Exxon feels the Rockefeller wrath

If you're a minority shareholder taking on the world's biggest company, it helps if your name's Rockefeller...

Last Updated: 31 Aug 2010

The latest scions of the illustrious US dynasty have launched a public attack on ExxonMobil, the giant oil company that emerged from what was once John D. Rockefeller’s Standard Oil. The family, who still own a tiny percentage of the $500bn behemoth, want Exxon to split the chairman and chief executive roles and focus more on renewable energy – rather than funding climate change deniers, as they’ve done in the past…

It’s not often the Rockefellers flex their considerable muscle publicly, but obviously corporate governance iniquities really get their goat. In a press conference on the penthouse level of the exclusive Parker-Meridian hotel, John’s great granddaughter Neva Rockefeller Goodwin (an economist) and her cousin Peter O’Neill railed against Exxon’s refusal to address shareholder concerns. ‘There are an awful lot of people who are getting increasingly annoyed with Exxon,’ Neva reportedly said. ‘Their attitude is: 'these pesky shareholders, they act as if they own the company’.’

Their argument is that Exxon can’t just keep relying on bumper oil prices – it needs to adapt to survive in a rapidly-changing industry, and this means getting into clean energy. Exxon is the only one of the big oil companies that has seemingly made no attempt whatsoever to jump on the green bandwagon; despite making profits of about $40bn last year, it conducts hardly any research into the area, insisting that the technology just isn’t advanced enough to be cost-effective yet. Not an unreasonable argument in itself – but the fact that it’s previously funded organisations set up to refute climate change suggests that it has philosophical as well as practical objections.

Although the Rockefellers apparently have nothing against Exxon CEO Rex Tillerson – ‘an amazing oil and gas manager,’ according to O’Neill – they want him to give up the chairmanship to an outsider rather than doing the job himself (an arrangement that’s much more common in the US than it is over here). And at last year’s AGM, about 40% of shareholders felt the same way. In fact, the Rockefellers seem to have accumulated some powerful allies – notably the massive Californian state pension fund (a big supporter of renewable energy projects) and the Connecticut pension fund, both big Exxon stockholders – so although their stake is small, they can still have major nuisance value.

It might seem a bit odd that the remnants of Exxon’s past are accusing the company of neglecting the future. But they say there’s no contradiction at all, suggesting that the company needs to ‘reconnect with the forward-looking and entrepreneurial vision of my great-grandfather’. Then again, it's worth remembering that this is the man who once described his formula for success as: 'rise early, work hard and strike oil.' No mention of wind turbines in the back garden there...

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