Stockholm (NordSIP) – A group of asset owners and managers representing $5.2 trillion worth of assets has issued a joint statement expressing concern over threats to shareholder rights in the United States (US). The co-signatories of the Investor Statement on Shareholder Rights issued on 28 May 2024 include 16 major Nordic institutions.
The aim of the statement is a call for the Securities and Exchange Commission (SEC) to remain the arbiter of shareholder proposals in the US. The signatories are concerned by an emerging trend for corporations to turn to the courts as a means of countering what they consider to be unreasonable or politically motivated shareholder proposals. The main case in point is the ongoing litigation pursued by ExxonMobil against Arjuna Capital and campaign group Follow This. While the latter is no longer being sued, mainly because the NGO is based in the Netherlands, ExxonMobil is still proceeding with its suit against Arjuna Capital even though the contentious resolution has been withdrawn.
The joint statement calls on companies to take a more constructive approach when faced with shareholder resolutions, with a preference for dialogue top resolve procedural or qualitative objections. However, some US corporations like ExxonMobil consider climate or sustainability related proposals to be ideologically or politically driven and therefore time wasting and counter to their financial interests. The statement signatories take the opposite view, believing sustainability issues to be material to the long-term performance of their investee companies.
Pension giants stirring
The mainly Northern European signatories are joined by several US asset owners including the California State Teachers’ Retirement System (CalSTRS). Last week the California Public Employees’ Retirement System (CalPERS) issued its own strongly worded statement denouncing ExxonMobil’s actions and signalling its intention to vote against the company directors and CEO Darren Woods. According to CalPERS, ExxonMobil’s lawsuit is destructive and reckless. In co-signing the statement CalPERS executives Marcie Frost and Theresa Taylor commented: “We hope ExxonMobil’s directors will reconsider the lawsuit, an effort that seems more suited to schoolyard bullying than corporate leadership.”
On 24 May 2024 Norges Bank Investment Management (NBIM), which hold more than $5 billion worth of ExxonMobil shares, announced that it will vote against the reappointment of Darren Woods and lead independent director Joseph Hooley. NBIM has had a longstanding objection to Woods’ dual role as ExxonMobil Chair and CEO.
