Tuesday, May 06, 2008

Monks aims to change ExxonMobil

Portland Press Herald

Edward Murphy

May 6, 2008

Most investors would be perfectly happy with the value of their stock nearly tripling over the past five years.

But Robert A.G. Monks of Cape Elizabeth and the Rockefeller family are not that pleased with ExxonMobil, despite the huge profits and healthy stock gains the company has been posting.

Monks and the Rockefellers are teaming up to try to force the oil conglomerate to change with the times, lest it be left behind.

Their proposals, to be voted on at ExxonMobil's annual meeting on May 28 in Dallas, are led by Monks' move to separate the jobs of chief executive officer and chairman of the board. Rex Tillerson, ExxonMobil's chairman and CEO, would have to give up leadership of the board, which would pass to an outside director under Monks' plan.

Monks said company boards are supposed to supervise and evaluate the top executives. That can't work when the very top executive also runs the board, he said.

"How does the same person supervise themselves?" he asked. "It just doesn't make any sense at all."

Monks, a longtime shareholder activist, said his proposal has been steadily gaining support, with the backing of those owning 40 percent of the shares at the last annual meeting. But, he said, that level of support and news reports about Monks teaming up with the Rockefellers has gotten management's attention, and he expects the executives to rally their supporters to try to beat back the proposal at the annual meeting.

The contest, he suggested in language a little too strong for a family newspaper, has now become a test of manhood for ExxonMobil's leaders.

"It's a little naive to think they'll ignore it forever, because if we get to 50 percent, they've got a problem," Monks said.

Another problem ExxonMobil may face is the restive Rockefellers, descendants of John D. Rockefeller. That Rockefeller, of course, was the country's first oil mogul and founded Standard Oil, a forerunner of ExxonMobil.

Monks and the Rockefellers want the company to look beyond today's $120-a-barrel oil and think about what happens when the oil starts running out, or the leaders of the countries where the oil comes from want to call the shots on their chief, and valuable, natural resource.

ExxonMobil, Monks said, "no longer controls their source of supply," he said. "If Exxon(Mobil) doesn't do anything, 20 years from now they're just going to be a distributor."

From his experience running a heating oil company in the Portland area, Monks said, he knows "being a distributor isn't as good a business" as being the company that also pumps and refines the oil.

Team Monks/Rockefeller is also pushing ExxonMobil to become greener, with proposals requiring the company to give consumers more information on emissions and a requirement calling for a report on the likely consequences of climate change – and what might be the result if the company took the lead on developing sustainable energy sources.

Monks and his family own about 100,000 shares of ExxonMobil, out of about 5.4 billion shares outstanding. The Rockefellers, individually, also own a tiny fraction of shares outstanding, although foundations and charities have been given a substantial amount of stock by the family, he noted. Still, the proposals would require significant backing by mutual funds and other large shareholders, such as pension funds, to gain a majority.

The company is resisting all the proposals and recommending that shareholders vote against them. Monks said he's not surprised.

"They seem to be allergic to taking suggestions from anyone else," he said, and ExxonMobile is the type of company where only longtime employees rise to the top.

"Exxon is a really, really insular company," Monks said. "They haven't really got anybody there saying, 'Hey everybody, let's have some common sense.'"

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:

emurphy@pressherald.com

1 comment:

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