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Earlier today, my colleague Douglas McIntyre argued that the Rockefeller family shouldn't "bite the hand that feeds" it at Exxon Mobil Corp. (NYSE: XOM), a company founded by ancestor John D. Rockefeller. I couldn't disagree more.The family is advocating a series of proposals such as creating an independent chairman and pushing the world's largest oil company to be more environmentally friendly seem pretty sensible to me. First of all, corporate governance experts advocate separating the role of chairman and chief executive as a good idea for all companies, not just successful ones. This is a good way to prevent a company from falling under the control of an imperial CEO.
Also, I can't understand why McIntyre thinks that "developing new forms of alternative energy is essentially the job of smaller companies which will eventually compete with Exxon for business." Other oil companies including BP Plc. (NYSE: BP) are moving headlong into alternative energy. Even Exxon, which argues that wind, solar and biofuels will account for 2% of global energy demand by 2030, isn't totally opposed to the idea of alternatives to oil.
According to a statement on its Web site, "ExxonMobil is taking to address the risk of climate change. These included working to improve energy efficiency and fuel economy, and groundbreaking research into low-emissions technologies." The company, of course, argues that the world will need petroleum-based energy for some time to come.
Finally, the idea that shareholders should just sit back and let management do whatever it wants couldn't be more wrong. Companies are owned by shareholders and are supposed to be working in their best interests. Despite record profits, Exxon shares have barely budged this year. If the Rockefellers think the company can do better, the company should at least hear them out.
Reader Comments (Page 1 of 1)
1. I completely agree on separating the CEO and Chairman of the Board and have voted my shares in favor of that. Unfortunately, XOM and GE oppose that move and they will prevail due to the proxies they hold. Look at how poorly GE stock has performed since 2000 and Immelt still has his job!
Keep trying. I fail to see how a CEO that has no "boss" can perform at his best. Maybe XOM will do this on their own, but don't bet on it.
Posted at 4:30PM on Apr 30th 2008 by Bruce E Warnock
2. When ExxonMobil believes that wind/solar will be PROFITABLE (ask BP about that...), the Company will invest in those sources of energy.
Why aren't liberals complaining about the Rockefellers immense wealth that I am sure is safely tucked away from INCOME TAXES in trusts and Foundations?
I believe the trust fund parasites of the current Rockefeller family should just continue spending their tax free millions that the old man left to them and leave running an energy company to the experts at ExxonMobil.
Posted at 4:30PM on Apr 30th 2008 by Bernie R.
3. I agree Jonathan. When I read Doug's post earlier is smacked of irony. I mean, the whole article starts with "Don't bite the hand that feeds you" - yet the Rockefeller's started the whole damn thing, they were the hand that fed. A hardcore "American Values" Republican stating that people should keep opinions to themselves - listen to the BIG MAN. How laughable.
A smart company (and person) should realize that soaring profits at the expense of a country's domestic and economic security is not a sustainable path. Oil is as much of a utility as electricity. Exxon will have wished it listened to it's maker when it's being regulated. The economic interests of the country outweigh the greed of one.
I also enjoy Bernie's comment that expressing an opinion equals "running an energy company." Trying to change this argument into why are rich people rich - that's rich. It's about abusing power at the expensive of those below you, and furthering what's in the best interest of few.
Posted at 6:26PM on Apr 30th 2008 by Jeff
4. Could the Rockefellers possibly be any later to this game? And, do they really believe that Exxon is going to lead the charge into renewables? They should do John D. proud and create a fund that invests in renewable energy. Until the public at-large gets with the program, and I doubt it will any time soon, green energies will resemble your crazy uncle puttering around in his shed occasionally emerging with something interesting yet wholly impractical. You can forget solar and wind except in limited circumstances, we already have the best form: atomic energy. Eventually we'll get around to perfecting it but until then we'll take our Naked Lunch a gallon at a time.
Beltway Greg
Posted at 10:20PM on Apr 30th 2008 by Beltway Greg