(FROM THE WALL STREET JOURNAL 4/1/15) 
   By Daniel Gilbert 

Chevron Corp. shareholders will have the chance to vote later this year on a proposal calling for an increase in dividends in light of uncertain profits from energy projects.

Chevron has objected to the proposal, submitted by social-responsibility groups, which is the first advisory proposal of its kind to face a shareholder vote at a major U.S. oil company. It also could be the last.

The proposal argues that the company should boost payouts to investors because high-cost energy projects are becoming riskier, in part due to climate regulations.

While Chevron didn't persuade regulators to exclude the proposal, Exxon Mobil Corp. had better luck deflecting a similar measure.

The Securities and Exchange Commission recently ruled that Exxon could leave the proposal -- from some of the same social-responsibility groups -- off its ballot. The SEC declined to reconsider or to present an appeal to the full commission, according to correspondence reviewed by The Wall Street Journal.

The regulator's decision in Exxon's case could be used as a precedent for other companies that want to block similar proposals. "It will restrict shareholders' rights to request capital distributions much more broadly," said Natasha Lamb, director of equity research and shareholder engagement at Arjuna Capital, one of the groups involved in submitting both the Chevron and Exxon proposals.

Arjuna and peer groups represent investors and urge companies to adopt policies that mitigate environmental and climate-related risks.

Exxon declined to comment.

The company made several arguments for excluding the proposal from a vote by shareholders: It was too vague; it contained two proposals instead of one; it sought changes to Exxon's business operations (rather than its investor payout policy); and the company had already addressed the proposal's underlying goal.

Exxon has dialed down its efforts to buy back company shares in recent years as it ramped up investment in massive energy projects and as the price of oil tumbled. It plans to spend $1 billion in the first quarter repurchasing stock, down from $7 billion in the first quarter of 2009.

"The company's long-standing capital allocation strategy -- to invest only in capital projects that offer attractive returns to shareholders, to maintain a sustainable and growing cash dividend, and to distribute surplus liquidity to shareholders through share repurchases -- substantially implements the proposal," Exxon wrote to the SEC.

The SEC concluded that Exxon's practices "compare favorably with the guidelines of the proposal," an SEC staff member wrote.

As for Chevron, the company's main argument -- that the proposal was vague and misleading -- was rejected by the SEC.

"The proposed policy is unnecessary and based on the flawed premise that stockholders would be best served if Chevron stopped investing in its business," a Chevron spokesman said, adding that the company takes climate risks seriously. The company "has a history of dialogue with the proponents of the proposal and looks forward to continued discussion in the future."

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