Washington State Treasurer Warns of Power Imbalance Ahead of ExxonMobil Shareholder Meeting

From the Treasurer

OLYMPIA – Ahead of ExxonMobil’s annual general meeting, which includes elections for board positions, Washington State Treasurer Mike Pellicciotti is warning of the deteriorating corporate accountability measures available to the shareholding public and the broad implications for the future of corporate governance.

In a May 21 Exempt Solicitation filed with the Securities and Exchange Commission (SEC), Pellicciotti and a coalition of state and city financial officers from around the United States called on global asset managers that collectively represent a 38-percent stake in ExxonMobil to vote against two key board members as a way to hold ExxonMobil accountable and express dissatisfaction for a recent lawsuit ExxonMobil filed against its own shareholders.

The lawsuit is being viewed as a unprecedented strategy by ExxonMobil to avoid future attempts for accountability by sidestepping existing SEC review procedures established to evaluate the legitimacy of shareholder resolutions.

“The aggressive tactics to eliminate dissent and reduce corporate accountability from shareholders risks tipping the scales of power even further in favor of corporate boards seeking short term financial profits at the expense of long-term business risks,” said Pellicciotti. “Make no mistake, publicly traded corporations of every kind are eagerly tracking the response to Exxon’s lawsuit and will emulate this playbook should they be successful. It is critical that institutional investors and asset managers who are focused on long-term economic interests vote to deter corrosive impulses by corporate executives to crush and silence shareholders.”

Along with the coalition of State Treasurers, Comptrollers, Public Employee Retirement System Administrators and labor representatives who signed onto the letter, major proxy advisors and asset managers, including Glass Lewis and Norway’s $1.6 trillion sovereign wealth fund, have also advised voting against key board members in response to the lawsuit threatening shareholder rights.

“The methods for good faith discourse and basic accountability measures must remain in place if we are to maintain even the razor thin levels of public trust in corporate governance. I am confident that in sending this collective message, we can begin to reestablish a reasonable balance of power,” said Pellicciotti. “Shareholders are the owners of these companies, not the other way around.”

ExxonMobil’s Annual General Meeting commences on Wednesday May 29, 2024.