Shareholders Win and Environmentalists Lose at Exxon Meeting
Written by: Aaron Katsman | May 29, 2008
Aaron Katsman
www.IsraelNewsletter.com
In a widely anticipated showdown, that garnered much media attention, Exxon Mobil (NYSE:XOM) Chairman
and CEO Rex Tillerson will retain both his jobs, despite the best efforts of the Rockefeller family. The Rockefellers wanted to appoint an independent director and strip Tillerson of his chairman title. Rockefeller pressed for Exxon to invest more money into alternative energy technology, and take a longer term perspective, instead of focusing on just making large profits now.
According to the AP report: “All of Exxon Mobil’s acknowledged strengths are no guarantee it will remain flexible and visionary in light of the changing energy realities that lie ahead,” said Peter O’Neill, a great-great grandson of John D. Rockefeller. “That’s why we support our company having an independent chair. We are looking forward.”
Even with all the media attention leading up to the vote, those in favor of splitting the Chairman/CEO role managed to get only 39.5% of shareholder support. That’s a bit worse than they managed to get last year. Sort of ironic with all the hysteria regarding global warming and the need for alternative sources of energy.
Common sense and Exxon’s commitment to provide shareholder value won out over suspect science and hysteria. The responsibility of a publicly traded company is to provide value and maximize profits. Exxon has been skeptical all along with regards to pouring billions of dollars into alternative energy development. If alternatives to crude oil prove to actually be cost efficient and profitable to produce, I would look to Exxon to make an acquisition in the space. But as long as production costs remain high, and the actual energy output remains small, look for Exxon to solely focus investment on technologies to help reduce costs and increase recovery rates with regards to crude.
Disclosure: Author’s fund has no position in any stock mentioned as of 5/29/08.
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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
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