ExxonMobil set the climate alarm lobby afire last week when it filed a lawsuit against a pair of activist investor groups challenging manifestly frivolous shareholder initiatives which they hope to bring up at the company’s impending annual meeting in May. The suit was filed in a Texas court January 21 against Massachusetts-based investment firm Arjuna Capital and Amsterdam-based investor group Follow This.
Reports filed by the AP, Reuters, CNBC and other legacy media sites warned that a win by Exxon in the lawsuit could have a “chilling effect” on the bringing of other climate alarm and ESG-related initiatives in the future. The reasoning supporting that claim seems somewhat specious, given that Exxon’s complaint is based on the fact that initiatives virtually identical to the ones sought by Arjuna and Follow This have been brought repeatedly in prior years and were resoundingly rejected in shareholder votes. Raising them again this year is an obvious waste of time and resources and amounts to little more than harassment.
These specific questions, in other words, have been asked and answered several times, leaving little point in raising them again just for the sake of raising them. That hardly would mean that a favorable decision for ExxonMobil in this lawsuit would chill activist investors from raising other, valid questions in the future, but that is the narrative the alarmist lobby and their supportive media have settled on. (RELATED: DAVID BLACKMON: The Biden Admin And Its Buddies Are Waging Foolish War Against Abundant Clean Energy)
Readers may wonder why the company decided to file suit against these two activist investors rather than pursue the more regular appeals process governed by the Biden SEC. The answer is pretty simple: President Biden’s appointees to the SEC decided to change up a decision process that had worked well for decades in order to make it far more difficult and bias the expected outcome in favor of the activist investors. Thus, as Reuters and other outlets note, fewer and fewer companies have pursued their appeals with the SEC over the past few years.
Here is what ExxonMobil said about it in an email to CNBC: “The breakdown of the shareholder proposal process, one that allows proponents to advance their agendas through a flood of proposals, does not serve the interests of investors. We are simply asking the court to apply the SEC’s proxy rules as written to stop this abuse and eliminate the significant resources required to address them.”
Reuters quotes one of the SEC’s own commissioners, Mark Uyeda, as saying, “Companies could always go to court on shareholder proposals, but historically viewed the SEC as a fair arbiter. This perception may have changed due to recent policy changes.” Oh. You don’t say.
So, here’s the moral of this story: When a radical president brings in appointees who destroy a system that was seen as fair by all stakeholders for decades on end and render it a basic kangaroo court, stakeholders are going to seek ways to work around the system.
There is nothing at all wrong with ExxonMobil’s decision to file a lawsuit to block these frivolous proposed resolutions that serve no one’s interests and waste everyone’s time. The company has an absolute right to pursue all remedies available to it, including within the federal courts, even if it upsets the virtue signaling gentry in the climate alarm lobby.
This is neatly analogous to the situation at the Texas border with Mexico, where Biden came into office and immediately issued a series of executive orders that blew up a system of securing the border that had been working quite well and replaced it with a system that basically and intentionally opened the country up to unchecked mass illegal immigration. Now, the administration bemoans the fact that Texas and other states are finding ways to work around his refusal to do anything constructive to slow the flow.
When any presidential administration destroys a system that work and replace them with systems intentionally designed to fail, stakeholders are going to exercise their rights to seek other remedies. That’s all ExxonMobil is doing here, and it should not come as a surprise to anyone.
David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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