Company Name: Exxon Mobil Corp.
Public Availability Date: March 1, 2004
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
January 19, 2004
VIA Network Courier
U. S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
450 Fifth Street, N.W.
Washington, DC 20549
RE: Securities Exchange Act of 1934Section 14(a); Rule 14a-8 Omission of
Shareholder Proposal Regarding Equity Compensation Report
Gentlemen and Ladies:
Enclosed as Exhibit 1 are copies of correspondence between Ms. Jennifer Ladd and
Exxon Mobil Corporation regarding a shareholder proposal for ExxonMobil's
upcoming annual meeting. Exhibit 1 also includes copies of correspondence
between "co-sponsors" of the proposal and ExxonMobil. We intend to omit the
proposal from our proxy material for the meeting for the reasons explained
below. To the extent this letter raises legal issues, it is my opinion as
counsel for ExxonMobil.
The proposal requests a report documenting the distribution of 2003 equity
compensation by race and gender of the recipient. The report is also to discuss
recent trends in equity compensation distribution to women and employees of
color.1
Proposal relates to ordinary business.
The proposal is not limited to ExxonMobil's senior executives, but requests
information on all recipients of equity compensation. ExxonMobil currently has
only 17 executive officers. We did not grant stock options in 2003 but did grant
restricted stock or restricted stock units to over 5,000 employees. This number
necessarily includes large numbers of mid-level managerial, professional, and
technical employees. Thus, the proposal may be omitted under Rule 14a-8(i)(7) as
relating to general employment matters. See Comshare, Incorporated (available
September 5, 2001), in which the staff concurred that a proposal requesting
additional disclosure of the company's "strategy for awarding stock options to
top executives and directors" related to ordinary business operations. Like the
current proposal, the proposal in Comshare was not limited to the company's
executive officers. See also Sempra Energy (available January 30, 2001)
(proposal to place limitations on issuance of stock options and other equity
awards related to ordinary business operations (i.e., general compensation
matters)).
Proposal is vague and indefinite.
The proposal and supporting statement reflect a U.S.-centered perspective which
cannot be intelligibly applied in the context of ExxonMobil's multi-national
operations. As noted above, in 2003 we made equity awards to over 5,000
employees. These employees are located in over 80 countries, representing every
continent except Antarctica. While grouping employees by race in accordance with
EEO-1 definitions might be possible for U.S.-based employees, nearly half of the
recipients of ExxonMobil incentive awards in 2003 were not in the U.S. It is
unclear how U.S. EEO categoriesmuch less undefined terms such as "employees of
color" and "glass ceiling" should be applied in countries like Angola,
Azerbaijan, Argentina, Brazil, Equatorial Guinea, India, Indonesia, Japan,
Malaysia, Nigeria, Qatar, Thailand, Venezuela, Zimbabwe, or in dozens of other
countries where U.S. concepts of national ancestry or skin tone are not
relevant. To illustrate the difficulty: should the report characterize every
African in Africa, every South American in South America, and every Asian in
Asia as a "person of color?" Or should the report define different categories of
award recipients (based on religion, tribal affiliation, or caste for example)
depending on the factors most relevant in a particular location in terms of
majority/minority relations and equal opportunity issues? The proposal gives no
guidance on these points, and without such guidance it is impossible to know
what information the requested report should contain.
In short, the proposal is so vague and indefinite that shareholders would not
understand what they are being asked to consider and the company would be unable
to determine what action should be taken. Therefore, the proposal conflicts with
Rule 14a-9 and may be omitted from our proxy material under Rule 14a-8(i)(3).
See Johnson & Johnson (available February 7, 2003). The shareholder proposal
requested a report regarding the company's progress concerning "the Glass
Ceiling Commission's business recommendations," including an explanation of how
executive compensation packages and performance evaluations include efforts to
break the glass ceiling and disclosure of the company's top one hundred or one
percent of company wage earners broken down by gender and race. The staff
concurred that the proposal could be omitted under Rule 14a-8(i)(3) on the basis
that the proposal was vague and indefinite. See also Schering-Plough Corporation
(available February 27, 2002) (proposal calling on company to endorse the "Pro
Vita Principles" excludable under rule 14a-8(i)(3) where proposal fails
adequately to explain the actions that would be required by the company).
Proposal goes beyond company's legal power to implement.
In many countries, including member countries of the European Union2 and a
number of countries in South America, local data privacy laws prohibit the
transfer of personal information about employeesincluding racial
informationinto the United States without the employee's consent or approval of
special data protection arrangements by the local government.3 Thus,
ExxonMobil's ability to prepare the report requested by the proposal would
depend upon the extent to which individual employees and/or foreign governments
permit transfer of the relevant data into the United States. It is therefore
beyond ExxonMobil's lawful power to assure that the report could be accurately
prepared and accordingly we believe the proposal may be omitted under Rules
14a-8(i)(2) and (6).
