CHEVRON CORPORATION | Shareowners Right to Call Special Meeting at CHEVRON CORPORATION

Status
33.30% votes in favour
AGM date
Previous AGM date
Proposal number
9
Resolution details
Company ticker
CVX
Lead filer
Newground Social Investment, SPC
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Energy
Company HQ country
United States
Resolved clause
Shareowners request that the Board of Chevron Corporation ("Chevron" or "Company") take the steps necessary to amend Company bylaws and appropriate governing documents to give holders of 10% of outstanding common stock the power to call a special shareowners meeting. To the fullest extent permitted by law, such bylaw text in regard to calling a special meeting shall not contain exceptions or excluding conditions that apply only to shareowners but not to management or the Board.
Supporting statement
This Proposal grants shareowners the ability to consider important matters which may arise between annual meetings, and augments the Board's power to itself call a special
meeting. This Proposal earned the support of 35% of shares voted in 2019, representing approximately USD54 billion in shareholder value.

We believe management has mishandled a variety of issues in ways that significantly increase both risk and costs to shareholders. The most pressing of these issues is the ongoing legal effort by communities in Ecuador to enforce a USD9.5 billion judgment against Chevron for oil pollution.

When Chevron acquired Texaco in 2001, it inherited significant legal, financial, and reputational liabilities that stemmed from pollution of the water and lands of communities in the Ecuadorian Amazon. For two decades the affected communities brought suit against Texaco (and subsequently Chevron). The case reached its conclusion in 2018 when Ecuador's Constitutional Court, in an 8-0 decision, confirmed a USD9.5 billion judgment against Chevron.

Instead of negotiating an expedient, fair, and comprehensive settlement with the affected communities in Ecuador, Chevron pursued a costly legal strategy that lasted for more than two decades. In the course of these proceedings, Chevron's management made significant missteps, including moving the case from New York to Ecuador. In an unprecedented move, Chevron harassed and subpoenaed stockholders who questioned the advisability of the Company's legal strategy.

Chevron has acknowledged the serious risk enforcement of the USD9.5 billion judgment represents. Under oath, Deputy Controller Rex Mitchell testified that such seizure of Company assets: "would cause significant, irreparable damage to Chevron's business reputation and business relationships."

However, Chevron has yet to fully report these risks in either public filings or statements to shareholders. As a result, investors have requested that the U.S. Securities and Exchange Commission investigate whether Chevron violated securities laws by misrepresenting or materially omitting information in regard to the multi-billion Ecuadoran judgment.

Shareholders urgently need a reasonable 10% threshold to call special meetings.

THEREFORE: Vote FOR this common-sense governance enhancement that would improve shareholder communication and protect shareholder value.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
CoreCommodity Management, LLC For
Dana Investment Advisors (Delisted) For
Boston Trust Walden For
Universities Superannuation Scheme - USS For We support the lowering of the threshold for the ability of shareholders to call a special meeting.

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