substantially decrease the value of oil companies.
Company management must have maximum flexibility to optimize production and development of energy reserves in line with these changing market conditions and opportunities. Further, management should be incentivized to adopt a stable, long-term revenue path that includes replacing carbon holdings with renewable energy. The current system of oil and gas reserve replacement accounting hampers such flexibility and creates inappropriate incentives. Moving to a system that accounts for resources in energy units, such as the internationally accepted standard British Thermal Units, instead of oil and gas, will create a new measure of successful operation and incentivize a stable transition to a climate appropriate resource mix. It will also help foster better company valuations by investors, creditors, and analysts, thus improving capital allocation and reducing investment risk.
Resolved:Proponents request that, by February 2017 and annually thereafter in a publication such as its annual or Corporate Social Responsibility report, Exxon quantify and report to shareholders its reserve replacements in British Thermal Units, by resource category, to assist the Company in responding appropriately to climate change induced market changes. Such reporting shall be in addition to reserve reporting required by the Securities and Exchange Commission, and should encompass all energy resources produced by the company.”
The Board recommends you vote AGAINST this proposal for the following reasons:
The current practice of reporting annual reserves replacement on an Oil-Equivalent Basis is the industry standard and compliant with the requirements of the Securities and Exchange Commission. Supplementing that statutory reporting with a BTU-based equivalent would not fundamentally provide the investment community with additional information nor influence investment choices. Importantly, the Company’s success as measured by the stock market is not, as the proposal suggests, driven by reserve replacement, but primarily by financial performance over a period consistent with investment horizons.
ExxonMobil executives are not compensated on the basis of a reserves replacement ratio. As detailed in ourExecutive Compensation Overview (ECO) and our Proxy Statement, the Compensation Committee assesses ExxonMobil’s leadership position in seven key areas in determining the appropriateness of total compensation. These seven metrics include Safety and Operations Integrity, Return on Average Capital Employed, Strategic Initiatives, Free Cash Flow, Shareholder Distributions, Total Shareholder Return and Project Execution. TheECO demonstrates how outstanding performance is required in all seven of these areas to result in a top award.
ExxonMobil’s long-termOutlook for Energy (exxonmobil.com/energyoutlook) is updated annually to reflect global economic and demographic trends as well as emerging technologies and policies that will impact energy supply and demand. As in past years, theOutlook continues to assume governments will place significant costs on greenhouse gas (GHG) emissions. TheOutlook also anticipates that even with substantial gains in efficiency, and strong growth in nuclear and modern renewable energy supplies, demand for oil will continue to rise through 2040, driven by developing nations. Credible third-party outlooks, including those developed by the International Energy Agency (IEA) and the U.S. Department of Energy, share this view. Also consistent with theOutlook, the IEA sees natural gas growing more than any other energy type through 2040, reflecting its ability to meet a wide variety of needs and provide one of the most cost-effective ways to reduce GHG emissions. The rising use of natural gas is a key factor in theOutlook’s view that by 2040 the carbon intensity of the global economy is likely to fall by half.
We address the potential for future climate change policy, including the potential for restrictions on emissions, by estimating a proxy cost of carbon. This cost, which in some geographies may approach $80 per ton by 2040, has been included in ourOutlook since 2007. This approach seeks to reflect potential policies governments may employ related to the exploration, development, production, transportation or use of carbon-based fuels. We believe our view on the potential for future policy action is realistic and, by no means represents a “business as usual” case. We require all of our business lines to include, where appropriate, an estimate of GHG-related emissions costs in their economics when seeking funding for capital investments.
ExxonMobil monitors the business environment, including long-term supply and demand fundamentals. The Company is structured to capture shareholder value throughout the commodity price cycle and is well positioned for the future. Moving to a system that accounts for reserves in energy units will not enhance ExxonMobil’s ability to create shareholder value.
ITEM 14 | – REPORT ON HYDRAULIC FRACTURING |
This proposal was submitted by the Park Foundation, P.O. Box 550, Ithaca, NY 14851, the beneficial owner of 117 shares.
“WHEREAS:
Extracting oil and gas from shale formations using hydraulic fracturing and horizontal drilling technology has become a controversial public issue. Leaks, spills, explosions and community impacts have led to bans and moratoria in New York State and elsewhere in the U.S., putting the industry’s social license to operate at risk. Hydraulic fracturing has also become a topic of controversy in many locations across the world, including in Germany which has impacted ExxonMobil’s unconventional oil and gas development in the region.
