ExxonMobil last week filed a lawsuit against two activist investor groups objecting to an apparently frivolous shareholder proposal, which it hopes will be taken up at the company’s impending annual meeting in May. , set the climate alarm lobby ablaze. The lawsuit was filed in Texas court on January 21 against Massachusetts-based investment firm Arjuna Capital and Amsterdam-based investor group Follow This.
A report submitted by the Associated Press, Reuters, CNBC and other traditional media sites have warned that Exxon’s victory in the lawsuit could have a “chilling effect” on bringing other climate-alert and ESG-related initiatives to bear in the future. did. Given that Exxon’s complaint is based on the fact that efforts substantially identical to those sought by Arjuna and Follow This have been repeatedly brought forward over the past several years and overwhelmingly rejected by shareholder votes. And the evidence supporting that claim seems somewhat dubious. Breeding them again this year is clearly a waste of time and resources, and nothing more than harassment.
In other words, these specific questions have been asked and answered so many times that there is little point in asking them again just for the sake of asking them. That doesn’t mean that a ruling in ExxonMobil’s favor in this case will deter activist investors from raising other legitimate questions in the future, but it does raise the alarm. It is a story in which the activist lobby and the media that support them have settled down. (Related: David Blackmon: The Biden administration and its allies are waging a foolish war on abundant clean energy)
Readers may wonder why the company decided to file suit against the two activist investors rather than proceed through the more routine appeals process managed by the Biden SEC. The answer is very simple. SEC commissioners appointed by President Biden have decided to change a decision-making process that has worked well for decades, making it much more difficult and tilting the expected outcome in favor of activist investors. I decided to make it biased.Therefore, as follows Reuters News outlets such as , have noted that fewer and fewer companies have pursued appeals with the SEC over the past few years.
Here’s what ExxonMobil has to say about it: Email CNBC: “The breakdown of the shareholder proposal process, where proponents can advance their agendas through a flood of proposals, is not in the interest of investors. We are simply asking the court to apply the SEC’s proxy rules as written to eliminate the
Reuters Quote Mark Ueda, one of the SEC commissioners, said: Recent policy changes may have changed this perception. ” oh. you don’t say
The moral of this story is: When a radical president brings in appointees who destroy a system that has been considered fair by all stakeholders for decades and turns it into a basic kangaroo court, stakeholders will probably look for a way around this problem. system.
There is nothing wrong with ExxonMobil’s decision to sue to block these frivolous resolutions that benefit no one and waste everyone’s time. The company has an absolute right to pursue every remedy available to it, including in federal court, even if it upsets the virtue-mongering upper echelons of the climate lobby. .
This is very similar to the situation at the Texas border with Mexico. There, when Biden took office, he immediately issued a series of executive orders that gutted a border security system that was working very well and replaced it with a system that basically secured the border. and intentionally opened the country to a mass unchecked illegal immigration. Now, the administration is bemoaning the fact that Texas and other states are looking for ways to get around his failure to do anything constructive to slow the flow.
When a presidential administration destroys a functioning system and replaces it with one intentionally designed to fail, stakeholders will exercise their right to seek other remedies. That’s all ExxonMobil is doing here, and it shouldn’t surprise anyone.
David Blackmon is an energy writer and consultant based in Texas. He spent his 40 years in the oil and gas business, specializing in public policy and communications.
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