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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

ExxonMobil easily rebuffed an attempted shareholder revolt against its board of directors sparked by the supermajor’s decision to sue two climate-focused investors.

Investors in the biggest US oil company voted overwhelmingly on Wednesday to re-elect all 12 members of the company’s board despite a campaign against two directors — chief executive Darren Woods and lead independent director Jay Hooley — in protest over its lawsuit against activists.

Shareholders voted 95 per cent in favour of the company’s slate of directors, down marginally from 96 per cent last year. The lowest support for an individual director was 87 per cent, versus 91 per cent last year, according to a preliminary tally of votes at the company’s annual meeting.

“Today our investors sent a powerful message that rules and value-creation matter,” Exxon said in a statement following the results. “We expect the activist crowd will try and claim victory on today’s vote, but common sense should tell you otherwise in light of the large margin of the loss.”

Wall Street had been closely monitoring the outcome of the meeting after a number of large shareholders pledged to lodge protest votes. The backlash followed Exxon’s decision to sue US investment adviser Arjuna Capital and Dutch shareholder group Follow This, after they introduced a resolution demanding the company do more to cut greenhouse gas emissions.

The groups have since withdrawn their resolution but Exxon has persisted with its lawsuit. A judge last week threw out the case against Follow This on jurisdiction grounds but allowed the case against Arjuna to proceed.

The lawsuit has sparked fears in the financial community of a broader attack on shareholder rights in the US, with critics warning it will have a chilling effect on the willingness of small investors to file motions.

Calpers, the biggest US public pension plan, voted against the re-election of all Exxon directors in protest over what it called a “reckless” legal action to “silence” shareholder voices. Norway’s $1.5tn sovereign wealth fund said it would vote against the re-election of Hooley.

Exxon’s lawsuit stems in part from a change at the Securities and Exchange Commission to allow more environmental, social and governance motions to proceed to shareholder votes. The agency has become less inclined to use its powers to halt shareholder proposals that companies argue are frivolous or micromanage their day-to-day affairs. Exxon argues that the SEC has allowed too many burdensome proposals on to the ballot, leaving it with no option but to turn to the courts.

Three passengers are suing American Airlines after alleging employees from the company removed a total of eight Black men from a flight due to a complaint about a passenger with body odor. 

The lawsuit, filed Wednesday in U.S. District Court for the Eastern District of New York, claims that as American Airlines Flight 832 from Phoenix to New York was boarding in January, American Airlines employees removed eight Black men from the plane allegedly over a complaint about “offensive body odor.”

Video central to the lawsuit displayed a group of Black men who were not traveling together and did not know each other being removed from the flight. According to the suit, they were the only Black passengers on the flight.

Emmanuel Jean Joseph, Alvin Jackson and Xavier Veal — the three plaintiffs— were on a connecting flight from Los Angeles. The three allege that at no point throughout the other flight did any employee from American Airlines say anything to them about an offensive odor.

Jean Joseph told CBS News senior transportation correspondent Kris Van Cleave that as he gathered his belongings and walked to the jet bridge, he noticed that only Black men were being removed from the flight. 

“I started freaking out,” Xavier Veal said. He decided to record the incident on his phone.

The lawsuit claims that the men were held in the jetway for about an hour and then moved to the gate area where they were told they would be rebooked on another flight to New York later that day. The lawsuit alleges that an American Airlines employee indicated that the complaint about body odor came from a “white male flight attendant.”

A gate agent seen in the video at one point seemed to agree that race was a factor in the decision to remove the men from the flight.

When another flight to New York could not be found, the men were put back on the same plane. Jackson described the experience as uncomfortable, saying, “Everybody staring at me, me and all the other Black people on the plane were just taken off.” 

“I knew that as soon as I got on that plane, a sea of White faces were going to be looking at me and blaming me for their late flight of an hour,” said Jean Joseph.

The lawyer representing the three men, Sue Huhta, said that American Airlines declined to provide her clients any answers about the incident and said it seems “fairly apparent that race was part of this dynamic.” 

“It’s almost inconceivable to come up with an explanation for that other than the color of their skin, particularly since they didn’t know each other and weren’t sitting near each other,” said Huhta.

The lawsuit also cites other recent incidents where passengers have alleged discrimination by American Airlines and references a 2017 NAACP travel advisory urging members not to fly on the airline, which was lifted eight months later.

