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Because no one should dictate what you see.
By Steven Milloy
May 29, 2008
The green blitzkrieg hit the ExxonMobil annual shareholder meeting this week.
The meeting featured 17 shareholder proposals, the vast majority of which were filed by left-leaning "investors" seeking, in one way or another, to pressure company management into implementing the green agenda.
As a portfolio manager of a libertarian/conservative activist mutual fund, I attended the meeting to defend company shareholders the tens of millions of Americans who own ExxonMobil shares either directly or indirectly through retirement plans, mutual funds and other institutional investments. An audio recording of the meeting is available here and my remarks begin at 55:26 minutes into the meeting.
Here's what I had to say:
"Good morning. I'm Steve Milloy, portfolio manager of the Free Enterprise Action Fund, a publicly owned mutual fund. I am here on behalf of not just the Fund, but all bona fide shareholders of ExxonMobil.
"By bona fide shareholders, I mean those shareholders who have invested in ExxonMobil for the time-honored and socially responsible purpose of making money while providing society with the vital good and services that it needs. We see ExxonMobil as a company with a track record of true social responsibility that few institutions — whether public or private — can match.
"Not only is ExxonMobil perhaps the most profitable business venture in the history of capitalism, but the company helps provide society with its lifeblood, petroleum products. ExxonMobil employs more than 80,000 people and earns and returns billions of dollars to millions of investors every year.
"In the last five years ExxonMobil's share price has soared from below $40/share to above $90/share. In these uncertain economic times, what's not to like? Yet some shareholders — like many of those who will follow me today — see this success as a scourge that they intend to exploit for their own dubious social and political ends.
"They don't see ExxonMobil as a premier investment vehicle engaged in the necessary and profitable business of fueling society. They don't see ExxonMobil as one of society's top-performing wealth-creation machines. They don’t see ExxonMobil as one of our society’s top-performing job-creation machines. They don’t see ExxonMobil as one of society's top-performing pension fund investments.
"Rather, these 'poseur' shareholders see ExxonMobil as a means to advance their anti-people, anti-business and anti-capitalism social and political agenda. You will hear from some who seek to manufacture controversy over a variety of issues, including corporate governance and CEO pay.
"They don’t view such issues as means for making the company work better for shareholders, employees and customers, but rather as a means of dividing and conquering management and making it more pliable to political pressure. You will hear from shareholders who say they're worried about global warming.
"Yet they willfully ignore the latest forecast from U.N. scientists that calls for global cooling caused by Mother Nature — not global warming caused by humans — and that more than 31,000 U.S. scientists recently signed a petition decrying as unfounded the scientific claims underpinning global warming alarmism.
"The poseur shareholders instead seek to pressure management and weaken its resolve in the fight against junk science-based government regulation. You will hear from some who want ExxonMobil to focus on alternative energies like ethanol. But as CEO Rex Tillerson has rightfully pointed out, ExxonMobil sells oil and gas, not 'moonshine.' The poseur shareholders apparently want ExxonMobil profitability to be based on politically determined taxpayer subsidies and government giveaways rather than the competition of the free market.
"Ironically, the alternative energy strategy failed miserably at oil giant BP. As BP CEO John Browne chased the alternative fuel fantasy and advocated climate alarmism, his inattention to safety and maintenance led to 15 tragic deaths at the 2005 Texas City refinery explosion, the largest-ever oil spill in the Alaskan North Slope in 2006 and ensuing harm to BP's reputation and share price.
"Under new leadership, BP reportedly will ditch the alternative energy business entirely since its shares have received little, if any, uplift from renewable energy.
"s Congress seeks to humiliate and pressure oil industry executives and to strip ExxonMobil shareholders of their rightfully earned profits through a windfall profits tax, where are the poseur shareholders? Are they using their activist skills to defend the company against such political thuggery? No.
"They are instead waging a take-no-prisoners war against management. This can only harm the interests of bona fide shareholders. That is why the Free Enterprise Action Fund has proposed to have management amend the company's by-laws to no longer accept harassing and nuisance shareholder proposals.
"Our proposal would by no means eliminate poseur shareholders, but it would stop the annual meeting from being a forum for their campaign against ExxonMobil's bona fide shareholders. We call on ExxonMobil's bona fide shareholders and management to band together to fight the predatory Exxon-haters.
"As for those shareholders who don’t care for the oil and gas business, get out. There are a host of alternative energy companies whose subsidies you can invest in. The rest of us will be quite happy to purchase your shares and enjoy the profits of true social responsibility. Thank you."
Although our proposal received less than 3 percent of the shareholder vote, perhaps a more encouraging reaction to our proposal was reported by BusinessWeek: "Indeed, the loudest applause of the meeting greeted Steven Milloy… who proposed a prohibition on shareholder resolutions such as those proposed by the Rockefellers."
The "crowd" opposes the greens. We just need to stiffen the spines of corporate managers.
[Disclosure: The Free Enterprise Action Fund owns about 5,500 shares of ExxonMobil stock. Mr. Milloy has been affiliated with non-profit organizations who have in the past received financial support from ExxonMobil.]