April 30, 2008 / 12:53 PM / 10 years ago

Rockefellers call for change at Exxon Mobil

NEW YORK (Reuters) - Members of the Rockefeller family are calling on Exxon Mobil Corp (XOM.N) to make governance changes and increase spending on alternative fuels, sharpening the focus on the company’s practices as oil soars close to $120.

A customer pumps gas at a Mobil gas station in Medford, Massachusetts April 30, 2008, one day before Exxon Mobil reports its first quarter earnings. REUTERS/Brian Snyder

John D. Rockefeller founded the Standard Oil Co in 1870 and it became a precursor to Exxon Mobil. Exxon Mobil is the world’s largest publicly traded oil company based on market capitalization and is a favorite target of consumer advocate groups and politicians unhappy with record prices for oil and gas and their effect on the environment.

Fifteen descendants of the oil baron are involved in four shareholder resolutions seeking changes at Exxon, including dividing the CEO and chairmanship positions held by Rex Tillerson.

Peter O’Neill, great-great-grandson of Rockefeller, said 66 of the 78 adult Rockefellers currently supported their stance.

Exxon posted the largest ever annual profit by a U.S. company last year and its first-quarter results, scheduled for Thursday morning, are expected to be at or near record levels.

But the Rockefeller’s said the company was too focused on short-term windfalls. They said the company’s reluctance to invest in alternative energy could result in lost profits down the road.

Neva Rockefeller Goodwin, great granddaughter of John D. Rockefeller and a Tufts University economist, called on Exxon to reconnect with the forward-looking vision of her great grandfather.

“Kerosene was the alternative energy of its day,” Goodwin said. “Part of John D. Rockefeller’s genius was in recognizing early the need and opportunity for a transition to a better, cheaper and cleaner fuel.”

The group, which also seeks to establish a task force to study the consequences of global warning on poor economies, called on Exxon to reduce greenhouse gas emission at its own operations and adopt a renewable energy policy.

Exxon said it supports the Rockefeller’s right to use the shareholder proposal process to make the family’s views known to other stakeholders.

The company has asked shareholders not to support the proposals and said it believes the most effective leadership structure for the current company is for Tillerson to serve as both chairman and CEO.

A Mobil gas station is seen in Medford, Massachusetts April 30, 2008, one day before Exxon Mobil reports its first-quarter earnings. REUTERS/Brian Snyder

It is unclear how many shares the Rockefeller family controls. Exxon was able to identify 12 of the 15 Rockefellers associated with the shareholder resolution and said they collectively own around 332,000 of the company’s 5.4 billion shares — or about 0.006 percent of outstanding shares.

The company downplayed the importance of the Rockefellers backing the split.

“We’re focused on maximizing the return to the shareholder and profitability,” said Exxon spokesman Alan Jeffers. “Members of the Rockefeller family are well known for their relationship with the company’s founder. But we have 2.5 million individual shareholders.”

About 40 percent of the company’s shareholders voted for the nonbinding proposal to split the chairman and CEO positions last year.

Political scrutiny on Exxon has also increased as oil and gasoline prices have soared.

Democratic presidential candidates Hillary Clinton and Barack Obama have both pointed to Exxon’s record 2007 earnings as a symbol of an oil industry run amok. Both candidates are in favor repealing tax breaks that have been enjoyed by oil companies.

“Last year, Exxon Mobil made $40 billion in profits. So you paid through the roof and they made out like bandits,” Clinton said earlier this week in North Carolina.

“Middle class families are paying too much and oil companies are not paying their fair share.”

Analysts noted that, even in a non-election year, it is never easy when oil companies make record profits.

“Politicians see Exxon and they see dollar signs. They see it as an untapped resource,” Oppenheimer & Co analyst Fadel Gheit.

He noted the record profits have pleased many shareholders.

Exxon “must be hiding under their pile of cash,” he added.

Exxon’s annual meeting is scheduled for May 28.

Writing by Edward Tobin and Michael Erman; Editing by Andre Grenon

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