Disclosure of management practices and their impacts is the primary means by which investors can assess how companies are managing the risks of their operations. The Department of Energy’s Shale Gas Production Subcommittee recommended that companies ‘adopt a more visible commitment to usingquantitative measures as a means of achieving best practice and demonstrating to the public that there is continuous improvement in reducing the environmental impact of shale gas production.’
ExxonMobil has become a laggard in the oil and gas industry in its disclosure practices. In a 2015 report ‘Disclosing the Facts: Transparency and Risk in Hydraulic Fracturing Operations’, which ranked companies on disclosure of quantitative information to investors, Exxon scored only 4 out of 39 points for its disclosure practices. Two thirds of the companies reviewed earned higher scores for their disclosures.
Exxon’s subsidiary, XTO Energy, was cited for having 113 hydraulic fracturing environmental and health violations, from January 2011 to August 2014, in Pennsylvania alone (Environment America, Fracking Failures, 2015). These violations have increased shareholder concern about Exxon’s practices.
Due to Exxon’s poor disclosure performance, investors call for the Company to provide detailed, quantitative, comparable data about how it is managing the risks and reducing the impacts of its hydraulic fracturing extraction operations. ItsOperations Integrity Management System fails to provide such reporting to investors; as a generalized framework for companywide operations, it provides no specific information on the company’s shale energy operations.
THEREFORE BE IT RESOLVED:
Shareholders request the Board of Directors report to shareholders, using quantitative indicators, by December 31, 2016, and annually thereafter, the results of company policies and practices above and beyond regulatory requirements, to minimize the adverse environmental and community impacts from the company’s hydraulic fracturing operations associated with shale formations. Such report should be prepared at reasonable cost, omitting confidential information.
SUPPORTING STATEMENT:
Proponents suggest the report provide quantitative information for each play in which the company has substantial extraction operations, on issues including, at a minimum:
Goals and quantitative reporting on progress to reduce toxicity of drilling fluids;
Quantitative reporting on methane leakage as a percentage of total production;
Percentage of drilling residuals managed in closed loop systems;
Numbers and categories of community complaints of alleged impacts, and their resolution;
Systematic post-drilling ground water assessment; and
Practices for identifying and managing the hazards from naturally occurring radioactive materials.”
The Board recommends you vote AGAINST this proposal for the following reasons:
The Board believes the Company has provided a comprehensive and sufficient discussion of its policies and practices on risk management of unconventional resource development, including hydraulic fracturing. Additional quantitative reporting at the “play level” will not improve our risk management or community engagement efforts.
The Company details its risk management practices in several public documents in order to inform key stakeholders. In September 2014, ExxonMobil prepared the report,Unconventional Resources Development – Managing theRisks, which describes in detail how the Company assesses and manages risks associated with developing unconventional resources. This report is available atexxonmobil.com/hfreport. Further, the Company’s annualCorporate Citizenship Report also discusses risk management issues associated with unconventional resource development.
The Company continually engages with communities in which we operate regarding upcoming and ongoing operations. We learn of community concerns directly and address them in a timely and proactive manner.
Modern drilling technologies and adherence to appropriate safety protocols allow unconventional oil and gas resources to be developed in a manner that protects human health and the environment, and we are committed to environmentally responsible operations. Our Environment Policy and Operations Integrity Management System commit us to continuous efforts to improve environmental performance. The reports cited by the proposal including the Proponent’s report do not credibly represent the Company’s performance.
This is the seventh year such a proposal has been filed. The proposal fails to recognize the continued operational enhancements and disclosures made by industry, and the significant expansion of federal and state regulatory requirements that govern industry operations.
A subset of detailed “by play” data as suggested by the proposal, all of which are managed by industry best practices and federal and state regulation, will not meaningfully inform the shareholder. Informing shareholders of the risks and how these risks are effectively managed is important, which we have done through the 2014 report mentioned above and through our annualCorporate Citizenship Report.
ADDITIONAL INFORMATION
Other Business
We are not currently aware of any other business to be acted on at the annual meeting. Under the laws of New Jersey, where ExxonMobil is incorporated, no business other than procedural matters may be raised at the meeting unless proper notice has been given to the shareholders. If other business is properly raised, your proxies have authority to vote as they think best, including to adjourn the meeting.
