NLPC has filed a shareholder proposal ahead of ExxonMobil‘s 2026 annual meeting with a simple request: make the Chairman and CEO two different people.
It is among the most basic reforms in corporate governance, already in place at a clear majority of S&P 500 companies. ExxonMobil has resisted it for years, and the reason is not hard to identify — Darren Woods (pictured above), who holds both titles, runs a board that doesn’t show much appetite for questioning his judgment.
That judgment has produced a decade of strategic misadventure. Understanding why requires going back to the moment that seems to have defined Woods’s tenure ever since.
The Wound That Won’t Heal
In May 2021, a tiny activist hedge fund called Engine No. 1 — holding 0.02 percent of ExxonMobil’s shares, a stake worth roughly $40 million — mounted a proxy campaign arguing that Woods wasn’t taking climate risk seriously enough, and walked away with three seats on ExxonMobil’s twelve-member board. It was a historic humiliation. An oil major that had once been the world’s most valuable company had its board composition rearranged by a fund that had barely existed six months earlier.
The rational response would have been to recognize the insurgency for what it was: a momentary alignment of ESG ideology with the voting power of large institutional fund managers. Instead, Woods appears to have drawn a different lesson — that he needed to build climate credentials substantial enough to prevent the next attack from his left flank. What followed was a multi-billion-dollar bet on Paris Agreement permanence, Biden-era subsidy durability, and a low-carbon investment program that looks, in retrospect, like a CEO still flinching from a three-year-old sucker punch.
An independent board chair might have asked the harder question: are we building a strategy around our competitive strengths, or around managing our CEO’s political exposure? Under the current structure, no one was positioned to ask it.
The CEO Who Lobbied Against the President
While President-elect Donald Trump prepared to withdraw the United States from the Paris Agreement — a promise he had made explicitly and repeatedly to American voters — ExxonMobil’s Chairman and CEO traveled to Azerbaijan to attend COP29, the United Nations’ annual climate summit, and argued that Trump should reverse course. The policy “stops and starts” of changing administrations were, Woods told the Wall Street Journal from the conference floor, “extremely inefficient” and created “a lot of uncertainty.”
Trump was not persuaded. He withdrew from Paris on his first day back in office.
The episode would be merely awkward if it were isolated. It is not. ExxonMobil has “fully supported” the Paris Agreement since its inception in 2015, and Woods has been its most vocal oil-industry advocate across three administrations. He praised Biden’s decision to rejoin. He showed up at a UN climate conference to urge Trump not to leave again. And now, with the U.S. formally out of Paris for the second time, Woods is left defending a capital allocation strategy built around the policy assumptions that framework helped sustain.
NLPC called for Woods to resign following his COP29 performance. His continued tenure — and the board’s continued indifference to the strategic and reputational damage his climate advocacy has inflicted — is precisely why structural reform is necessary.
What “Pacing” Low-Carbon Spending Really Means
ExxonMobil has committed up to $20 billion in lower-emission investments between 2025 and 2030, concentrated in carbon capture and storage, hydrogen, and biofuels. The strategic rationale rested on two pillars: growing demand for low-carbon products, and durable government policy support, including the IRA tax credits Woods explicitly warned at COP29 were essential. Neither pillar is secure.
By last fall, Woods was telling the Financial Times that the company would pace its low-carbon spending — corporate for pulling back — because customer demand for hydrogen and biofuels hadn’t materialized, and the government policies meant to create that demand “frankly aren’t working.” A multi-billion-dollar capital commitment had been staked against assumptions that, by his own account, had not been met.
This is shareholders’ capital being managed by a CEO who also chairs the board that should have been asking the hard questions before the commitments were made. ExxonMobil’s non-hydrocarbon ventures are commercially viable only when underwritten by government. The company has accepted at least $331 million in federal grants for carbon capture in Texas. Whatever one thinks of that investment thesis, it represents a significant and ongoing dependency on political favor — dependency that Woods was apparently comfortable with, right up until the politics changed.
