Cassandra Kling’s Post

For professional investors only. We’re pleased to join a group of 39 investors representing a combined AuM of USD5.2tn in issuing a joint statement on shareholder rights. Read the joint statement here: https://lnkd.in/eMijMGN9 Upholding shareholder rights is crucial for maintaining transparency and accountability within corporations. It's worrisome to see potential barriers to filing proposals on sustainability issues, especially given their impact on investment portfolios. The SEC's role as the primary arbiter for shareholder proposals is vital for ensuring fair and transparent corporate governance. Let's keep pushing for accountability and sustainability in corporate decision-making. 💼📈 #ShareholderRights #ClimateInestment #ReturnsandResponsibilty #NordeaAssetManagement #MarketingCommunication

Yesterday was ExxonMobil's annual shareholder meeting which included the much anticipated vote about the company's directors due to ExxonMobil's lawsuit against Arjuna Capital. The high-level results are now in. The range was from a low of 87% to a high of 98% with an average of 95%. Once the company files its 8K we'll know the vote for each director. Both sides are claiming victory. Those opposed to ExxonMobil note that 87% is quite low for a director vote. Those supporting ExxonMobil note this barely broke double digits and the average is a respectable 95%. In my view, the Arjuna Capital/Follow This shareholder proposal was climate activism masked in the language of shareholder value creation. I wish climate activists would spend more time working to get a price on carbon, like through a carbon tax, than continuing to file shareholder proposals that get very little support and don't change much if they get to the vote. ExxonMobil reinforced its image as a company that can be arrogant and unwilling to engage. Filing this lawsuit was a hyper-aggresive move, made worse by not withdrawing it after Arjuna Capital vowed to never file a proposal like this again. There is reputational risk and more to ExxonMobil even if it wins the lawsuit. But what is winning? In truth, the target of ExxonMobil is the SEC. It opened the floodgates when it revised Rule 14a-8 to say shareholders could file lawsuits that have "broad social impact." It is not the job of a securities regulator to be weighing in on matters of "broad social impact." There is now the risk that the conservative Fifth Circuit Court will produce a finding that limits the rights of shareholders, of whatever size, that file legitimate shareholder proposals. I've talked to many companies and they are frustrated with the raft of activist shareholder proposals that are values-based rather than value-based. They are pleased that ExxonMobil has taken this aggressive stance--since it means they don't have to. I've also talked to many asset managers. They generally see Exxon's move as excessive, but also recognize the problem being addressed and hence the strong support for the board as shown in the voting results. In truth, this lawsuit is a proxy war with the SEC. What this specific situation illustrates it the problem with Rule 14a-8 where the aperture widens and narrows depending on the party in office. This is the focus of a piece in RealClearEnergy by Timothy M. Doyle and me, with thanks to Jude Clemente for publishing it. We make a two step recommendation. In the short term, the SEC needs to clarify Rule 14a-8, particularly this addition of "broad social impact." But long term what is needed is bipartisan legislation so this rule keeps from being a ping-pong ball from one administration to the next. https://lnkd.in/ddEnpesc

🌍 Navigating the Waves of Corporate Governance and Climate Accountability In a landmark decision that's sparking debate across the globe, CalPERS, the largest state pension fund in the United States, has taken a bold stand against ExxonMobil’s board and CEO. The dispute stems from Exxon's litigation against two small activist groups pushing for stronger climate action commitments. This move by CalPERS underscores a growing trend where financial giants and investors are increasingly holding corporations accountable for their environmental strategies. 🔗 Read the full CaIPERS statement here: https://lnkd.in/gvsNKfkx This scenario poses several questions about the future of corporate governance and the role of shareholder democracy in driving environmental policy. How will this influence global corporations, especially those with significant environmental footprints? What does this mean for the balance of power between corporate boards and the shareholders they serve? CalPERS’ stance highlights a crucial issue: the potential for significant policy shifts that could affect not just environmental strategies but also how corporations engage with their stakeholders on wide-ranging issues from worker safety to executive compensation. As we watch this situation unfold, it's clear that the implications are vast and could redefine corporate accountability standards worldwide. We’d love to hear your thoughts: How do you think this will impact corporate governance and climate-related policies in your sector? Can legal actions against shareholder activism influence corporate transparency and accountability? Ilona Millar Mary Stewart Nicki Hutley Sarah Barker #CorporateGovernance #ClimateAction #Sustainability #EnvironmentalPolicy #BCSDAustralia #Leadership #BusinessEthics

