Business
Column: In a major rebuke to Exxon Mobil, CalPERS will vote against its entire board
Exxon Mobil can’t say it wasn’t warned.
Having opted to continue its lawsuit against two activist investor groups even after they withdrew a shareholder proposal the company management opposed, the giant oil company had gotten flayed by shareholder advocates for its bullying.
Now the big shoe has dropped: CalPERS, the largest public pension fund in the nation, announced Monday that it will vote against all 12 Exxon Mobil board members, including CEO Darren Woods, at the May 29 annual meeting.
‘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 CEO Marcie Frost
CalPERS says it’s acting because it judges the company’s campaign against the two investor groups to be “designed to punish” investors who “dared to speak truth to power.”
The pension fund says, “the repercussions of the lawsuit could be devastating….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?”
The announcement is a major step up from the pension fund’s earlier comments about its intentions. Michael Cohen, the CalPERS chief operating investment officer, had earlier said only that the fund was considering voting against Woods.
Voting against the entire board and publicly urging other investors “to do the same,” appreciably raises the stakes for Exxon, at least theoretically. CalPERS — the California Public Employees’ Retirement System — is an institutional investor to be reckoned with. The $496-billion fund owns about $1 billion in Exxon Mobil shares.
Exxon Mobil’s lawsuit “is a real problem for us as share owners,” CalPERS CEO Marcie Frost said during a press conference Monday. “We believe that our voice matters, that we should be able to provide proxy solicitations asking the company to be more transparent in certain areas.”
Exxon called CalPERS’ action “a poor fiduciary decision.” The company said through a spokesperson, “It’s unclear why CalPERS is spending their time and energy defending the abuse of a shareholder process…Far from having a chilling effect on shareholder proposals, our efforts are intended to get clarity on the rules to foster an environment for open and meaningful shareholder dialogue. If anything, CalPERS’ vote against our entire board appears to be an attempt to ‘chill’ shareholder voices.”
As I reported last week, in February Exxon Mobil sued the U.S. investment firm Arjuna Capital and Netherlands-based green shareholder firm Follow This to keep a shareholder resolution they sponsored from appearing on the agenda of its annual meeting. The resolution was a plain-vanilla environmental proposal urging the company to work harder to reduce the greenhouse gas emissions of its products and to be more transparent about the impact of its business on the climate.
Days after the company sued, the shareholders, calculating their relative strength against the oil behemoth, withdrew the proposal and pledged not to refile it in the future. That rendered the lawsuit moot — but the company has refused to drop it.
What makes the lawsuit seem especially cynical is that the investors’ proposal, like all such proposals, are not binding on management — they’re advisory only. Moreover, as Frost pointed out, similar proposals in 2022 and 2023 failed to garner majority support from shareholders, winning only 10.5% of votes in 2022 and 27% last year.
“Exxon won,” Frost said.
It’s unlikely that CalPERS’ action will result in the board’s ouster. As CalPERS CEO Marcie Frost noted during a press conference Monday, no alternative slate of directors has been named for the upcoming annual meeting, so it would be “very difficult to say we’re turning over this board.”
But she said the fund’s vote is “more than symbolic” — it’s more about “sending the appropriate messages to this about their responsibilities in governance; if they don’t want to deal with governance they should step aside.”
Although CalPERS supported a slate of activist board members nominated in 2021— three of the four nominees won board seats — the fund said it is voting against the entire board because it is “allowing Chief Executive Officer Darren Woods to pursue a reckless and destructive effort.”
Frost said CalPERS isn’t contemplating taking a more aggressive action against Exxon Mobil, such as divesting its shares. “The problem with divestment when you’re CalPERS is that you completely lose your voice. The moment you don’t own shares, you can’t sign on to other owners’ proposals, you can’t take action to say we don’t believe that executive compensation is commensurate with the performance of the company.”
Exxon Mobil asserts in its lawsuit that the investment funds’ proposed resolution breached standards set forth by the Securities and Exchange Commission governing the propriety of such resolutions — it was related to “the company’s ordinary business operations” and closely resembled resolutions on similar topics that had failed to exceed threshold votes at the 2022 and 2023 annual meetings. Both standards allow a company to block a resolution from the meeting agenda, or proxy.
That may be so, but the conventional practice is for managements to seek approval from the SEC to exclude such resolutions by requesting what’s known as an agency “no action” letter.
