For Immediate Release
Monday, May 09, 2011
AFSCME and RAM Trust Urge Exxon Mobil Shareholders to Rein in CEO Pay, Implement Governance Improvements on May 25Washington, DC —
AFSCME and RAM Trust are recommending that shareholders of Exxon Mobil (XOM) vote:
- AGAINST ratifying executive pay (Item 3)
- FOR One Year frequency of the advisory vote on compensation (Item 4), and
- FOR shareholder proposals (Items 5, 6 & 7) seeking an independent chair, amending the EEO policy, and improving political contributions disclosure at the Exxon Mobil shareholder meeting on May 25.
Exxon Mobil’s total shareholder return over the past three years was -5.8%, and CEO Rex Tillerson received over $88 million during this period. Despite another relative underperformance in 2010, Tillerson was paid approximately $29 million. This six percent raise made him the highest paid energy executive in the United States.
Exxon’s pay practices have resulted in excessive pay with subjective and inconsistent links to performance. Rather than explain how peer group pay is used to establish compensation, XOM instead offers that the Compensation Committee uses its “well-informed judgment.”
“Is there any limit to what the executives of publicly traded companies can pay themselves? Exxon’s ‘just trust us’ approach to executive compensation should not be rubber stamped by institutional investors,” said AFSCME President Gerald W. McEntee. “Exxon’s compensation committee needs to explain how these lavish amounts are tied to performance.”
Robert Monks, founder of RAM Trust, added “There are too many different compensation plans. Does Exxon really have a problem retaining senior executives?”
Shareholders have overwhelmingly favored an annual vote on pay, but Exxon is asking shareholders to approve a vote on its pay once every three years. “Since Exxon’s board can’t be bothered to explain how it pays executives, it’s no wonder they don’t want annual shareholder input,” stated McEntee. “The message from Exxon to its shareholders seems to be ‘you are to be seen, but not heard.’”
AFSCME and RAM Trust also urge support for shareholder resolutions (Items 5, 6 & 7) that would institute the following governance improvements:
- Adopt a policy that the XOM Board Chair be an independent director, as currently practiced by 40% of S&P 500 companies and required for most UK companies (Item 5);
- Provide a report on XOM expenditures to influence public policy and legislation, including trade association payments (Item 6); and
- Institute a policy prohibiting harassment and discrimination based on sexual orientation and gender identity, as a majority of the Fortune 100 companies have done (Item 7).