A Review of the Nigerian Energy Industry

Chevron investors reject chairman-CEO split

Oil Companies' CEO's Testify At Senate Finance Hearing On Rising Energy Prices29 May 2014, News Wires – Shareholders of California-based supermajor Chevron have rejected a proposal to split the roles of chairman and chief executive, positions both currently held by John Watson.

The vote casts further doubt on the long-running campaign by shareholder activists to force large US corporations to separate the positions, which they say would support greater oversight and transparency, Reuters reported.

A similar proposal was rejected by shareholders at ExxonMobil in the past year.

While shareholder activists have convinced some companies to separate the roles, the broader trend indicates the campaign for greater oversight could be slipping.

About 81% 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, according to Reuters.

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.

The meeting was held in West Texas so Chevron could highlight its growing Permian shale operation. The company sees the Permian as a shining asset in its portfolio.

Chevron is also spending more than $20 billion on two major liquefied natural gas projects off the north-west coast of Australia, Wheatstone and Gorgan. Costs for those projects have spiked considerably.

Representatives of a union representing offshore Australian workers attended to ask Watson to improve labour 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 workers union.

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 labour costs, but said Chevron is committed to using organised labour in the country.

Shareholders also rejected a non-binding say on executive compensation, as well as proposals to require the company to disclose more information on hydraulic fracturing operations, details on why it operates in Myanmar and other politically unstable countries, and data on corporate donations exceeding $5000.

PricewaterhouseCoopers was confirmed as the company’s auditor, and all 12 members of the board of directors were reelected, including Watson.

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