Glass Lewis
May
13, 2020
Page 2
senior positions, including domestic
and international responsibilities. In addition, having a combined Chairman/CEO role helps ensure that the items of greatest importance for the business are brought to our Boards attention, and as new issues evolve within the business, our
combined Chairman/CEO is positioned well to raise those issues with the Board. Finally, this structure is also in-line with peers, as only approximately 34% of S&P 500 companies have a chairman that meets
the New York Stock Exchange rules for independence, according to the 2019 Spencer Stuart Board Index.
We agree with Glass Lewis regarding the
importance of a strong, independent Board to represent the interests of shareholders in providing effective oversight of management, including the CEO; ExxonMobil ensures this robust oversight with a Board that is 90% independent, and a strong Lead
Director with broad authorities. In fact, in response to valuable shareholder feedback, the ExxonMobil Board this year expanded the role of Lead Director. Our Lead Director has all the authorities of the former Presiding Director, including calling,
chairing and setting the agenda for executive sessions of the independent directors; chairing Board meetings in the absence of the Chairman; reviewing and approving the schedule and agenda for all Board meetings in consultation with the Chairman;
and engaging with shareholders. But our Lead Director is also empowered with additional oversight authorities, including leading the annual performance evaluation of the Board; serving as the Chair of the Board Affairs Committee; providing comments
and suggestions to the Board on Board committee structure, operations, and appointment; and importantly, working with the Compensation Committee, overseeing the annual evaluation of the CEO, communicating resulting feedback to the CEO, and reviewing
CEO succession plans. The full list of authorities of our Lead Director can be found on page 9 of our Proxy Statement. With the significant benefit of a combined Chairman/CEO at ExxonMobil, and the robust oversight of our overwhelmingly independent
Board, led by our Lead Director with strong authorities, shareholders should vote Against the Independent Chair proposal.
Report on Risks of
Petrochemical Investments:
ExxonMobil has extensive experience operating in a wide range of challenging physical environments around the globe,
including more than a hundred years of operating experience in the Gulf Coast. The process of selecting locations for the Companys petrochemical operations (including any expansions of such operations or investments therein) is highly complex
and depends on numerous factors that must be analyzed and balanced by management, including financial and operating considerations, in addition to a broad array of risks (generally including strategic, reputational, financial, operations,
compliance, and safety, health and environmental risks). Specific to physical risks, the Company has disclosed on pages 32-34 of the 2020 Energy & Carbon Summary that the
facilities are designed, constructed and operated to withstand a variety of extreme climatic and other conditions, with safety factors built to cover a number of engineering uncertainties, including those associated with wave, wind, and current
intensity, marine ice floe patterns, permafrost stability, storm surge, flooding, magnitude, temperature extremes, extreme rainfall events, and earthquakes.
ExxonMobil onshore gulf coast sites use local codes and U.S. standards for design. New projects and retrofits involving new structures both use the same, up-to-date, design parameters based on American Society of Civil Engineers (ASCE) 7. ASCE 7, Minimum Design Loads and Associated Criteria for Buildings and Other Structures is the standard for
civil/structural design loads. The design loads contained in ASCE 7 are based on in-depth analysis of historical flood, tsunami, rain, earthquakes and wind (hurricanes) events. Based on these loads, use of the
building, and safety factors, the calculated annual probability of failure of a structure can vary from a 1 in 80,000 to a 1 in 33,000 year event. ExxonMobil will also make adjustments to utilize more conservative design criteria based on a case-by-case internal assessment of risk.