May 9, 2008
Dear Fellow Exxon Mobil Corp. Shareholder:
As proponents of the shareholder resolution on ExxonMobil's (XOM) 2008
proxy statement calling for an independent Chairman of the Board
(ITEM 5), we want to draw your attention to the importance of this
vote, and to express why an independent chairman would be beneficial
for ExxonMobil. We are motivated increasingly by the need for an
independent chair at XOM to ensure more objective discussion and
assessment regarding the strategic priorities and growth
options for the Company during a time of rapid change in the industry.
As shareholders of ExxonMobil for generations, we take a long view of
the company's health, and believe an independent chairman would:
* strengthen and empower the Board, helping it take an appropriate
level of leadership regarding the biggest strategic issues
facing the company;
* create greater independence and objectivity on the Board at
a time of critical decision-making and market-opportunity
assessment;
* establish a more coherent, long-term corporate response to the
challenge of replacing reserves, which will enable shareholders
to better assess the potential future valuation of the company;
* take greater responsibility for improving communications between
the Company and its shareholders; and
* focus the Company on improving its brand positioning and
reputation globally.
We have always respected the Company for its project management skills,
investment discipline, and the efficiency of its operations. Our call for
an independent chairman is not about XOM's recent earnings record, or the
skills or discipline of its managers, but about its strategy for providing
energy well into the future. ExxonMobil is struggling to replace its oil
reserves, and its reserve-replacement numbers in 2007 were the lowest in
14 years. Its capital investments to find new reserves seem modest given
this challenge, and have recently lagged its competitors. And even
financially, XOM has room for improvement: it has significantly
underperformed its industry peer group for the 1-, 3-, and 5-year periods
in annualized returns to shareholders.
The global energy markets are currently undergoing a profound shift.
Industry analysts, venture capital investors, and policy makers are
increasingly recognizing that international oil companies face far more
numerous and more serious challenges today than they did 20, or even 10
years ago. These escalating challenges include:
* the record high price of crude, which fosters new entrants into the
marketplace as cost-competitive energy options become more viable and
politically accepted
* the perceived or real need for energy security, by consumers and
national governments
* global policies seeking to curb CO2 emissions and diversify
energy supplies
* the severe shortage in skilled labor-the largest strategic risk facing
the oil and gas sector, according to a 2008 study by Ernst & Young:
Strategic Business Risk: Oil & Gas
* increased political and environmental constraints on access to known
reserves, both nationally and globally
* the unpredictability of partnerships with Nationalized Oil Companies
(NOCs), and
* the surging backlash from consumers and politicians regarding
"Big Oil."
While both ExxonMobil and its peers face similar risks, we fear the Company
may not be as well positioned as its peers to deal with some of these
industry threats. XOM's poor reputation with many stakeholders
and policy
makers, its long-held and controversial position on climate change, and its
somewhat dismissive attitude towards national energy security concerns, means
XOM may have a more difficult time surmounting these challenges, and
positioning
itself for emerging growth opportunities, new acquisitions, recruitment, and a
place at the policy table.
ExxonMobil is a global energy leader now, and we want
to ensure that it maintains that position. That fundamentally
starts with a strong
and capable Board of Directors. We count on the Board to
provide objective analysis,
a "check" on management's assumptions and long-term vision
for the Company, and to serve
as our chief fiduciary representatives. We find it troubling
that over the years, our
Board of Directors has had an informal policy of not meeting
with, or substantially
communicating with, its shareholders. An electronic template
on XOM's website or form
letters do not suffice in this regard. We also question
whether non-executive directors
have had access to independently-sourced information and
analysis that would permit a
less-biased and more comprehensive assessment of XOM's
competitive position in its core
markets, its true strategic options, and the consequences
of each in terms of value
creation and risk for shareholders.
While having an independent chair would not solve
all of the Company's problems, we believe it would go a long way towards
facilitating
a deeper review within XOM of its core strengths and weaknesses.
Such inner-reflection is difficult when the Board is lead by a
CEO who has spent most of his adult life at the Company, as
has the entire executive management team.
We have owned the Company's stock through many periods of boom
and bust, and anticipate continuing to do so. We believe that
our call for an independent chairman would more
adequately position the Company for the very competitive and
rough road ahead.
Please vote FOR on ITEM #5.
Sincerely,
Proponents Robert A.G. Monks and RAM Trust Services, XOM
investors for 70 years
Proponents Peter O'Neill and John deCuevas, Rockefeller
Family members, who are
joined by 69 direct descendants of John D. Rockefeller--
founder of Standard Oil Trust
and what eventually became both Exxon and Mobil--in
supporting this proposal. Rockefeller
Family members have owned stock in the Company since the
inception of Standard Oil in 1870.
For further information, please contact Okapi Partners
who are assisting us in our
communications efforts, toll-free at (877)259-6290 or
(212)297-0720, or visit
http://www.ExxonforOwners.com.
This is NOT a proxy solicitation and no proxies will be
accepted. Please DO NOT send your
proxy cards to the Proponents or Exxon For Owners.
"Exxon has off year discovering new oil," by Jeffrey Ball
and Russell Gold. Wall Street Journal,
Feb. 16, 2008, p. A2. RiskMetrics Group ISS Governance
Services Exxon Mobil Corp. Report,
May 7, 2008, p. 1. Returns compared GICS industry peers.