What to Expect at Exxon’s Annual Meeting

Every year, ExxonMobil XOM investors vote on proposals made by shareholders and published in its proxy ballot. Until this year. For the first time since the SEC made electronic company filings mandatory through its EDGAR system, the Exxon proxy contains no shareholder proposals. This comes after the company’s lawsuit against a shareholder last year, as well as new SEC guidance making it more difficult for proposals to get on the ballot. Exxon’s annual meeting is on May 28.

Proxy voting proposals are a way for Exxon’s 6 million shareholders to influence company behavior. Another way is through “engagement,” which describes regular conversations and meetings investors have with companies.

Exxon, one of the world’s largest oil companies, didn’t respond to a request for comment. The firm told Bloomberg that it was “the first time in recent history that our proxy includes zero proposals from activists.”

Lindsey Armstrong, director of stewardship research and policy for Morningstar Sustainalytics, observes: “It’s certainly unusual to see no shareholder resolutions at Exxon. In the last three proxy years, only Big Tech giants Amazon, Alphabet, and Meta Platforms have fielded more shareholder proposals than Exxon.”

Exxon’s Proxy Voting Backstory

Exxon faced 230 shareholder resolutions from 1994 to 2024—an average of nearly eight for each annual meeting over 31 years—according to Jackie Cook, senior stewardship director at Morningstar Sustainalytics. She explains that over the years, shareholders have frequently requested governance measures, including the separation of the roles of CEO and board chair. (One regular filer was the late Bob Monks, dubbed the founding father of shareholder activism.)

Climate change first appeared as a topic for a shareholder vote at Exxon’s 1998 annual meeting. Since then, according to Cook, it has been on the ballot in various forms, such as renewable energy, financial risk, scope 3 reporting, and climate transition planning. Biodiversity first appeared as an issue on the ballot in 2006. Numerous other issues—executive compensation, corporate political influence, shareholders’ voting rights, drilling in the Arctic National Wildlife Refuge, plastic pollution, human rights, and more—have been addressed by shareholders on Exxon’s proxy ballot over the past three decades.

Last year, Exxon faced four shareholder proposals, including one by United Church Funds asking the company to report on how a significant reduction in virgin plastic demand would affect its financial position. In 2023, there were 13 proposals. In 2021, investor Engine No. 1 won a six-month proxy battle to put three directors on Exxon’s board to help address the long-term business risks of climate change.

Exxon Lags Stock Market Going Into Annual Meeting

Exxon certainly has plenty to talk about. Going into this meeting, its stock price is lagging the broader US market amid concerns that the Trump administration’s trade wars will dent profitability and slow the global economy. That’s raising questions about the oil producer’s ability to maintain payouts. Exxon’s first-quarter net income fell to $7.7 billion from $8.2 billion a year earlier.

Indeed, investors are concerned about the third prolonged downturn in crude prices in just over a decade. Exxon “is departing from industry trends by increasing spending to deliver $20 billion in earnings growth by 2030,” Morningstar analyst Allen Good recently wrote. “Although the higher spending might sound alarming, given the industry’s history of pursuing growth at the expense of returns, Exxon’s differentiated portfolio should enable it to do so while maintaining capital discipline and delivering returns.”

But Exxon says the decline in oil prices could open up acquisitions of other companies. In the past two years, it completed acquisitions of Denbury Resources and Pioneer Natural Resources. It is also reportedly looking at BP BP after activist Elliott Investment Management built a 5%-plus stake in the company.

Two Reasons There Are No Proposals This Year

Last year, Exxon sued shareholder Arjuna Capital and activist Follow This to stop them from submitting a proposal asking the firm to reduce its emissions faster. A judge threw out the suit after Arjuna withdrew the proposal and made an “unconditional and irrevocable” pledge to not file similar proposals. CEO Darren Woods said he was open to suing more shareholders for “abus[ing]” the proxy voting process,

Additionally, the SEC issued new guidance that profoundly affected shareholder engagement with US companies. For example, it began to require extended disclosures from shareholders with large equity stakes who engage with management on environmental, social, and governance matters. The SEC also made it easier for companies to exclude proposals if they make “micromanaging” requests of boards or because they deal with ordinary business matters. Bloomberg reports that the sole shareholder proposal made to Exxon this year was thrown out because it “tried to micromanage the company.”

However, many proposals came from smaller shareholders seeking greater disclosures around Exxon’s positioning amid a changing climate and the energy transition. Such investors believe they need this information to mitigate portfolio risk.

Trillium Asset Management is a sustainable investing firm and a frequent filer of shareholder proposals. Chief advocacy officer Jonas Kron says that Exxon “threw out the baby with the bathwater. It’s as if they decided to go through a management systems overhaul to address some discrete managerial pain points but, in the process, drove away its best engineers.”

Leslie Samuelrich, president of Green Century Funds, says, “If you claim you are a responsible investor and persist in holding Exxon stock, you must actively engage. Unfortunately, investors are afraid of being targeted by the corporation. They should engage or divest; it’s just that simple.” Green Century is another frequent filer of shareholder resolutions.

Exxon’s New Emphasis on Engagement

Exxon’s proxy describes in detail its process of engagement with shareholders and points to several publications related to subjects that proposals often address. “The emphasis on the company’s shareholder engagement efforts in this year’s proxy statement seeks to assuage fears that Exxon is seeking to silence its shareholders,” says Stewart. “Time will tell whether that’s enough to heal divisions caused by Exxon’s threats to sue resolution filers last year.”

Are more shareholder proposals on the way at Exxon? That depends on whether the SEC issues more guidance. In addition, Stewart says, “there seems to be a trend toward more management-friendly corporate domiciles in the US, whether that’s in Delaware, Texas, or elsewhere. Eventually, that may have consequences for how easy it is to get shareholder resolutions on the ballot.”

On average, a publicly traded company can expect to receive one shareholder proposal every 7.7 years. “So in many respects, the norm is that a company does not get a proposal,” says Kron. “I would assume that proposals [at Exxon] will come back.”