Shareholder Value Creation 2, Shareholder Activism, 0 ExxonMobil's shareholders recently reaffirmed their confidence in the board despite pressure from minority shareholder activists bent on putting through #climate-related resolutions, which, eventually, led the company to file lawsuits against these shareholders. The decisive 95% vote to re-elect all 12 board members, including CEO Darren Woods and lead independent director Jay Hooley, underscores robust investor support for Exxon’s strategic direction: in other words, what the board and management are there to do, which is create sustained shareholder value. This outcome highlights the importance that shareholders place in value creation and governance, mirroring similar scenarios at other major corporations like Chevron, where strong financial performance has outweighed activist challenges. Furthermore, Exxon’s stance on curbing excessive shareholder proposals aligns with broader concerns in corporate boards about regulatory overreach and the need to focus on sustainable business growth. At the same time, two other trends have emerged in the US: 1) large fund managers - Vanguard and BlackRock, for example - publicly stating their intention to support fewer #ESG-related shareholder resolutions and 2) a pronounced decline in the amount companies are reporting on ESG matters in their ARs. #boards #boardofdirectors #shareholders #shareholderactivism

Exxon's proxy statement lawsuit may chill investor #ESG proposals, according to Labaton Keller Sucharow LLP's Domenico Minerva and James Fee. https://lnkd.in/esSsTERT "Exxon's action against its own shareholders has captured investors' attention, causing many to ponder its impact on shareholder proposals, especially for ESG. Indeed, the lawsuit highlights companies' growing willingness to intimidate shareholders from advancing ESG proposals; yet, Exxon's resolve to continue the lawsuit after the investors withdrew their proposal raises serious concerns for participation in the corporate governance process," they write in their latest #PERSist article. #publicpensions #NCPERS

🚨 The Iris Energy class action lawsuit raises crucial questions for investors! How do shareholder rights play into such cases, and what should you do if you're affected? 🧐 Let's dive into the ripple effects it might have on the market and explore some strategic steps forward for savvy investors. In today's fast-paced investing world, understanding your rights and the landscape is vital. This isn't just about one case—it's a broader lens into corporate governance and investor vigilance. 📊 👉 Ready to dive deeper into this topic? Discover the nuances and prepare yourself to act effectively. #InvestmentStrategy #ShareholderRights #ClassAction Are you asking the right questions to safeguard your investments? 🔍

Only half a victory for corporate governance and shareholders' rights, as the judge in Exxon vs Arjuna and Follow This | Shareholders change the world predicated the dismissal of the shareholder resolution case on a commitment by Arjuna "unconditionally and irrevocably" not to submit a future proposal regarding Exxon's greenhouse gas emissions. As stated in the recent joint statement by Nordea Asset Management and large group of significant investors (here: https://lnkd.in/eMijMGN9): 1. Upholding shareholder rights is crucial for maintaining transparency and accountability in public markets. 2. The SEC's role as the primary arbiter for shareholder proposals in the US is vital for ensuring fair and transparent corporate governance there. Let's keep pushing for accountability and sustainability in corporate decision-making.

