US state officials urge votes against directors as Exxon sues climate activists

By Ross Kerber

(Reuters) -A group of state financial officers and other public and labor leaders called on Tuesday for major asset managers to vote against top Exxon directors, citing the U.S. oil company's ongoing lawsuit against climate activists.

The group including New York City Comptroller Brad Lander and the state treasurers of Connecticut, Nevada and other states called for votes against Exxon CEO and chair Darren Woods and the company's lead independent director Joseph Hooley, saying in a statement Exxon's suit would "undermine shareholder rights."

The group named BlackRock, JPMorgan and Goldman Sachs among the managers whose support it sought. A JPMorgan representative said the firm would not comment on individual votes. A Goldman Sachs representative declined to comment. BlackRock did not immediately comment.

Exxon's May 29 annual meeting is shaping up as a test of how much support small investors can expect from top asset managers. While Wall Street firms have touted their investments in corporate stewardship to guide votes on executive pay or shareholder resolutions, the firms almost never submit resolutions themselves.

Big asset managers also have taken increasing criticism from both liberal and conservative groups over the proxy votes they cast.

Other state financial leaders, including New York State Comptroller Thomas DiNapoli, have previously said they would vote public pension assets against Exxon directors because of the lawsuit. While the state systems are not among the largest Exxon shareholders, they have played an influential role in previous company director elections.

Exxon, which is frequently the focus of critical shareholder resolutions, had sued to block a vote on a climate proposal, sidestepping the usual regulatory process. Although the investors withdrew their resolution, Exxon continued the lawsuit, seeking legal costs and other relief.

The unusual lawsuit has prompted concerns from investor groups and proxy advisers, though it is not clear if top shareholders will join earlier calls from religiously-affiliated investors to vote against Woods and Hooley.

Tuesday's statement was sent by a representative for California Treasurer Fiona Ma, a board member of the California Public Employees' Retirement System. On Monday the system declared its intention to vote against all Exxon's board nominees over the lawsuit.

Asked about the statement, an Exxon representative reiterated the company's position that it only wants "to get clarity on the rules to foster an environment for open and meaningful shareholder dialogue."

The representative said the board has overseen significant value creation.

(Reporting by Ross Kerber; editing by Rod Nickel and David Gregorio)