CalPERS says that would have been “the better option” than a lawsuit. It’s not as though the SEC had set a high bar to issuing “no action” letters — the pension fund observes that the agency has approved two-thirds of those requests so far this year. Frost conjectured that, given the poor showing of similar proposals in the recent past, the SEC probably would have allowed the company to exclude the latest proposal from the annual meeting proxy.
Exxon Mobil’s rationale for continuing the lawsuit is that the proposal rules “must be enforced or the abuse by activists masquerading as shareholders will continue threatening the system.”
Frost questioned the company’s position. She described Exxon Mobil’s goal in the lawsuit as obtaining “clarity around the ordinary business” standard. But “to me it doesn’t feel like ‘clarity’; it feels like diminishment” of shareholder voices. As for the company’s insinuation that the system is broken, she said, “the system is working, if you use the system.”
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Politicians in Washington and the reporters who cover them have an often adversarial relationship.
But on the last Saturday in April, they gather for an irreverent celebration of press freedom and the First Amendment at the Washington Hilton Hotel: The White House Correspondents’ Association dinner.
Hosted by the association, an organization that helps ensure access for media outlets covering the presidency, the dinner attracts Hollywood stars; politicians from both parties; and representatives of more than 100 networks, newspapers, magazines and wire services.
While The Times will have two reporters in the ballroom covering the event, the company no longer buys seats at the party, said Richard W. Stevenson, the Washington bureau chief. The decision goes back almost two decades; the last dinner The Times attended as an organization was in 2007.
“We made a judgment back then that the event had become too celebrity-focused and was undercutting our need to demonstrate to readers that we always seek to maintain a proper distance from the people we cover, many of whom attend as guests,” he said.
It’s a decision, he added, that “we have stuck by through both Republican and Democratic administrations, although we support the work of the White House Correspondents’ Association.”
Susan Wessling, The Times’s Standards editor, said the policy is a product of the organization’s desire to maintain editorial independence.
“We don’t want to leave readers with any questions about our independence and credibility by seeming to be overly friendly with people whose words and actions we need to report on,” she said.
The celebrity mentalist Oz Pearlman is headlining the evening, in lieu of the usual comedy set by the likes of Stephen Colbert and Hasan Minhaj, but all eyes will be on President Trump, who will make his first appearance at the dinner as president.
Mr. Trump has boycotted the event since 2011, when he was the butt of punchlines delivered by President Barack Obama and the talk show host Seth Meyers mocking his hair, his reality TV show and his preoccupation with the “birther” movement.
Last month, though, Mr. Trump, who has a contentious relationship with the media, announced his intention to attend this year’s dinner, where he will speak to a room full of the same reporters he often derides as “enemies of the people.”
Times reporters will be there to document the highs, the lows and the reactions in the room. A reporter for the Styles desk has also been assigned to cover the robust roster of after-parties around Washington.
Some off-duty reporters from The Times will also be present at this late-night circuit, though everyone remains cognizant of their roles, said Patrick Healy, The Times’s assistant managing editor for Standards and Trust.
“If they’re reporting, there’s a notebook or recorder out as usual,” he said. “If they’re not, they’re pros who know they’re always identifiable as Times journalists.”
For most of The Times’s reporters and editors, though, the evening will be experienced from home.
“The rest of us will be able to follow the coverage,” Mr. Stevenson said, “without having to don our tuxes or gowns.”
A former female staffer who worked for Beast Industries, the media venture behind the popular YouTube channel MrBeast, is suing the company, alleging she was sexually harassed and fired shortly after she returned from maternity leave.
The employee, Lorrayne Mavromatis, a Brazilian-born social media professional, alleges in a lawsuit she was subjected to sexual harassment by the company’s management and demoted after she complained about her treatment. She said she was urged to join a conference call while in labor and expected to work during her maternity leave in violation of the Family and Medical Leave Act, according to the federal complaint filed Wednesday in the U.S. District Court for the Eastern District of North Carolina.
“This clout-chasing complaint is built on deliberate misrepresentations and categorically false statements, and we have the receipts to prove it. There is extensive evidence — including Slack and WhatsApp messages, company documents, and witness testimony — that unequivocally refutes her claims. We will not submit to opportunistic lawyers looking to manufacture a payday from us,” Gaude Paez, a Beast Industries spokesperson, said in a statement.
Jimmy Donaldson, 27, began MrBeast as a teen gaming channel that soon exploded into a media company worth an estimated $5 billion, with 500 employees and 450 million subscribers who watch its games, stunts and giveaways.
Mavromatis, who was hired in 2022 as its head of Instagram, described a pervasive climate of discrimination and harassment, according to the lawsuit.