The fossil fuel giant is suing investors to intimidate them from ever trying to influence corporate decisions. ExxonMobil has launched an extraordinary lawsuit against 2 investment firms for the alleged offense of filing climate-focused shareholder proposals. The fossil fuel giant’s underlying goal: killing a federal regulatory effort that would make it easier for all US shareholders to voice environmental and social concerns about the companies they own. Critics say the company is also trying to intimidate shareholders from ever proposing such resolutions again in the future — under threat of being tied up in expensive litigation and incurring punitive financial penalties. If successful, the Exxon lawsuit could set a legal precedent wrestling control away from regulators and cracking down on activist investors working to enact more climate-friendly policies.  Exxon’s unprecedented lawsuit was filed in Jan in a Republican-dominated judicial circuit that has become the go-to court system for corporate victories. The suit aims to convince judges to supersede financial regulators who have long been responsible for deciding whether publicly traded companies are required to allow shareholder votes on resolutions.  Even though the shareholders have withdrawn their resolution, Exxon has continued to pursue the suit. According to the complaint, the company is also asking judges to punish the shareholders for filing the resolution by forcing them to pay the oil company’s attorney’s fees &“other and further relief as the Court may deem just and proper.” At issue is a 2020 initiative by President Donald Trump’s Securities and Exchange Commission (SEC), which increased the requirements on how much stock shareholders must hold and how long they have to hold it to issue proposals, thus raising the barrier to submit proposals. President Joe Biden’s SEC has since attempted to roll back the Trump-era initiatives and allow smaller shareholders to bring forth proposals to be voted on by corporate stockholders, but the proposed change has yet to take full effect and the Exxon lawsuit may weaken the SEC’s authority. “It’s hard to know how the Exxon lawsuit is going to affect potential [SEC] rule making, but certainly the intended effect of Exxon’s action is to try to undermine the authority of the SEC,” said Josh Zinner, CEO of the Interfaith Center on Corporate Responsibility, a faith and values-based organization advocating for more environmentally conscious investing. Exxon’s lawsuit, which the pro-business trade associations Chamber of Commerce&the Business Roundtable supported in an amicus brief, is the latest in a series of attacks on shareholder proposals.  But this time, “they’re really going for the jugular,” Zinner told The Lever. “What they’re trying to do is silence shareholder voices, specifically to silence the voices of shareholders who are concerned about climate risk,” he added. .” https://lnkd.in/eUnHce9d

We are into the later stages of the proxy season but significant meetings remain, including ExxonMobil's AGM today. Earlier this year, Exxon sued shareholders Follow This | Shareholders change the world and Arjuna Capital over a resolution for more ambitious climate targets. Exxon CEO Darren Woods claimed the lawsuit was to clarify shareholder proposal rules, not to challenge shareholder rights. However, CalPERS, holding $1bn in Exxon shares, will vote against Woods and the board, criticising the lawsuit as an attempt to "silence" shareholders. Brunel Pension Partnership Limited (who own Exxon through index funds and use pass-through voting) will vote against all management resolutions, deeming Exxon's litigation a threat to shareholder rights. Time will tell what the repercussions of this lawsuit will be (further green hushing?), but it highlights the crucial role of shareholder democracy amidst global corporate-political tensions. For investors interested in discussing stewardship and voting further, in June tumelo will be in Hamburg (3-4), Paris (5-7), London (12-13 Responsible Investor Europe), and Chicago (24-28 US SIF Annual Conf). Please reach out to schedule a meeting.

#ExxonMobil: Pre-declaration of voting intentions Brunel Pension Partnership will vote against all management resolutions at the forthcoming Exxon AGM, on Wednesday, 29 May, 2024. These resolutions include those relating to the election of directors and approval of executive compensation.   Brunel is taking this unusual action in response to the serious threat to shareholder rights created through Exxon suing two of its shareholders. The shareholders were raising legitimate concerns regarding actions taken by Exxon to tackle #climatechange.   In January 2024 Exxon filed a lawsuit to exclude Arjuna Capital and #FollowThis’s shareholder proposal from its 2024 proxy statement. Arjuna Capital and Follow This subsequently withdrew the resolution and committed not to resubmit, but Exxon has persisted in its litigation.   Exxon maintains that Arjuna Capital and Follow This were “activists masquerading as shareholders”. This assertion ignores the underlying tenet that shareholders (in the same share class) should be treated equally, and therefore carry the same rights. It also ignores the role of organisations, such as Follow This, to support a larger group of investors to communicate areas of shared concern to the management of large companies such as Exxon.   Whilst we accept Exxon’s right, as a publicly listed company, to challenge the resolution both through SEC channels and through the AGM process itself, we believe litigating against the proponents is wholly inappropriate, and is a significant threat to shareholder rights. It needs to be challenged.   To avoid perceived conflicts of interest, we have been transparent that we are one of the 27 asset owners co-filing a shareholder resolution at Exxon, UK with the support of Follow This.   Why does Brunel hold Exxon in the first place? Brunel only holds shares in Exxon through index-tracking products. It is with the support of our index-tracking fund provider that we have been able to undertake pass-through voting on those shares where Brunel is the beneficial owner.   Exxon statement: https://lnkd.in/enr7j-jE   Vaishnavi Ravishankar Faith Ward Arjuna Capital Follow This | Shareholders change the world ExxonMobil