ExxonMobil calls for Full Disclosure by Proxy Advisers

Exxon Mobil has supplemented its comment letter on the proxy plumbing concept release -- focusing on the subject of full disclosure by proxy advisers.  The company is one of the most widely held public companies in the U.S.A., with over 2.5 million registered and beneficial shareholder accounts. The new letter has the four following recommendations:

1. Proxy advisers should disclose how the methodologies they use to assess pay-for-performance were developed, and why they believe those methodologies provide an appropriate basis for their voting recommendations.
2. Proxy advisers must ensure that all information they publish which could affect an investor’s voting decision is accurate and not misleading.
3. Proxy advisers should fully disclose the involvement of any third party in the formulation of particular voting recommendations.
4. The SEC staff should remind investment managers of the need to monitor the performance, on an ongoing basis, of any proxy advisers on which a manager may rely.

The letter then goes into detail on each one.

What you might find interesting are the attachments that Exxon uses to support some of its points, with a focus on Institutional Shareholder Services (ISS). Attachment I is Exxon’s analysis that suggests ISS’ short-term relative total shareholder return emphasis is not an accurate predictor of longer-term positive results for shareholders.  Attachment II are copies of correspondence ExxonMobil submitted to ISS last proxy season with respect to the adviser’s GRId matrix. “While ISS did correct some of the errors we identified in the initial GRId report, uncorrected flaws in the design and implementation of GRId carry the potential to confuse or mislead shareholders in a number of areas including . . ..”

A copy of the letter is at http://www.sec.gov/comments/s7-14-10/s71410-313.pdf.