TEXT OF INTERVIEW
Kai Ryssdal: One of the great families of American business is hoping it’s still got some influence more than 125 years after their great-great-grandfather founded what we know today as Exxon Mobile.
Back then, the company was called Standard Oil, but present-day members of the Rockefeller family want the company to move beyond oil.
They’re sponsoring a shareholder resolution at the annual meeting tomorrow that would force Exxon to split the roles of chairman of the board and CEO and so perhaps slightly shift the company’s focus.
Robert Hillman’s a professor of law at the University of California, Davis.
Professor Hillman, good to have you with us.
Robert Hillman: Pleasure.
Ryssdal: Let’s think about what the Rockefellers want to do with this proposal. They’re concerned, at least in part, that Mr. Tillerson, the CEO and chairman of Exxon Mobile, isn’t thinking far enough ahead, perhaps, for this company and investing more in alternative energies, right?
Ryssdal: Do you think this, then, will make their case any more plain to the public?
Hillman: Well, it’s probably the best way of drawing management’s attention to this concern. Shareholders really have no power other than the power to express their opinion through a vote and management does heed what shareholders are saying if there’s sufficient support among the shareholders at the vote.
Ryssdal: But they’ve been trying to do this now for four, five, six, seven years, the Rockefellers have.
Hillman: Yes, and they have a fairly significant level of support among the shareholders; not enough to compel management to implement this proposal, but enough to require management to pay attention to what they’re saying.
Ryssdal: It’s worth a note that even though they’re the great-great-grandchildren of John D. Rockefeller, who started the company, they are not by any means in control of this company.
Hillman: Absolutely not. Ownership is spread across tens of thousands of shareholders and no institution acting by itself is in a position to exercise control on the corporation.
Ryssdal: Now if their names weren’t Rockefeller, would you and I be having this conversation?
Hillman: Probably not.
Ryssdal: Yeah, a short way of asking how successful is shareholder activism like this?
Hillman: Well, it’s not entirely successful if it’s measured solely in terms of whether the shareholders are able to get a majority vote behind their proposal. What this kind of proposal is designed to do is put pressure on management, to shine a light on the corporation, an attempt to get the corporation to implement these reforms voluntarily.
Ryssdal: Well, give me your odds here. What do you think the odds of success might be for the Rockefellers versus Exxon Mobile tomorrow and is that really the point? Maybe it’s all about publicity?
Hillman: It’s all about publicity and it’s all about not tomorrow, but next year and I think that the odds of success tomorrow are not terribly great, but the odds of implementing this proposal over the next 12 to 18 months are fairly good.
Ryssdal: What do you think John D. Rockefeller himself would have thought of his descendants taking on the company like this?
Hillman: Oh, you would have to sit down with John D. Rockefeller and explain quite a bit to him because we’re in different times. It’s a different culture for valuing corporations. If you could wake John D. Rockefeller from the dead and ask him to respond quickly to what’s going on, he would not like it.
Ryssdal: Robert Hillman is a professor of law at the University of California, Davis. Professor, thanks so much for your time.
Hillman: My pleasure. Thank you.
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