CBS Legal Analyst Rikki Klieman said the lawsuit suggests that the plaintiffs might be more interested in making a public statement about racial discrimination than in financial compensation. Klieman believes the question at trial is about American Airlines’ protocols and how it handled the employees after the incident.

But Veal said it is his belief that if it had been a White person, the situation probably wouldn’t have happened. 

“We were discriminated against. The entire situation was racist,” he said.

In a statement to CBS News, American Airlines said, “We take all claims of discrimination very seriously and want our customers to have a positive experience when they choose to fly with us. Our teams are currently investigating the matter, as the claims do not reflect our core values or our purpose of caring for people.”

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Czech billionaire Daniel Křetínský has reached an agreement to buy the owner of Royal Mail in a deal valuing the group at £5.2bn, as he pledged to revive the fortunes of the former UK postal monopoly away from the glare of public markets.

Křetínský’s EP Group said on Wednesday it had agreed a takeover price of 370 pence per share for London-listed International Distribution Services, which owns Royal Mail and the international parcel business GLS, setting the path for intense political scrutiny of the proposal during a UK election year.

EP Group and IDS have spent the past few weeks hammering out the details of a deal for the former state-owned postal group, which since privatisation has been beset by strikes and growing competition from the likes of Amazon.

The move to place the 508-year-old postal service under foreign ownership comes with various commitments, including keeping its UK headquarters, recognising the postal workers’ union and maintaining Royal Mail’s obligation to deliver mail everywhere in the UK at the same cost. But these commitments have been made for just five years, with the Labour party and the union already vowing to protect the future of the group.

Jonathan Reynolds, shadow business secretary, said the Labour party, which is expected to win the general election on July 4, would “take the necessary steps to safeguard [Royal Mail’s] undeniable identity and place in public life”, adding that “Labour in government will ensure [EP Group’s commitments] are adhered to”.

Dave Ward, general secretary of the Communication Workers Union, said: “We do welcome some of the commitments that have been made but the reality is postal workers across the UK have lost all faith in the senior management of Royal Mail and the service has been deliberately run down.”

He said the CWU would be “engaging with the Labour party and other stakeholders to call for a new model of ownership for Royal Mail where our members and customers have a direct say in key decisions”, adding that “this situation is a direct result of a failed and ideological privatisation over a decade ago”.

Jeremy Hunt, chancellor, previously said a bid for Royal Mail would be subject to “normal” scrutiny on national security grounds, but added that international investment in British companies was generally welcomed.

Křetínský, a lawyer-turned-energy tycoon, is already the largest shareholder in IDS with a 27.5 per cent stake. His IDS takeover bid marks his latest UK dealmaking spree, after he acquired stakes in supermarket chain J Sainsbury and English Premier League football club West Ham United.

Křetínský said that “IDS’s market is evolving quickly, and it must accelerate its transformation and investments into modernisation to keep up with the competition”.

EP Group’s offer follows years of losses and failures to hit performance targets at Royal Mail, which have seen IDS’s shares drop from more than 550p in 2018 to just 213p before the company’s first bid was announced in April.

While being required to meet Royal Mail’s historic obligation to deliver everywhere in the UK at the same cost, EP Group would face the challenge of declining demand for letters and growing competition for parcel deliveries.

Previous attempts by IDS to overhaul the business in response to that competition have been strongly opposed by postal workers, who walked out for 18 days in 2022 over plans to bring working practices closer in line with more modern rivals.

Shares in IDS rose 3 per cent on Wednesday morning to 330 pence, significantly below the offer price, suggesting doubts over whether the deal will pass.

One top IDS shareholder said he was “disappointed” by the offer price, but warned that “if the deal doesn’t go through, you are stuck with a management team that didn’t want the company to remain public and no longer seem to believe there is much value”.

Analysts have previously suggested that a takeover of IDS could lead to a break-up of Royal Mail and the more profitable GLS, a move strongly opposed by the postal workers’ union. EP Group’s recommended offer, which includes restrictions on breaking up GLS from the broader IDS group for five years, comes just days after IDS said GLS had helped the group return to profit in the 12 months to March.

“The IDS board believes that the offer from EP is fair and reasonable given that there are uncertainties ahead and allows investors to realise value at a significant premium,” said IDS chair Keith Williams.