California's Treasurer Ma urges votes against two Exxon directors

By Ross Kerber

May 10 (Reuters) - California Treasurer Fiona Ma, a board member of the U.S. state's two big pension systems, on Friday urged both to cast votes against two Exxon directors because of the energy company's unusual lawsuit against small investors.

Exxon filed the suit in January seeking to block a shareholder climate resolution, sidestepping the usual regulatory process to fend off activist measures. The filers withdrew the resolution, but Exxon continued the suit seeking legal costs and other relief.

Activist investors say the suit threatens shareholder influence. Some are campaigning for votes against two directors at Exxon's May 29 online-only annual meeting, CEO Darren Woods and Lead Independent Director Joseph Hooley.

In statements sent by a representative on Friday, Ma said both the California Public Employees' Retirement System and the California State Teachers' Retirement System should cast their votes against both directors over the matter.

“Exxon’s actions are a serious threat to shareholder rights and require a strong response," Ma said. The systems "have a responsibility lead on issues that threaten to undermine shareowners,” she said.

CalPERS and CalSTRS together own more than 14 million Exxon shares in Exxon. Their votes are determined by their staffs. So far neither has said how they will vote, although CalPERS leaders have urged Exxon to drop the suit.

Asked about Ma's comments, a CalPERS representative said via email that "CalPERS continues to have discussions about ExxonMobil’s unprecedented actions, including with our board members. We will continue to speak out in opposition to the company’s legal action and consider the best steps to take to ensure our voice is heard."

CalSTRS did not immediately comment.

Exxon has said the resolution filers hope to constrain its business rather than increase shareholder value, and wants regulators to review what motions can come to vote.

In a statement Exxon said that "The U.S. system for shareholder access is the best in the world. To make sure it stays that way, the rules must be enforced or the abuse by activists masquerading as shareholders will continue threatening the system. By telling people to vote against our board, these groups are making it clear they support continued abuse of the system." (Reporting by Ross Kerber; Editing by Josie Kao)