There is something especially jarring about the timing. At a moment when continued instability across the Middle East and ongoing tensions over Venezuelan oil production are underlining how critical reliable hydrocarbon supply is to global security, the Chairman-CEO of one of the world’s great energy producers spent his political capital lobbying for Paris Agreement membership and building a hydrogen business with no customers. ExxonMobil’s core competency — finding and producing oil and gas, dependably, at scale — has never been more strategically valuable. Woods has been distracted from it.
The Principle He Applies Selectively
Woods’s discomfort with government-imposed regulatory dependencies is real — when the government in question is the European Union.
When Brussels threatened to enforce its Corporate Sustainability Due Diligence Directive — which would require ExxonMobil to implement Paris-aligned climate transition plans and exposed the company to fines of up to five percent of global revenue — Woods didn’t equivocate. He called the regulation “bone-crushing.” He warned ExxonMobil could not continue doing business in Europe if the law wasn’t scrapped. He noted the company had already been “slowly pulling out of Europe,” exiting nearly 19 operations due to regulatory overreach. He lobbied Trump to attack the directive in trade negotiations with the EU.
It is a compelling argument for the principle that companies should not have to build their strategies around the assumption that government will sustain a favorable regulatory environment indefinitely.
It also applies directly to what Woods has been doing with U.S. taxpayer dollars.
The IRA subsidies he fought to preserve at COP29, the $331 million in Department of Energy grants, the carbon capture investment thesis that requires government support to pencil out — these represent the same dependency that infuriates him when Brussels creates it. Woods objects to regulatory capture when Europe imposes it on him. He actively courts it when Washington is writing the checks off the U.S. taxpayers’ account. That is not a principle. That is a preference for the subsidies that happen to benefit him.
An independent board chair who answered to shareholders rather than to Woods might have noted this contradiction before ExxonMobil built a multi-billion-dollar business line around it.
Rewarding Failure, Reliably
None of this strategic drift has affected the size of Woods’s paycheck. His 2024 compensation package reached $44.1 million — a nearly 20 percent increase over the prior year — even as his low-carbon investment program stalled, his political interventions created friction with the incoming administration, and the policy assumptions behind his signature strategic bets were evaporating.
The company reported strong 2025 earnings of $28.8 billion, and its core upstream business continues to perform. Strong oil prices (currently eroding rapidly with the Middle East war) mask a great deal. But shareholders should not confuse hydrocarbon tailwinds with strategic wisdom, and they should not allow a rising earnings line to obscure the pattern: a Chairman-CEO who faces no independent check on his decision-making, pursues politically entangled investment strategies, and is compensated as though accountability were optional. As NLPC has documented repeatedly, this board rewards Woods regardless of outcomes. That is what boards do when no one is watching them, either.
The Reform
NLPC’s proposal asks the board to adopt a policy requiring separation of the Chairman and CEO roles, with an independent director serving as Chair. Proxy adviser Glass Lewis has observed that a combined Chair-CEO “can allow a CEO to have an entrenched position, leading to longer-than-optimal terms, fewer checks on management, less scrutiny of the business operation.” The CFA Institute similarly argues the combination gives “undue influence to executive board members” that impairs independent board judgment. Sixty percent of S&P 500 companies have already made this separation — a figure that has risen steadily for a decade.
ExxonMobil shareholders have a clear choice at the 2026 annual meeting: ratify a governance structure that has produced a decade of Paris Agreement advocacy, an ESG overcorrection that coincided with a board insurgency, subsidy-dependent capital commitments, selective outrage about regulatory dependency, and a CEO who chairs his own oversight body — or vote to require the independent check that shareholders of a company this size plainly deserve.
NLPC urges a vote for separation of the Chairman and CEO roles. Darren Woods has had nearly a decade to demonstrate what he does with unchecked authority. The record speaks for itself.
(Image above created via Midjourney AI)
