Chevron shareholders reject independent chairman
MIDLAND Texas (Reuters) - Shareholders of Chevron Corp (CVX.N), the second-largest U.S. oil company, rejected a proposal on Wednesday to split the roles of chairman and chief executive, both currently held by John Watson.
The vote casts further doubt on the long-running campaign by shareholder activists to force large U.S. corporations to separate the positions, which they say would support greater oversight and transparency.
Similar proposals have been rejected by shareholders at JPMorgan (JPM.N), Exxon Mobil (XOM.N) and other corporations in the past year, further consolidating power among top leaders.
While shareholder activists have convinced some companies to separate the roles - with Bank of America Corp (BAC.N) perhaps the only major success story - the broader trend indicates the campaign for greater oversight could be slipping.
About 81 percent of the 1.5 billion shares cast at Chevron's annual meeting in Midland, Texas, voted against the proposal, which was sponsored by the Unitarian Universalist Association.
Chevron said the flexibility to decide for itself whether the roles should be combined was key to staying competitive.
"The board votes every year on keeping the positions together and this year was no different," Watson said at the meeting, held at the Permian Midland Petroleum Basin.
The meeting was held in West Texas so Chevron could highlight its growing Permian shale operation, which Vice Chairman George Kirkland told Reuters earlier this week would become a top-five asset by 2020.
Chevron is also spending more than $20 billion on two major liquefied natural gas projects off the northwest coast of Australia, though costs have spiked considerably.
Representatives of a union representing offshore Australian workers attended to ask Watson to improve labor relations, which they described as strained. Some other unions have said the LNG projects have seen higher costs due to the use of the maritime workers union.
Watson said the cost overruns were due to weather, the rise in the value of the Australian dollar and increasing material prices. He did not comment on labor costs, but said Chevron is committed to using organized labor in the country.
That satisfied Padraig Crumlin, national secretary of the Maritime Union of Australia.
"If we can't establish a fundamental relationship with Chevron management, then it's no good," Crumlin said.
Shareholders rejected a non-binding say on executive compensation, as well as proposals to require the company to disclose more information on fracking operations, details on why it operates in Myanmar and other politically unstable countries, and data on corporate donations exceeding $5,000.
Shareholders declined to lower the threshold of outstanding shares needed to call a special meeting to 10 percent. The California-based company's bylaws stipulate a 15 percent threshold.
PricewaterhouseCoopers LLC [PWC.UL] was confirmed as the company's auditor, and all 12 members of the board of directors were reelected, including Watson.
Chevron shares were up 0.3 percent at $123.18 on Wednesday afternoon.