People withWith Disabilities
We can provide reasonable assistance to help you participate in the meeting if you tell us about your disability and your plans to attend. Please call or write the Secretary at least two weeks before the meeting at the telephone number, address, or fax number listed under Contact Information on page 4.7.
Outstanding Shares
On February 29, 2016,2020, there were 4,150,241,2794,230,430,398 shares of common stock outstanding. Each common share has one vote.
How We Solicit Proxies
In addition to this mailing, ExxonMobil officers and employees may solicit proxies personally, electronically, by telephone, or with additional mailings. ExxonMobil pays the costs of soliciting this proxy. We are paying D.F. King & Co. a fee of $30,000 plus expenses to help with the solicitation. We also reimburse brokers and other nominees for their expenses in sending these materials to you and getting your voting instructions.
Shareholder Proposals and Director Nominations for Next Year
Any shareholder proposal for the annual meeting in 20172021 must be sent to the Secretary at the address or fax number of ExxonMobil’s principal executive office listed under Contact Information on page 4.7. The deadline for receipt of a proposal to be considered for inclusion in the 20172021 proxy statement is 5:005 p.m., Central Time, on December 14, 2016.10, 2020. The deadline for notice of a proposal for which a shareholder will conduct his or her own solicitation is February 27, 2017.23, 2021. Upon request, the Secretary will provide instructions for submitting proposals.
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70 | | | | | | 2020 Proxy Statement |
c/o Computershare Investor Services
P.O. Box 43105
Providence, RI 02940-5076
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2016 Annual Meeting of Shareholders Admission Ticket | | | | 
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TIME
| | Wednesday, May 25, 2016 | | | |
| | 9:30 a.m., Central Time | | | |
PLACE
| | Morton H. Meyerson Symphony Center | | | |
| | 2301 Flora Street | | | |
| | Dallas, Texas 75201 | | | |
AUDIO WEBCAST
| | A slide presentation with audio will be available on the Internet atexxonmobil.com.Instructions will appear on the website prior to the event.
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ADMISSION
| | This ticket will admit shareholder. Ticket for one guest can be requested at Admissions desk at the annual meeting. Valid admission ticket and government-issued picture identification are required for shareholder and guest. For safety and security reasons, cameras, smartphones, recording equipment, electronic devices, computers, large bags, briefcases, packages, and firearms or other weapons will not be permitted in the building.
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. 2020 Annual Meeting of Shareholders Admission Ticket TIME Wednesday, May 27, 2020 9:30 a.m. Central Time PLACE Renaissance Dallas Hotel Conference Center 2222 North Stemmons Freeway Dallas, TX 75207 WEBCAST A presentation with audio will be available on the Internet at exxonmobil.com. Instructions will appear on the website prior to the event. ADMISSION This ticket will admit shareholder. A ticket for one guest can be requested at the Admissions desk at the annual meeting. A valid admission ticket and government-issued picture identification are required for each of the shareholder and the guest. For safety and security reasons, cameras, smartphones, recording equipment, electronic devices, computers, large bags, briefcases, packages, and firearms or other weapons will not be permitted in the building. With the evolving concerns of COVID-19, these plans are subject to change and could evolve to a virtual meeting. We will notify you of any changes prior to the event. Please refer to your proxy statement for more information. As always, our first priority remains the health and safety of our shareholders, employees, and communities. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/exxonmobil q IF VOTING BY MAIL, SIGN BELOW, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.ENVELOPE.q PROXY/VOTING INSTRUCTIONS + Solicited by the Board of Directors The undersigned hereby appoints, and instructs the appropriate account trustee(s), if any, to appoint, U.M. Burns, K.C. Frazier, S.J. Palmisano, S.S Reinemund, and D.W. Woods, or each or any of them, with power of substitution, proxies to act and vote shares of common stock of the undersigned at the 2020 annual meeting of shareholders of Exxon Mobil Corporation and at any adjournments thereof, as indicated, upon all matters referred to on the reverse side and described in the proxy statement for the meeting and, at their discretion, upon any other matters that may properly come before the meeting. This proxy covers shares of ExxonMobil common stock registered in the name of the undersigned (whether certificated or book entry) and shares held in the name of the undersigned in the Computershare Investment Plan. This card also provides voting instructions to the applicable trustees for any shares held in the name of the undersigned in the ExxonMobil Savings Plan and/or a Computershare Investment Plan IRA. If no other indication is made on the reverse side of this form, the proxies/trustees shall vote: (a) for the election of the director nominees; and (b) in accordance with the recommendations of the Board of Directors on the other matters referred to on the reverse side. NON-VOTING ITEMS Change of Address — Please print new address below. Comments — Please print your comments below. AUTHORIZED SIGNATURES — This section must be completed for your vote to be counted. Date and sign below. