Calpers, the largest state public pension fund in the US, will vote against all Exxon Mobil Corp. (NYSE:XOM) directors, saying the oil giant is undermining shareholder rights.
Exxon sued two climate-focused investors earlier this year, accusing them of abusing the shareholder-proposal process. When the investors withdrew their proposals, Exxon opted to continue legal proceedings, asking the courts to provide more clarity on how the Securities and Exchange Commission interprets its own rules.
“This is a real problem for a shareholder like Calpers, where we believe that our voice matters,” Chief Executive Officer Marcie Frost said during a press conference Monday. Calpers has a long history of fighting for shareholder rights “and that’s why we can’t just sit idly by.”
Calpers and other environmentally minded shareholders believe Exxon’s suits will have a chilling effect on investors looking to raise legitimate concerns about climate change and corporate governance. But Exxon says allowing proposals that have repeatedly failed undermines the process. The oil giant said the sponsors of such proposals are activists seeking publicity.
“It’s unclear why Calpers is spending their time and energy defending the abuse of a shareholder process by proponents who have publicly stated they have no interest in creating shareholder value,” Exxon said in a statement. Those proponents are attempting “to silence the voices of up to 90% of our voting shareholders who have rejected the proposal twice.”
The row with Calpers adds to an already incendiary proxy season. Earlier this month, Glass Lewis & Co. recommended investors vote against Exxon Lead Director Joseph Holley due to the company’s “aggressive” tactics in the shareholder suit. Exxon fired back with accusations that Glass Lewis failed to disclose its relationship with a group that sponsors many of the same proposals.
Calpers manages roughly $490 billion of assets and owns about 0.2% of Exxon stock, according to data compiled by Bloomberg.