From: David Koenig, Associated Press
Published May 24, 2005 12:00 AM

Dissident Shareholders Push Exxon Mobil on Global Warming

DALLAS — Shareholders of Exxon Mobil Corp., coming off record profits last year, will vote Wednesday on proposals from dissident investors on a range of social and environmental resolutions opposed by management of the nation's largest oil company.


High oil prices helped Exxon earn $25.33 billion last year, believed to be a record operating profit for a U.S. corporation. However, Exxon shares have dipped nearly 15 percent in the three months since first-quarter profits fell short of expectations.


Exxon shares rose 74 cents, or 1.4 percent, to $54.75 Monday on the New York Stock Exchange.


Analysts are generally bullish on the stock, although some believe the company should be more aggressive in searching for new sources of oil. In the first quarter, Exxon pumped 3.5 percent less oil and 6.4 less natural gas than a year earlier, as production sagged in maturing fields.


Still, Bruce Lanni, an analyst with A.G. Edwards & Sons, recently upgraded the stock to a "buy" rating, saying Exxon's financial position is unmatched in the oil industry and should remain strong.


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Exxon Mobil annual meetings are usually raucous affairs that attract dozens of protesters from environmental groups such as Greenpeace. They have been known to dress in costumes like the Exxon tiger and mix it up with pro-company demonstrators.


Inside the Morton H. Meyerson Symphony Center, activist shareholders fault Exxon for everything from its skepticism over global warming theories to the human-rights record of Third World countries where the company drills for oil.


Last week's J.C. Penney Co. shareholder meeting near Dallas took all of 28 minutes. In contrast, Exxon gatherings routinely drag on for up to three hours despite Chairman and Chief Executive Lee R. Raymond's rules that sharply limit the length of shareholder speeches. There is usually a heavy police presence, and shareholders must go through metal detectors.


There will be eight shareholder proposals on Wednesday's proxy ballot. Some deal with corporate governance issues such as compensation of company directors, but the most hotly debated will concern gay employees, the company's skepticism about global-warming theories, and how Exxon will comply with the Kyoto Protocol, a treaty that would require industrialized nations to cut emissions of greenhouse gases.


The United States has not ratified the Kyoto treaty, and Exxon opposes it.


Sponsors of the resolutions say Exxon is unusually aggressive in trying to keep such measures off the proxy ballot.


"As a general strategy, the company challenges just about any resolution on climate change," said John Wilson, director of socially responsible investing at Christian Brothers Investment Services, which sponsored the global-warming measure. Exxon challenged the resolution on two grounds, but the Securities and Exchange Commission ordered it placed on the ballot.


"Exxon Mobil will not take a resolution without fighting us every step of the way," said Michael Crosby, a Catholic priest whose Capuchin order in Milwaukee sponsored the Kyoto resolution.


Exxon Mobil spokesman Tom Cirigliano said the company "is totally open to give-and-take on these issues" but believes the scientific evidence behind global warming "remains inconclusive." He said the company has cut emissions at its plants.


Cirigliano said Exxon often opposes shareholder resolutions because they ask for information that the company has disclosed. He cited a 2004 publication, "A Report on Energy Trends, Greenhouse Gas Emissions and Alternative Energy," in which the company said its views are based on long-term involvement in climate-science research. Critics say the report was inadequate.


In an SEC filing, Exxon lawyer James Earl Parson said the company was working with governments and business groups to prepare for restrictions in countries that have adopted Kyoto. Exxon "is fully prepared to comply with all laws and regulations in countries where we operate," he said.


The activists' resolutions usually fall far short of a majority, topping 20 percent a few times. Crosby said he hoped to win double-digit support in the Kyoto vote because Institutional Shareholder Services Inc., which advises large investors, endorsed the resolution.


Still, he acknowledged it is difficult to convince investors of his view that the company's environmental policies come with a long-term financial cost.


"When you're dealing with an Exxon Mobil, which is making so much money from fossil fuel," he said, "you aren't going to get people looking too far in the future."


Source: Associated Press


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