AP Business Writer
DALLAS (AP) — Activists grilled Exxon Mobil Corp.'s CEO Wednesday on environmental issues and his compensation package, but shareholders stood behind management that delivered the biggest profit ever for a U.S. company last year.
Shareholders voted down all 11 resolutions at the company's annual meeting, which was a toned-down affair compared with protest-filled gatherings of recent years.
Chairman and Chief Executive Rex W. Tillerson defended the company's record on climate change, which many scientists blame on burning oil and other fuels. He said oil and gas will continue to be the world's dominant fuels until at least 2030, meeting nearly two-thirds of world demand.
Exxon Mobil earned $45.2 billion last year, as oil prices climbed to record highs near $150 a barrel. Exxon's profit began to fall late in the year as oil prices plunged, and earnings in the first three months of 2009 fell 58 percent from a year earlier.
Despite the worldwide economic slowdown, oil prices have been creeping back up for several weeks — an increase that Tillerson said couldn't be explained by any changes in supply and demand.
"There has really been no substantial change in demand; there's been little to no change in inventories … so why the $10 (per barrel) run-up in the last month?" Tillerson asked reporters after the meeting. He said the price increase seemed a reaction to a weak dollar and speculation.
Crude, which opened the month below $52 per barrel on the New York Mercantile Exchange, rose above $63 on Wednesday.
Most of the shareholders who sponsored resolutions were more interested in environmental and executive pay issues.
Activists praised rival Chevron Corp. for its efforts to track and report on the carbon content of its products and challenged Exxon to do the same.
Patricia Daly of faith-based institutional investor the Sisters of St. Dominic in Caldwell, N.J., said Chevron showed good faith and was preparing for a future in which carbon emissions will be more tightly regulated. At Exxon Mobil, she said, "I'm not confident yet that we're ready."
Ann Rockefeller Roberts, a descendant of John D. Rockefeller, who built the company that became Exxon, proposed that the company study the likely effects of climate change through 2030. She said unless the company increased its focus on renewable energy, it would eventually suffer financially.
Tillerson said the company was investing in research by its own scientists and others into the cause and effects of climate change, which he called "a serious risk-management issue."
Other shareholder resolutions called for splitting the duties of chairman and CEO, and several focused on executive compensation. Some speakers raged at Tillerson's 2008 compensation package, which was worth $23.9 million, according to an analysis by The Associated Press.
Mari Mather of Massachusetts-based NorthStar Asset Management Inc., said if Tillerson retires at age 65 he could leave with a package worth $670 million including stock options. To that, Tillerson chuckled, and there was scattered applause from shareholders meeting inside a massive symphony hall.
Only two shareholder resolutions — letting shareholders cast a nonbinding vote on executive pay every year, and making it easier for shareholders to call a special meeting — got more than 40 percent support.
In his state-of-the-company address to open the meeting, Tillerson said Exxon Mobil was investing carefully in new oil and gas projects — it plans to boost capital spending this year to $29 billion from about $26 billion last year.
Tillerson said demand for oil and gas will grow through 2030 as the world's population grows and developing countries become more affluent, with more drivers. Exxon will need those markets to offset slow growth in the U.S. and Europe.
Tillerson said after the meeting that gasoline used for vehicles in the U.S. may have peaked last year.
"We do think motor gasoline demand has by and large peaked in the United States and will likely continue a rather slow and steady decline in the years ahead" as cars become more efficient and more Americans buy hybrids, he said.
Falling gasoline demand will lead to fewer refineries — "there are some marginal refiners in the U.S. that probably will not survive," Tillerson said. He said Exxon doesn't see any need for new U.S. refineries and will continue to rework it existing facilities.
Exxon Mobil shares fell $1.03 to $68.78 in afternoon trading.
Copyright 2009 The Associated Press.