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. +. 2020 Annual Meeting of Shareholders Admission Ticket TIME Wednesday, May 27, 2020 9:30 a.m. Central Time PLACE Renaissance Dallas Hotel Conference Center 2222 North Stemmons Freeway Dallas, TX 75207 WEBCAST A presentation with audio will be available on the Internet at exxonmobil.com. Instructions will appear on the website prior to the event. ADMISSION This ticket will admit shareholder. A ticket for one guest can be requested at the Admissions desk at the annual meeting. A valid admission ticket and government-issued picture identification are required for each of the shareholder and the guest. For safety and security reasons, cameras, smartphones, recording equipment, electronic devices, computers, large bags, briefcases, packages, and firearms or other weapons will not be permitted in the building. With the evolving concerns of COVID-19, these plans are subject to change and could evolve to a virtual meeting. We will notify you of any changes prior to the event. Please refer to your proxy statement for more information. As always, our first priority remains the health and safety of our shareholders, employees, and communities. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/exxonmobil q IF VOTING BY MAIL, SIGN BELOW, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q PROXY/VOTING INSTRUCTIONS + Solicited by the Board of Directors The undersigned hereby appoints, and instructs the appropriate account trustee(s), if any, to appoint, U.M. Burns, K.C. Frazier, S.J. Palmisano, S.S Reinemund, and D.W. Woods, or each or any of them, with power of substitution, proxies to act and vote shares of common stock of the undersigned at the 2020 annual meeting of shareholders of Exxon Mobil Corporation and at any adjournments thereof, as indicated, upon all matters referred to on the reverse side and described in the proxy statement for the meeting and, at their discretion, upon any other matters that may properly come before the meeting. This proxy covers shares of ExxonMobil common stock registered in the name of the undersigned (whether certificated or book entry) and shares held in the name of the undersigned in the Computershare Investment Plan. This card also provides voting instructions to the applicable trustees for any shares held in the name of the undersigned in the ExxonMobil Savings Plan and/or a Computershare Investment Plan IRA. If no other indication is made on the reverse side of this form, the proxies/trustees shall vote: (a) for the election of the director nominees; and (b) in accordance with the recommendations of the Board of Directors on the other matters referred to on the reverse side. NON-VOTING ITEMS Change of Address — Please print new address below. Comments — Please print your comments below. AUTHORIZED SIGNATURES — This section must be completed for your vote to be counted. Date and sign below. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. +
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PROXY/VOTING INSTRUCTIONS | | +
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Solicited by the Board of Directors
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The undersigned hereby appoints, and instructs the appropriate account trustee(s), if any, to appoint, M.J. Boskin, L.R. Faulkner, S.J. Palmisano, S.S Reinemund, and R.W. Tillerson, or each or any of them, with power of substitution, proxies to act and vote shares of common stock of the undersigned at the 2016 annual meeting of shareholders of Exxon Mobil Corporation and at any adjournments thereof, as indicated, upon all matters referred to on the reverse side and described in the proxy statement for the meeting and, at their discretion, upon any other matters that may properly come before the meeting. |
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This proxy covers shares of ExxonMobil common stock registered in the name of the undersigned (whether certificated or book entry) and shares held in the name of the undersigned in the Computershare Investment Plan. This card also provides voting instructions to the applicable trustees for any shares held in the name of the undersigned in the ExxonMobil Savings Plan and/or a Computershare Investment Plan IRA. |
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If no other indication is made on the reverse side of this form, the proxies/trustees shall vote: (a) for the election of the director nominees; and (b) in accordance with the recommendations of the Board of Directors on the other matters referred to on the reverse side. |
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Change of Address — Please print new address below. | | | | Comments— Please print your comments below. |
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C | | AUTHORIZED SIGNATURES — This section must be completed for your vote to be counted. Date and sign below. |
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Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. |
Date (mm/dd/yyyy) — Please print date below. | | | | Signature 1 — Please keep signature within the box. | | | | Signature 2 — Please keep signature within the box. |
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Audio Webcast of the Annual Meeting
