RiskMetrics, Rockefellers Fuel Governance Push at Exxon Mobil

 In separate move, Wachovia names independent Chairman

By Dennis Schaal

The Rockefeller family—that is, the one that counted John D. Rockefeller Sr. and Nelson Rockefeller among its ranks—knows something about power.

John D. Rockefeller founded Standard Oil, of course, and the family has flexed lots of financial and political muscle over the last century or so.

Now the Rockefeller family has set it sights on breaking up a power center at Exxon Mobil, of which the family owns several hundred thousand shares.

A family representative filed a proxy resolution calling for the breakup of the chairman and CEO roles, both currently held by Rex Tillerson. Allowing Tillerson, or anyone else at Exxon Mobil, to hold both titles limits independent oversight, the family argues.

Now, that resolution has picked up the backing of RiskMetrics Group’s ISS Governance Service, which is asking shareholders to back the resolution at the Exxon Mobil’s May 28 shareholder meeting.

“Specifically, the company has failed to provide a counter-balance structure to the combined position of CEO/chair,” RiskMetrics ISS states. “The presiding director is merely responsible for chairing the meeting of independent directors and providing feedback from those meetings to the chairman.”

RiskMetrics backed a similar resolution in 2007, which failed but got 40 percent support, according to the Wall Street Journal.

With the Rockefeller family on board, supporters of splitting the CEO/chairman roles hope the resolution will succeed in this month’s vote.

RiskMetrics and the Rockefeller family, too, also favor resolutions calling on Exxon Mobil to set greenhouse gas emission (GHG) reduction goals, and to develop a policy to pursue the development of renewable energy sources, the Wall Street Journal article states. Exxon Mobil opposes these resolutions.

Meanwhile, Wachovia announced May 8 that it will separate its chairman and CEO roles. Ken Thompson will remain as President, CEO and as a board director, and Lanty Smith will assume some of Thompson's former duties as Wachovia's nonexecutive chairman.

Smith, Wachovia's  lead independent director since 2000, also is chairman of the board's executive committee.

"At this challenging time for the financial services industry and for Wachovia, my management team and I are pleased that Lanty agreed to assume the role and responsibilities of chairman, freeing me to focus 100 percent of my time and attention on guiding the company through the current environment and building and delivering enhanced value for the benefit of our shareholders, customers and employees," Thompson stated.

The move was welcomed by William Patterson, the Executive Director of the CtW Investment Group, who said it would "restore appropriate checks and balances on the power and risk-taking of its CEO."

"The onus is now on the boards at Morgan Stanley and other banks that suffered similar failures to stop stonewalling their shareholders and adopt this critical governance reform," Patterson stated.