US: Rockefellers Seek Change at Exxon

Publisher Name: 
The New York Times
HOUSTON - The Rockefeller family built one of the great American
fortunes by supplying the nation with oil. Now history has come full
circle: some family members say it is time to start moving beyond the
oil age.

The family members have thrown their support behind a shareholder
rebellion that is ruffling feathers at Exxon Mobil, the giant oil
company descended from John D. Rockefeller's Standard Oil Trust.

Three of the resolutions, to be voted on at the company's
shareholder meeting on Wednesday, are considered unlikely to pass,
even with Rockefeller family support.

The resolutions ask Exxon to take the threat of global warming more
seriously and look for alternatives to spewing greenhouse gases into
the air.

One resolution would urge the company to study the impact of global
warming on poor countries, another would encourage Exxon to reduce its
emissions and a third would encourage it to do more research on
renewable energy sources like solar panels and wind turbines.

A fourth resolution, which the Rockefellers are most united in
supporting, is considered more likely to pass. It would strip Rex W.
Tillerson of his position as chairman of Exxon's board, forcing the
company to separate that job from the chief executive's job.

A shareholder vote in favor of that idea would be a rebuke of Mr.
Tillerson, who is widely perceived as more resistant than other oil
chieftains to investing in alternative energy.

The Rockefellers say they are not trying to embarrass Mr. Tillerson,
also Exxon's chief executive, but think it is time for the company
to spend more of its funds helping the nation chart a new energy

"Exxon Mobil needs to reconnect with the forward-looking and
entrepreneurial vision of my great-grandfather," Neva Rockefeller
Goodwin, a Tufts University economist, said in a statement to

"The truth is that Exxon Mobil is profiting in the short term from
investments and decisions made many years ago, and by focusing on a
narrow path that ignores the rapidly shifting energy landscape around
the world," she added.

The resolution on Exxon's chairmanship was offered for several years
before the Rockefellers became publicly involved and last year was
supported by 40 percent of shareholders who voted. Royal Dutch Shell
and BP already separate the positions of chairman and chief executive,
as do many other companies.

"You need a board asking the tough questions," Peter O'Neill, a
private equity investor and great-great-grandson of John D.
Rockefeller, said in an interview. "We expect the company to figure
out how in this changing world to adjust."

Kenneth P. Cohen, vice president for public affairs at Exxon, said the
shareholders pushing the resolutions were "starting from a false
premise." He added that the company was already concerned about
"how to provide the world the energy it needs while at the same time
reducing fossil fuel use and greenhouse gas emissions."

Fifteen members of the family are sponsoring or co-sponsoring the four
resolutions, but it appears that some have much more solid support in
the sprawling family than others.

Mr. O'Neill said that 73 out of 78 adult descendants of John D.
Rockefeller were supporting the family effort to divide the chief
executive and chairman positions. The goal of that resolution is to
improve the management of the company, which could strengthen its
environmental policies and improve more traditional pursuits like
exploring more aggressively for new oil reserves.

David Rockefeller, retired chairman of Chase Manhattan Bank and
patriarch of the family, issued a statement saying, "I support my
family's efforts to sharpen Exxon Mobil's focus on the
environmental crisis facing all of us."

The Rockefeller family has always been identified with oil and the
legacy of Standard Oil, but for several generations, it has also been
active in environmental causes and acquiring land for preservation.
John D. Rockefeller's grandsons devoted themselves to conservation
issues, and Rockefeller charitable organizations have long promoted
efforts to fight pollution.

Ms. Goodwin, one of the most vocal Rockefellers on the environment
today, is co-director of the Global Development and Environment
Institute at Tufts.

In recent years, family members have quietly encouraged Exxon
executives to take global warming seriously, but their private efforts
did not go far. Until now, they have avoided publicity in their
efforts, and the youngest Rockefeller generations have generally
shunned attention.

Exxon executives said the company spent $2 billion over the last five
years on programs to reduce emissions and improve efficiencies and had
plans to spend $800 million on similar initiatives over the next three
years. They said the company reduced the release of greenhouse gases
from its operations last year by 3 percent, and it was working with
Stanford to research biofuels and solar and hydrogen energy.

Since taking over the company two years ago, Mr. Tillerson has
gradually shifted the company's positions away from those of his
predecessor, Lee R. Raymond, who was considered a skeptic on the
science of global warming.

But with gasoline prices soaring and concern growing over global
warming, Exxon, the biggest of the investor-owned oil companies, is a
target for politicians and environmentalists. Chevron, BP and Shell,
Exxon's largest competitors, have given their investments in
renewable fuels a much higher profile.

Similar or identical environmental proposals have not passed at
previous Exxon shareholder meetings, but the public support of the
Rockefeller family has given old efforts new energy.

The involvement of the Rockefellers, said Robert A. G. Monks, a
shareholder who has been urging a separation of the chairman and chief
executive jobs for years, shows that "this is not just a matter of
the self-appointed good guys against the cavemen, but also a matter of
the capitalists wanting to make money."

Nineteen institutional investors with 91 million shares announced last
week that they would support resolutions asking Exxon to separate the
top executive positions and tackle global warming. They included the
California Public Employees' Retirement System, the California State
Teachers' Retirement System and the New York City Employees'
Retirement System.

California's treasurer, Bill Lockyer, who serves on the boards of
the two California funds, said the company's "go-slow approach"
on global warming "places long-term shareholder value at

Under Exxon's rules, a shareholder proposal that passes is not
binding without the support of the board. But Andrew Logan, director
of the oil program at Ceres, a coalition of institutional investors
and environmentalists, said, "boards tend to strongly consider
proposals that get significant support."

Paul Sankey, an oil analyst at Deutsche Bank, said that he thought a
separation of the chief executive and chairman jobs might be a good
management move and that "we might see a mild benefit to Exxon's
public image." But he added, "On balance, we wouldn't expect any
change in strategy."

The Fraternal Order of Police, which represents public safety
officers, whose pensions are invested in Exxon, has publicly opposed
the shareholder effort to change company policy.

"The Rockefeller
resolution threatens to degrade the value of Exxon Mobil," the
organization wrote in a letter to Mr. Tillerson that criticized the
splitting of the top executive jobs.
AMP Section Name:Energy
  • 183 Environment
  • 190 Natural Resources