(Adds details on board vote, union, updates stock)
By Ernest Scheyder
MIDLAND, Texas May 28 Shareholders of Chevron
Corp, 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, Exxon Mobil 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 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
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
PricewaterhouseCoopers LLC 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
(Editing by Franklin Paul, Meredith Mazzilli and Matthew Lewis)