View Letter to ExxonMobil

City Comptroller William C. Thompson, Jr. is urging eleven oil companies to review their activities to investigate whether their executives are benefiting from windfall profits generated by rising gas prices.

Thompson sent letters on behalf of the New York City Pension Funds to Chevron Corporation, ConocoPhillips, ExxonMobil, Hess Corporation, Marathon Oil Corporation, Murphy Oil Corporation, Occidental Petroleum, British Petroleum, Valero, Sunoco and Royal Dutch Shell.

Thompson serves as investment adviser to the five New York City Pension Funds, which collectively hold 39,978,590 shares in the oil companies with a current market value of over $2.4 billion. Of these companies, the Funds hold the most shares in ExxonMobil, with 19,966,481 shares with a market value of $1.26 billion.

In his letter to ExxonMobil’s Chairman, William R. Howell, and Audit Committee Chairman, James R. Houghton, Thompson wrote: “New York City, with almost $1.3 billion invested in ExxonMobil, is one of your company’s largest investors. Our funds have held major positions in your company and its parents, Exxon and Mobil, for many decades. We therefore have the best interests of the company at heart, because they are also, in a very real sense, our own interests.”

“I write to express my deep concern about increasing public outrage which is being fueled by allegations that ExxonMobil and other oil companies are engaging in price gouging by artificially pushing up gasoline prices at the pumps,” Thompson wrote. “While ordinary people are being burdened by rising gas prices, a privileged few, the top executives at ExxonMobil and other oil companies, are reportedly lining their pockets with hundreds of millions in excessive compensation.”

Thompson further expressed concern that ExxonMobil has no plans to invest any of its earnings in developing alternative or renewable energy. “Sadly, ExxonMobil represents to many people around the world a company that is impeding the path toward alternative energy and solutions for global warming,” he wrote.

“As custodian of the Funds, I have a fiduciary duty to protect the retirement benefits of our members, who are current and retired employees in the City of New York. They are hard working and retired civil servants, teachers, police officers and firefighters. In this regard, I take a long-term view of our investments in publicly traded companies like ExxonMobil.”

Thompson added: “I am concerned that the growing perception of unfair windfall profits and egregious executive pay could strengthen the maelstrom of public outrage, pose significant long-term risks to the Company’s reputation, and negatively affect consumer preference at gas stations around the country.”

Specifically, Thompson asked the eleven companies’ Audit Committees to “undertake a comprehensive review of the Company’s activities to determine whether the allegations of price gouging are true or false” and that the Compensation Committees “review the Company’s performance-based executive compensation program to determine whether executives are benefiting from the windfall profits that are being generated by rising gas prices.”