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Exxon Mobil Corporation: Shareholder Resolution on Non-Discrimination

Each year since 2000, the Human Rights Campaign Foundation, in coalition with several institutional investors coordinated by the New York City Comptroller's Office, has filed a shareholder resolution that encourages Exxon Mobil Corp. (ExxonMobil, NYSE: XOM) to add sexual orientation and, since 2008, gender identity to its non-discrimination policy.

2010 will be the eleventh year of the resolution at ExxonMobil, a decade after Exxon Corp. purchased Mobil Corp., closing that company's domestic partner benefits program and removing explicit protections based on "sexual orientation" from that company's non-discrimination policies.

Each spring, ExxonMobil mails a "Notice to Shareholders of Annual Meeting" (also known as the "proxy statement") which contains the date and location of the annual shareholders meeting in Dallas, Texas, and contains the text of management and shareholder proposals – including the one filed by HRC in coordination with the New York City Comptroller's Office and other shareholder advocacy groups. ExxonMobil's management makes a recommendation for shareholders to vote either FOR or AGAINST each resolution; they have consistently recommended AGAINST the resolution to amend its non-discrimination policy.

ExxonMobil does not explicitly prohibit sexual orientation or gender identity in its non-discrimination policies, like the vast majority of other Fortune 100 companies has.

If you own shares of ExxonMobil, don't sell them – shareholders as of April 6, 2010 should vote FOR the resolution (AGAINST management's recommendation) by mailing back their proxy ballot or by voting online before the company's annual meeting on May 26, 2010. The 2010 Exxon Mobil Proxy Statement listed the resolution as "Item 6 - Amendment of EEO Policy."

Eligible shareholders must vote on a proposal or abstain in order to count; blank votes or non-votes are automatically counted in the management's favor. While you're at it, make sure that your account manager knows that you want to vote your shares in favor of all resolutions that would add sexual orientation and gender identity to a company's non-discrimination policy. To be eligible to vote, a shareholder must have held at least one share of common stock as of the "record date" specified in the proxy statement.

If you don't own shares of ExxonMobil, make sure to purchase your gas from more friendly establishments – check out the HRC Buying for Equality guide published each year for suggestions. Check the portfolios of mutual funds or pension funds you own for ownership of ExxonMobil; the easiest way is to look at Equity Holdings in the fund's most recent annual report which is usually available online. If the fund does hold shares of ExxonMobil, write or call the fund's manager or administrator to let them know about our shareholder proposal and why it's important to vote in favor of the resolution.

Shareholder Votes FOR the Resolution, By Year

Year Date Votes FOR
Resolution
(percent)
Year 11 May 2010 --
Year 10 May 2009 39.3%*
Year 9 May 2008 39.6
Year 8 May 2007 37.8
Year 7 May 2006 34.6
Year 6 May 2005 29.4
Year 5 May 2004 28.9
Year 4 May 2003 27.1
Year 3 May 2002 23.9**
Year 2 May 2001 13.0
Year 1 May 2000 8.2

Shareholders typically follow management's recommendations to vote FOR or AGAINST a proposal. However, if the management of a company were in favor of a proposed resolution, they would generally settle the resolution with the resolution's filer(s) prior to taking it to the shareholders, to avoid unnecessary attention to company practices.

The resolution's approval from ExxonMobil shareholders and momentum is extremely positive.

*Percentage shareholder approval decreased by 0.3% in 2009. This decrease probably represents normal changes in ownership of the stock and does not indicate a downward trend.

**Shareholder approval jumped significantly from 12% in 2002 to 28.9% in 2004, largely due to the influential shareholder advisor Institutional Shareholder Services (ISS):

"(T)he company's current EEO statement could prevent it from attracting and retaining talented employees and could expose the company to possible litigation should any transgressions occur," explained ISS, noting that several of ExxonMobil's competitors, such as Chevron, not only have protective language but also extend partner benefits. "The company has created unnecessary controversy."

Why the Resolution Didn't Include "Gender Identity" until 2008

At the time of the first resolution filed with ExxonMobil in 2000, there was little experience with how to use shareholder resolutions as an advocacy tool, and it was thought that "sexual orientation" and "gender identity" would be considered separate issues and thus could be challenged with and thrown out by the Securities and Exchange Commission, which oversees such matters.

In the two years prior to 2008, the Human Rights Campaign Foundation supported the efforts of shareholders that filed resolutions based on the Equality Principles, which prohibit discrimination based on both sexual orientation and gender identity. The first such successful resolutions moved forward in 2006, including a resolution filed by the New York City Comptroller's Office at Micron Technology, which received a favorable vote by an overwhelming 55.5 percent of shareholders – a rare showing of shareholder opposition to management recommendations, particularly in its first year. These successes encouraged the group of shareholders that file the ExxonMobil resolution, led by the New York City Comptroller's Office, to take that route in 2008.

Why the Resolution Doesn't Include Domestic Partner Benefits

Employee benefits are generally considered outside the scope of what shareholder resolutions can address, according to previous decisions by the SEC. HRC will continue to advocate for all of these workplace policies and practices with Exxon Mobil Corp. through the Corporate Equality Index, its annual State of the Workplace report and other methods of advocacy as they arise.