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Shareholders push Exxon for change at Subdued Meeting
By Deepa Babington

May 25, 2005

DALLAS, May 25 (Reuters) - Activists assailed Exxon Mobil Corp. (XOM.N: Quote, Profile, Research) for its stance on environmental issues on Wednesday, but shareholders voted down proposals on global warming and climate change at the No. 1 public oil company's largely subdued annual meeting.

Unlike years past, only a handful of protesters showed up to demonstrate on a rainy day in downtown Dallas. Still, dozens of police patrolled outside the symphony hall venue, where rails and barricades were set up to keep back any protesters.

As usual, Exxon -- which briefly overtook General Electric Co. as the world's most valuable company earlier this year -- promised to look past short-term swings in oil and gas prices as it keeps its eyes focused on the long term.

Inside, a parade of environmental activists, human rights campaigners and even a native of Indonesia's troubled Aceh province, where Exxon operates, took to the podium to complain about the company's stance on a smorgasbord of issues from climate change to sexual orientation discrimination.

Most attacked Exxon for not investing in renewable energy sources like solar and wind energy or for not doing more on climate change and global warming issues. Occasionally, a few Exxon retirees or longtime shareholders stepped up to praise the company's strong performance over the years.

"The company has done well lately," Andrew Logan, program manager at the CERES Group, which backed the proposals on environmental issues, said at the meeting.

"But we're worried Exxon is not prepared to thrive in a world that's very different from today. And the world is changing for oil companies."

HALLMARK WIT

There were almost no theatrics or attention-grabbing stunts by activists to protest Exxon's policies. But as usual, Chief Executive Lee Raymond's hallmark bluntness and quick wit were on display.

When one Exxon critic took the podium to say the allotted two minutes for each speaker were not enough to say what he thought of Raymond, the veteran Exxon executive shot back immediately with "It probably goes both ways."

As expected, none of the proposals managed to muster a majority. Boosted by support from proxy firm Institutional Shareholder Services, however, a resolution seeking more information on the company's plans to comply with the Kyoto Protocol in countries where the greenhouse gas reductions treaty has been adopted garnered 28 percent of the votes cast.

Exxon says it has already published a list of actions to address greenhouse gas emissions and is prepared to comply with all laws in the countries where it operates. Raymond also said he didn't expect any European countries to be able to meet the requirements of the Kyoto treaty.

For the seventh year, Exxon shareholders voted down a resolution asking it to explicitly prohibit discrimination based on sexual orientation in its employment policy.

The company says its policies ban discrimination of any reason, including sexual orientation.

None of the resolutions on the ballot were binding -- meaning the board is not obliged to implement them even if they were passed with a majority. In any case, activists say their main aim is to draw attention to their causes.

"Our goal is not to win the vote, but to get Exxon to work with us on this," said John Wilson of the Christian Brothers Investment Services, which sponsored the resolution seeking information on Exxon's position on climate change.

SOME CONTENT

Other shareholders, though, were perfectly content.

"We're very pleased with our investment. The company pays good dividends and has been doing really well, so we have no complaints," said Bill McGill, a retired school teacher from the Houston area who drove to Dallas to attend his first Exxon shareholder meeting.

Boosted by soaring oil and gas prices, Exxon posted record profits of more than $25 billion and reported revenues of nearly $300 billion last year. It sits on a growing pile of cash, which it has vowed to funnel back partly to shareholders and partly to growth projects.

Following the meeting, Raymond told reporters the company's production volumes would show a significant shift up in the second half of the year, when major projects come online.

Exxon said its plans were still to boost capital spending to about $18 billion a year between 2007 and 2010 from the recent levels of $15 billion to $16 billion a year. The company also highlighted its progress on the liquefied natural gas front -- a market it expects to capture 30 percent of by the end of the decade, from its 20 percent share now.

 



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