For the staff's information, a total of 18 shareholder proposals were submitted
to ExxonMobil this year. Depending on the outcome of ongoing dialogue with
various proponents, we expect to submit between eight and 10 no-action letter
requests. We will only submit letters where we believe good grounds for omission
of the proposal in its entirety exist. Accordingly, we have elected not to
submit letters this year taking issue with particular false or misleading
statements in the supporting statements for shareholder proposals. We will
instead address those issues to the extent necessary in our proxy statement
responses.
If you have any questions or require additional information, please contact me
directly at 972-444-1478. In my absence, please contact Lisa K. Bork at
972-444-1473.
Please file-stamp the enclosed copy of this letter and return it to me in the
enclosed self-addressed postage-paid envelope. In accordance with SEC rules, I
also enclose five additional copies of this letter and the enclosures. A copy of
this letter and the enclosures is being sent to the proponent, the proponent's
representative, and each co-sponsor.
Sincerely,
/s/
James Earl Parsons
JEP/dl
Enclosures
c: w/enc
Ms. Jennifer Ladd
245 Main Street, Suite 207
Northampton, MA 01060
Mr. Scott Klinger
United for a Fair Economy
37 Temple Place
Boston, MA 02111
Mr. Michael C. Bleiwess
45 Washington Street, Unit 45
Methuen, MA 01844
Ms. Gwendolyn Cleo Whitehead Brewer
3304 West Sierra Drive
Westlake Village, CA 91362
Ms. Melissa Kohner
225 Race Street
Philadelphia, PA 19106
Ms. Carol Master
199 Coolidge Avenue, #107
Watertown, MA 02472
Mr. Robert B. Stanfield
29 Ledge Lane
Pipersville, PA 18947
-----FOOTNOTES-----
1 The title of the proposal also uses the term "glass ceiling," but the term is
not used in the proposal itself or supporting statement.
2 Directive 95/46/EC article 26 of the European Parliament as implemented in
member countries by legislation (such as the Data Protection Act 1998 in the
U.K.)
3 In France, for example, employee consent alone is not sufficient to waive data
privacy protections.
[INQUIRY LETTER]
February 6, 2004
VIA Network Courier
U. S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
450 Fifth Street, N.W.
Washington, DC 20549
RE: Securities Exchange Act of 1934Section 14(a); Rule 14a-8 Omission of
Shareholder Proposal Regarding Equity Compensation Report
Gentlemen and Ladies:
This letter responds to the letter dated February 2, 2004, from Mr. Scott
Klinger on behalf of the proponents for the shareholder proposal referenced
above. The proposal is the subject of a no-action letter request submitted by
ExxonMobil dated January 19, 2004. To the extent this letter raises legal
issues, it is my opinion as counsel for ExxonMobil.
We reiterate our belief that the proposal may be omitted under Rule 14a-8(i)(7)
for the reasons explained in our original January 19 letter. We also wish to
respond to the proponents' offer to amend their proposal. We do not believe the
proponents should be allowed to cure substantive defects under Rules 14a-8(i)(3)
and (6) by substituting what is in effect a new proposal for their original
proposal.
Specifically, the amendment would change the proposal from a request for a
report on ExxonMobil's global equity compensation policies to a request for a
report dealing solely with equity compensation in the United States. As noted in
our original letter, employment and equal opportunity issues differ greatly from
country to country. It is for that reason in part that we believe the original
proposal is impermissibly vague and indefinite. To shift the proposal from
global employment policies to U.S.-only employment policies represents a
substantial change. The amended proposal should therefore be considered a new
proposal which may be omitted from our proxy material under Rule 14a-8(e) (since
the new proposal is being submitted well after the December 18, 2003, deadline
for shareholder proposals for our 2004 annual meeting) and Rule 14a-8(c) (since
the proponent has already submitted one proposal for the same annual meeting).
Lastly, we wish to note for the record that we have called and emailed Mr.
Klinger a number of times over the past month to arrange a conference call to
discuss the proponents' concerns. To date, he has either not returned our calls
or been unavailable.
If you have any questions or require additional information, please contact me
directly at 972-444-1478. In my absence, please contact Lisa K. Bork at
972-444-1473.
Please file-stamp the enclosed copy of this letter and return it to me in the
enclosed self-addressed postage-paid envelope. In accordance with SEC rules, I
also enclose five additional copies of this letter. A copy of this letter is
being sent to the proponent, the proponent's representative, and each
co-sponsor.