In her complaint, she alleges the company’s former CEO James Warren made her meet him at his home for one-on-one meetings while he commented on her looks and dismissed her complaints about a male client’s unwanted advances, telling her “she should be honored that the client was hitting on her.”
When Mavromatis asked Warren why MrBeast, Donaldson, would not work with her, she was told that “she is a beautiful woman and her appearance had a certain sexual effect on Jimmy,” and, “Let’s just say that when you’re around and he goes to the restroom, he’s not actually using the restroom.”
Paez refuted the claim.
“That’s ridiculous. This is an allegation fabricated for the sole purpose of sparking headlines,” Paez said.
Mavromatis said she endured a slate of other indignities such as being told by Donaldson that she “would only participate in her video shoot if she brought him a beer.”
“In this male-centric workplace, Plaintiff, one of the few women in a high-level role, was excluded from otherwise all-male meetings, demeaned in front of colleagues, harassed, and suffered from males be given preferential treatment in employment decisions,” states the complaint.
When Mavromatis raised a question during a staff meeting with her team, she said a male colleague told her to “shut up” or “stop talking.”
At MrBeast headquarters in Greenville, N.C., she said male executives mocked female contestants participating in BeastGames, “who complained they did not have access to feminine hygiene products and clean underwear while participating in the show.”
In November 2023, Mavromatis formally complained about “the sexually inappropriate encounters and harassment, and demeaning and hostile work environment she and other female employees had been living and experiencing working at MrBeast,” to the company’s then head of human resources, Sue Parisher, who is also Donaldson’s mother, according to the suit.
In her complaint, Mavromatis said Beast Industries did not have a method or process for employees to report such issues either anonymously or to a third party, rather employees were expected to follow the company’s handbook, “How to Succeed In MrBeast Production.”
In it, employees were instructed that, “It’s okay for the boys to be childish,” “if talent wants to draw a dick on the white board in the video or do something stupid, let them” and “No does not mean no,” according to the complaint.
Mavromatis alleges that she was demoted and then fired.
Paez said that Mavromatis’s role was eliminated as part of a reorganization of an underperforming group within Beast Industries and that she was made aware of this.
Lululemon, the yoga pants and athletic clothing company, has hired a former executive from a rival, Nike, as its new chief executive.
Heidi O’Neill, who spent more than 25 years at Nike, will take the reins and join Lululemon’s board of directors on Sept. 8, the company announced on Wednesday.
The leadership change is happening during a tumultuous time for Lululemon, which had grown to $11 billion in revenue by persuading shoppers to ditch their jeans and slacks for stretchy leggings. But lately, sales have declined in North America amid intense competition and shifting fashion trends, with consumers favoring looser styles rather than the form-fitting silhouettes for which Lululemon is best known.
“As I step into the C.E.O. role in September, my job will be to build on that foundation — to accelerate product breakthroughs, deepen the brand’s cultural relevance, and unlock growth in markets around the world,” Ms. O’Neill, 61, said in a statement.
Lululemon, based in Vancouver, British Columbia, has also been entangled in a corporate power struggle over the company’s future. Its billionaire founder, Chip Wilson, has feuded with the board, nominated independent directors and criticized executives.
Lululemon’s previous chief executive, Calvin McDonald, stepped down at the end of January as pressure mounted from Mr. Wilson and some investors. One activist investor, Elliott Investment Management, had pushed its own chief executive candidate, who was not selected.
The interim co-chiefs, Meghan Frank and André Maestrini, will lead the company until Ms. O’Neill’s arrival, when they are expected to return to other senior roles. The pair had outlined a plan to revive sales at Lululemon, promising to invest in stores, save more money and speed up product development.
“We start the year with a real plan, with real strategies,” Mr. Maestrini said in an interview this year. “We make sure decisions are made fast.”
Lululemon said last month that it would add Chip Bergh, the former chief executive of Levi Strauss, to its board to replace David Mussafer, the chairman of the private equity firm Advent International, whom Mr. Wilson had sought to remove.
Ms. O’Neill climbed the organizational chart at Nike for decades, working across divisions including consumer sports, product innovation and brand marketing, and was most recently its president of consumer, product and brand. She left Nike last year amid a shake-up of senior management that led to the elimination of her role.
Analysts said Ms. O’Neill would be expected to find ways to energize Lululemon’s business and reset the company’s culture in order to improve performance.
“O’Neill is her own person who will come with an agenda of change,” said Neil Saunders, the managing director of GlobalData, a data analytics and consulting company. “The task ahead is a significant one, but it can be undertaken from a position of relative stability.”
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