The US oil giant, which unapologetically favors petroleum investment despite its negative climate impacts, has adopted a more aggressive posture towards activists at this year's virtual meeting compared with years past.
ExxonMobil has sued two shareholder groups, NGO Follow This and activist fund Arjuna Capital, which sought an investor vote on a measure to limit emissions.
Its suit, which includes seeking legal fees, has drawn criticism from shareholders like Norway's sovereign wealth fund and California Public Employees' Retirement System (CalPERS).
A large number of votes against ExxonMobil board nominees would signify shareholder disgust with the company's tactics.
CalPERS called climate change "a serious threat to long-term investment returns," while arguing that ExxonMobil's litigious tactics could have "devastating" consequences for corporate governance.
"If ExxonMobil succeeds in silencing voices and upending the rules of shareholder democracy, what other subjects will the leaders of any company make off limits? Worker safety? Excessive executive compensation?"
CalPERS said it would vote against all 12 board nominees "to send a message that our voices will not be silenced."
The move comes after Arjuna and Follow This demanded a shareholder vote in December on a plan directing ExxonMobil to accelerate emission reductions, requiring targets and timetables to lower "Scope 3" emissions.
The category of emissions includes those created by consumers using a company's product, such as the CO2 released by the burning of oil and gas produced by a fossil fuel company.
ExxonMobil argued that the proposal was the same as one rejected by nearly 90 percent of company shareholders at the 2023 meeting.
Such proposals are "expensive and time-consuming to address," said ExxonMobil, adding that the proposal "does not seek to improve ExxonMobil's economic performance or create shareholder value," according to the suit.
"Defendants' overarching objective is to force ExxonMobil to change the nature of its ordinary business or to go out of business entirely," said the lawsuit.
Soon after ExxonMobil filed the suit in federal court in Texas in January, Arjuna and Follow This withdrew the proposal.
However, ExxonMobil has persevered with the litigation, asking a federal judge to declare that the measure can be omitted from the company's proxy statement.
US District Judge Mark Pittman last week approved a motion to dismiss the case against Netherlands-based Follow This, ruling that the court lacks personal jurisdiction over the group. But Pittman permitted the suit to go forward against Arjuna.
In a May 27 letter to ExxonMobil, Arjuna managing partner Natasha Lamb rejected the oil giant's characterization, saying her firm's focus on climate change "is consistent with, and indeed necessary for, securing future financial success."
Lamb pledged to refrain from further climate proposals at ExxonMobil, adding, "I expect that Exxon will now, albeit belatedly, do what justice and a respect for the rights of shareholders require and withdraw its lawsuit."
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