Sincerely,
/s/
James Earl Parsons
JEP/dll
Enclosures
cc: Distribution List
[APPENDIX]
Distribution List for 2004 ExxonMobil Shareholder Proposal Regarding Equity
Compensation Report
Proponent:
Jennifer Ladd
245 Main Street, Suite 207
Northampton, MA 01060
Proponent Representative:
Scott Klinger
United for a Fair Economy/Responsible Wealth
37 Temple Place
Boston, MA 02111
Co-sponsors:
Mr. Michael C. Bleiwess
45 Washington Street, Unit 45
Methuen, MA 01844
Ms. Gwendolyn Cleo Whitehead Brewer
3304 West Sierra Drive
Westlake Village, CA 91362
Ms. Melissa Kohner
225 Race Street
Philadelphia, PA 19106
Ms. Carol Master
199 Coolidge Avenue, #107
Watertown, MA 02472
Mr. Robert B. Stanfield
29 Ledge Lane
Pipersville, PA 18947
[INQUIRY LETTER]
February 2, 2004
Office of the Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Exxon Mobil Corporation "no-action" request dated January 19, 2004
concerning shareholder proposal seeking report on stock option distribution by
the race and gender of option recipients.
Ladies and Gentlemen:
In its letter of January 19, 2004, Exxon Mobil Corporation (the "Company")
indicated its intention to omit a shareholder resolution submitted by Jennifer
Ladd and five other shareholders (collectively, the "Proponents"). This letter
is submitted on behalf of the collective Proponents.
The Proposal asks the Company to prepare a report outlining the distribution of
stock options by the race and gender of the option recipients. In addition the
Proposal asks the Company to comment on recent trends in the distribution of
options by race and gender.
The Company believes the Proposal violates Rule 14a-8(i)(7) (the "ordinary
business" exclusion). In its letter, the Company argues that the Proposal
concerns general compensation matters, and cites precedents supporting why such
matters are excludable. The Company also raises concerns about how to implement
such a proposal given the international focus of its operations.
Does the Proposal deal primarily with matters of general compensation?
The Proponents believe that the Proposal is a matter of social policy,
specifically social policy dealing with the issue of corporate diversity. The
Commission has broadly established precedents allowing shareholders to vote on
such things as the public disclosure of EEO-1 data. This Proposal is an
extension of such disclosures.
The Proponents acknowledge that the Proposal does deal with matters of general
employee compensation, but only in order to serve the higher purpose of insuring
that sound social policy is carried out. The Proposal takes a step beyond the
already permitted EEO-1 shareholder proposals, to ascertain whether the job
advancements for women and minorities revealed In accordance with Rule 14-8(j)
please find six copies of this letter enclosed. A copy of this letter has been
simultaneously sent to James Earl Parsons, Counsel of the Company.
Thank you for your consideration.
Sincerely,
/s/
Scott Klinger
Co-Director, Responsible Wealth
On behalf of the Proponents
Cc: James Earl Parsons, Exxon Mobil Corporation
Jennifer Ladd
Michael Bleiweiss
Gwendolyn Brewer
Melissa Kohner
Carol Master
Robert B. Stanfield
[STAFF REPLY LETTER]
March 1, 2004
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Exxon Mobil Corporation
Incoming letter dated January 19, 2004
The original proposal requests that the board prepare a report that documents
the distribution of 2003 stock options by the recipient's race and gender and
discusses recent trends in stock options granted to women and employees of
color. The revised proposal requests that the board prepare a report that
documents the distribution of 2003 stock options by the recipient's race and
gender of U.S.-based employees and discusses recent trends in stock options
granted to U.S.-based female and employees of color.
We are unable to conclude that ExxonMobil has met its burden of establishing
that the original proposal would violate applicable foreign law. Accordingly, we
do not believe that ExxonMobil may omit the original proposal from its proxy
materials in reliance on rules 14a-8(i)(2) and 14a-8(i)(6).
We are unable to concur in your view that ExxonMobil may exclude the original
proposal under rule 14a-8(i)(3). Accordingly, we do not believe that ExxonMobil
may omit the original proposal from its proxy materials in reliance on rule
14a-8(i)(3).
We are unable to concur in your view that ExxonMobil may exclude the original
proposal under rule 14a-8(i)(7). Accordingly, we do not believe that ExxonMobil
may omit the original proposal from its proxy materials in reliance upon rule
14a-8(i)(7).
There appears to be some basis for your view that ExxonMobil may exclude the
revised proposal under rule 14a-8(e)(2) because ExxonMobil received it after the
deadline for submitting proposals. Accordingly, we will not recommend
enforcement action to the Commission if ExxonMobil omits the revised proposal
from its proxy materials in reliance on rule 14a-8(e)(2).
Sincerely,
/s/
John J. Mahon
Attorney-Advisor
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